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MLMUPC to forbid plotted land sales

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A moto driver rides past a sign signalling plotted lands for sale on the outskirts of Phnom Penh. Moeun Nhean

MLMUPC to forbid plotted land sales

Plotted-land selling, which became popular earlier this year, is becoming cancerous because of the irregularity in issuing proper certificates, according to industry experts.

The Ministry of Land Management, Urban Planning and Construction (MLMUPC) is currently drafting an announcement which will be handed to the City Hall and Provincial Halls requiring the cessation of selling plotted land.

Cambodian Valuers and Estate Agents Association (CVEA) president Kim Heang said plotted-land selling was most popular in districts around Po Sen Chey and Dongkor, and along some National Roads, where investors put up their land of five to 10 hectares to be sold as plotted land.

Many people – most of whom are low-to middle-income citizens – are buying these whole land plots, which are about 100 square metres, for $8,000 to $12,000. “I see a problem with this trend, as the owner retains the property owner certificate. What I want to know is: do owners keep their certificates in the bank? Usually, the plotted-land seller has to issue property owner certificates to their buyers. However, they only issue a normal selling-buying certificate which is issued from the district hall,” he said.Heang, who is studying this problem, continued, “I don’t know if this is illegal. Though personally, I do not agree with this method. However, if that land has a certificate issued from a district hall and is up for sale, it is not a problem.”

Heang gave a brief outline of how plotted-land buyers can run into trouble: A seller owns a 10-hectare plot of land priced at $10 million, leaves the property owner certificate in a bank, sells the land as plotted land, leaves to go overseas for a number of years; bank is able to confiscate the plot of land because the owner has left the country, placing the buyer in deep trouble.

He had previously asked some plotted-land sellers about this matter, who told him that issuing property owner certificates requires too much money. “Then I asked if they weren’t essentially lying to their clients. They said they weren’t lying, but they just weren’t telling the [entire] truth.”

Ann Thida, senior vice president of CBRE Cambodia, said buyers need to clearly request for the master plan or property owner certificate from sellers to avoid future risk. She added, “Currently, there are cases of legal disputes between plotted-land sellers who have property owner certificates, and buyers who only have certificates issued from a district hall.”

Lao Tip Seyha, deputy secretary of the MLMUPC told Post Property via phone this week that the ministry has never received any request to sell plotted land. Plotted-land sale transactions mostly occur in private, involving local authorities who do not have the rights to issue property owner certificates. He added that only ministerial departments and the ministry itself have the right to issue property owner certificates. Therefore, buyers need to consider, and ask for property owner certificates from sellers to avoid wasting their money, and future complications.

Seyha explained that every plotted-land sale has to have legal certificates from the ministry, and not just the certificate in the bank. However, to date, there has been no record of any seller requesting for a certificate from the ministry. “The ministry is drafting an announcement to every city and provincial hall to stop plotted-land selling all over the country,” Seyha added, suggesting buyers of plotted land stop their purchases as it is a “high-risk endeavour”.

CVEA’s Heang said he supports the ministry’s action thoroughly because it will protect the people. However, he admitted it was quite unfair to plotted-land sellers and would affect the industry as a whole.

Man Chanthy, president of Premium Housing, who is currently selling plotted land, complying legally and issuing proper certificates, in Sangkat Ovlek of Dongkor district said it wouldn’t be a problem if plotted-land selling is done legally. However, most plotted-land sellers who have property owner certificates only have certificates issued from district halls for their clients. “The government will have a headache concerning this problem in the future. Therefore, the MLMUPC should define this problem clearly,” he said. Chanthy said that essentially, all parties of the transaction want to be happy and not run into trouble in the future. “If you have a property owner certificate, you should issue property owner certificates to your clients. If you cannot because it would cost a lot, then you should not be selling your land.”

Keo Ratana, a plotted-land buyer in Dongkor district, said he has been buying plotted land for three years. Back then, he could buy a 125 square metre plot of land for $10,000, which now would cost $15,000 because it has a property owner certificate.
He said he is willing to spend the extra amount to avoid further complications in the future.

Mean Chanyada, City Hall’s spokesperson, declined to comment.

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