Real Estate Business and Pawnshop Regulators have informed the buyers of houses and condos from any real estate company to report to the government body immediately should their houses or condos be confiscated due to failing to make their agreed repayments.
The June 9 public notice followed recommendations from Prime Minister Hun Sen that the owners of borei and condo developments not seize the homes of buyers who are unable to meet their payments due to financial difficulties.
The regulators encourage buyers who are facing such situation to visit their office on Floor 7 of House 168 on Street 598 in Chraing Chamres 1 commune in the capital’s Russey Keo district. Alternatively, they can reach them via 012 393 727, 099 980 499, 069 517 186, or their social media channels.
Kaing Tongngy, head of the Cambodia Microfinance Association's (CMA) communications department, said the government’s intervention will incentivise more people to finance their property purchases.
He also noted that arranging finance through real estate developers carries more risk than traditional lenders, such as banks and microfinance companies.
The first challenge, he said, is that those who finance through developers do not receive their land titles immediately and can have their property seized at any time. With a loan from a financial organisation, the buyer has their property title, and their home cannot be confiscated without court permission.
“The second challenge is that the company do not always assess the buyers’ ability to make repayments, while traditional lenders will do a thorough check, to ensure that a buyer will be able to make their payments. Without such analysis, some customers can easily lose their property due to an unforeseen crisis, as we have seen recently,” he added.
“The third matter is that banks and microfinance companies will verify the authenticity of documents related to property ownership. On the contrary, some borei projects proceed with construction without the appropriate permits, or lack some other legal requirements,” he continued.
He added that those who take loans from bank and microfinance can also file complaints to regulatory bodies should a dispute arise.
“In addition, the interests rate from banks and microfinance are generally lower than those offered by borei or condo developers,” he concluded.
