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The hard and the soft of title

The hard and the soft of title

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Matthew Rendall, a partner at local law firm Sciaroni & Associates, explains the intricacies of the Kingdom's Land Law and what it means for registering, and holding on to, land


Sciaroni & Associates partner Matthew Rendall says the land law is set up to protect the incoming buyer.

THE titling of land and the establishment of ownership rights is one of the most critical issues confronting development in Cambodia today.

While the majority of well-publicised disputes tend to pit the poor against the powerful, certainty of title is a prerequisite for anyone who hopes to own land and build in the Kingdom.

Prime Location caught up with Matthew Rendall, a partner at local law firm Sciaroni & Associates, to talk about the history of Cambodia's land laws, the process of registering title and the ins and outs of dispute resolution.

Can you give a brief history of land title in Cambodia?

In 1989, a regulation was passed allowing private ownership of residential properties and possession status on agricultural property up to five hectares. Prior to that it was all state land.

In 1994, a land law [the Law on the Country Planning, Urbanization and Construction] was passed that basically formalised this and made a distinction between residential properties and nonresidential properties for ownership purposes.

In 2001 the Land Law came along and basically allowed private ownership of most types of land.

How is land registered in Cambodia?

All land will eventually be registered at the Ministry of Land Management cadastral office. At the moment everybody is on what they call soft title, in which land is registered at the local level only and not at the national level. It is technically possession status, not ownership.

Hard title is land that is registered at the national registry and has a title deed. The World Bank is currently sponsoring a program where it is bit-by-bit going around demarcating everything and identifying who owns what.

What should be happening is the person on the register now should trump, just to give confidence to the system.

When you buy a piece of land, how do you ensure you have the only title?

The first thing you do is get whatever documentation the person selling the land has, and that will tell you if it is hard title or soft title. If it's national title, you go to the national register and confirm it, but you still reconfirm at the district level that there have been no transactions since the issuance of the national title.
If it is soft title, you would do due-diligence at the local sangkat [commune] office and the district office to identify who they see as the owners or possessors of that piece of land. You would also do due diligence with the neighbours and ask them who they see as the owners of that land.

If each of those people says the same thing, you are pretty safe. If any of those people say something different to the others, then you have to investigate further. Your biggest problem ordinarily is overlapping boundaries; there was no science to demarcating borders in the old days and the creep of overlaps can be quite substantial.

What counts as proof of soft title?

Title documentation can take a variety of forms, including building applications, which act as proof of ownership. Bear in mind that most people have no paperwork - they were just there and never actually formalized anything.

People with no ownership documents will go down to the local sangkat and get a possession status certificate, and that is fine. The other thing you might see is a letter of transfer from the previous possessor stamped by the local sangkat and the district office, and that is proof of soft title at the local level.

It all comes down to the district and local offices recognizing somebody, and they will create the paperwork if need be to confirm that. It is with that bit of paper you go forward.

In the event there is a land dispute, what are the resolution channels?

It depends on the level of registration. If you have soft title it will go to the cadastral committee for dispute resolution. They will go into the area and ask people to tell them who owns what. They will put that up publicly, and, if there are no contestations, that will be put on the national register and that becomes forever-and-a-day ownership with those borders for those people named. If anybody comes forward and contests those demarcations, everybody will need to bring their evidence forward to the cadastral committee and they will assess the evidence and make a call.

There is also a national land dispute committee under the Council of Ministers that was set up a couple of years ago to oversee land disputes that is separate to the cadastral committee. They usually try to get parties to agree to a resolution, but they can make a call.

The third entity is the courts. You should never be denied the right to go to court on any dispute because it's the courts that have that mandate under the constitution. They should be the final arbiter always.

What do the dispute committees and the courts base their decisions on?

Ownership is based on the principle of certainty of title. This is conferred on people not by contract or by deed with the previous owner but by the registrar. Ownership of land, and transfer of ownership, is decided at the time the Registrar General changes the books.

If Mr A sells land to Mr B, Mr B becomes the owner as a matter-of-fact under law when the Registrar General changes the books. If someone is wrongly put on there, the previous owner has an issue against the Registrar General, not against the owner of the title, who is now in matter-of-fact the owner.

What is on the register is absolute proof of ownership; so, if there is a contest in court, you should be able to take the title deeds to court, say it's got my name on it - end of story. There is nothing for the court to determine, unless there has been fraud. The system is such that the courts shouldn't be involved.

If the courts do become involved, does the Land Law make it explicit as to what it bases its decision on?

The Land Law doesn't deal with what happens if there is a competing claim to title. It's an interesting issue because if you have two people with documents rightfully issued, then under law generally the person who got that issued first should win.

But with land it is a weird situation because whoever is on the title deed at the national register should win.  The courts would have to weigh in and make that call, but what should be happening is the person on the register now should trump, just to give confidence to the system.

Otherwise, if I could buy land knowing that somebody could come forward in the future and my rights can be undone based on an event that happened 10 years ago, there would be no certainty for investors.

The system is designed to prevent that from happening. The courts should really, if they know the Land Law well, they should be saying the person on the title has to be recognised if this system is to work.

So, in that case, there is no recourse for the rightful owner?

If you can't rely on the register, no transaction is safe going forward. You could have a situation where party A owns the land, party B has somehow fraudulently got ownership transferred and sells it to party C.

You have two victims there; party A and party C, who has just paid $1 million for the land. Party A has lost his land, unbeknownst to him. In that situation, the system decides to protect the incoming buyer. You have to be able to trust the register, otherwise if you can pick out one fault in the history of transactions of that land, it can undo all deals.


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