Real estate companies entering the Kingdom’s property market could face fines if they fail to apply for licences from the Ministry if Economy and Finance, according to industry experts.
Figures released by the Ministry of Economy and Finance last week show that a total of 45 companies running property evaluation and consulting services are formally registered, while up to 60 per cent of the Kingdom’s real estate companies are yet to register, Nong Piseth, deputy director of the ministry’s financial industry department.
“Newly established realtors and companies whose licence has expired should apply for a new one, in order to avoid doing business illegally,” he said.
The ministry requires real estate agents to hold a US$100 annual licence, while companies who carry out additional services, such as land valuation and consultancy, are expected to acquire a $344 annual licence.
Some firms are waiting for further signs that the market is recovering before applying for a licence, according Nong Piseth.
“If companies don’t register, ministry officials will advise them on how to pay. If they still fail to pay, we will inform the public of the company’s misconduct or fine them,” he said, adding that details regarding the fines were not confirmed.
Many insiders are concerned that real estate companies operating without a licence will bring the sector in to disrepute.
“Illegal operations will impact the image of the industry and deter local and foreign investment. In order to maintain credibility, companies need to comply with the existing rules,” according to National Valuers Association President Sung Bonna.
He added that firms risk the chance of closure, if, after being reported to the media, they fail to register.
While most companies agree the law provides more transparency, some are struggling with the legal intricacies.
The application for the licence is more complex than in previous years, according to Dith Channa, managing director of VMC Real Estate Cambodia.
“Although the law is now more complicated, with many more stages to complete in a shorter period of time, we still support it,” he said.