Main transaction conditions
- Agree on the Price of the unit
- Agree if the sale includes all furniture and home equipment
- Agree who must settle all outstanding fees (e.g., management fees, taxes, electricity bills)
- Agree if the owner must ensure all utilities and appliances are in working order and if any renovation is needed.
- Who will handle the costs for the hard title transfer and property tax
- Hire a legal professional to oversee the purchase process
- Generally, all payments, including deposits and subsequent installments, should be made directly to the property owner only.
Deposit (Booking) Agreement
A booking agreement is a preliminary agreement between a seller and a buyer for the purchase of a condominium unit. It outlines the key terms of the sale, such as the price, payment schedule, and responsibilities of each party before a formal sales agreement is signed. This specific booking agreement serves as an official letter of intent to purchase the condo, outlining the following:- Property details: Location, unit number, size, and price.
- Payment terms: Deposit amount and due dates for remaining balance.
- Conditions: Obligations of both buyer and seller, including signing the SPA, title transfer, and ensuring the condition of the unit.
- Consequences: Repercussions for backing out of the agreement by either party.
- Deadline: Date by which a formal sales agreement needs to be signed (SPA).
- Usually deposit amount would be equivalent of 2000 – 5000 USD which is later , deducted from the total amount agree.
Sales and Purchase agreement (SPA)
This is a formal contract between the buyer and seller that outlines the final terms and conditions of the condo purchase. It comes after a booking agreement is signed and serves as the legally binding agreement for the sale. The SPA typically includes more details than the booking agreement, such as:- Original property titles and documents must be verified at SPA signing.
- Full details of the property: This may include the legal description, size, and any fixtures or fittings included in the sale.
- Final purchase price: This will be the total price, including any outstanding fees or the cost of furniture.
- Payment schedule: This details exactly how much needs to be paid and when.
- Completion date: This is the date when ownership of the condo is transferred to the buyer.
- Obligations of each party: This outlines what the buyer and seller need to do before, during, and after the sale.
- Dispute resolution: This explains how any disagreements between the buyer and seller will be resolved.
- By signing the SPA, both parties are legally bound to the terms of the agreement.
- Usually buyer pays the seller 40-50% of total amount at this stage. The rest is paid once the strata title will have been transferred.
- Review and Approval: Both parties (buyer and seller) and their legal representatives (if applicable) should thoroughly review the SPA to ensure they understand and agree to all the terms and conditions.
- Multiple copies: The SPA should be printed in Khmer and English. Enough copies should be prepared for each party (buyer and seller), a witness (optional), and a lawyer’s office (if used).
- Signatories: Identify who will be signing the agreement. It should be the authorized representatives of both parties, typically the property owner (seller) and all buyers listed in the agreement.
- Signing Ceremony – Location: This can be done at a lawyer’s office, a real estate agent’s office, or a mutually convenient location.
- Buyer and Seller should be physically present during the signing ceremony.
- Witness (Optional): While not mandatory, having a witness can add credibility to the signing process. The witness should be someone impartial who understands the agreement’s nature.
- Signatures and Stamping: All parties involved sign each copy of the SPA in the designated areas. In Cambodia, it’s also common practice for signatories to affix their thumbprints for additional verification.
- Legalization (Optional): While not always required, some parties might choose to have the SPA legalized by a Cambodian court or notary public. This adds an extra layer of legal recognition to the document.
Pay the necessary transfer taxes and fees
After signing the Sale and Purchase Agreement (SPA) in Cambodia, the buyer or seller needs to pay the necessary transfer taxes and fees. Here’s how the process typically works:- Calculate Transfer Taxes: The transfer taxes usually include a stamp tax or property transfer tax, which is generally 4% of the property’s assessed value.
- Payment of Taxes and Fees: The transfer taxes and fees are paid to the Ministry of Economy and Finance in the General Department of Taxation
- Obtain Tax Receipt: Upon payment of these fees, the payer will be issued a tax receipt, which serves as proof of payment.
- Payment Options: Taxes can be paid at local tax offices or through banks such as ACLEDA Bank, Canadia Bank, Vattanac Bank, or Cambodia Public Bank.
- The whole process is usually coordinated by a professional who will be responsible for Strata Title transfer
Strata Title Transfer
Once the necessary transfer taxes and fees are paid in Cambodia, the process of transferring the strata title typically involves the following steps:- Documentation: The buyer and seller must prepare all required documents, which include proof of identity, marital status, SPA, and tax payment receipts. These documents must be certified and, if necessary, translated into Khmer.
- Application for Transfer: The buyer or seller submits an application for the transfer of the strata title to the Ministry of Land Management, Urban Planning, and Construction (MLMUPC). This application includes the Vente Definitive and the Application for Ownership Transfer, which are standard templates provided by the land department..
- Physical Presence: The buyer must be physically present in Cambodia to affix their thumbprint on the certified documentation, including the Vente Definitive and the Application for Ownership Transfer..
- Review by MLMUPC: The land department will review the application and ensure that all common areas are correctly managed and insured before issuing the strata titles.
- Payment of Public Service Fees: There is a public service fee for the conversion of the master title and for issuing each individual strata title in the buyer’s name.
- Issuance of Strata Title: Once the land department is satisfied with the management and insurance of common areas, and all fees have been paid, the strata titles are issued to the individual owners.
- Registration: The new strata title is then registered with the appropriate government authorities to make the transfer official.
- It’s important to note that the process can be complex and may require the assistance of legal professionals to ensure that all steps are followed correctly and that the transfer is legally binding. If you’re involved in a strata title transfer in Cambodia, it’s advisable to consult with a local lawyer or real estate professional who is familiar with the process.
Final Payment
- Once the buyer receives the strata title, the final payment must be made. A receipt confirming the receipt of full payment should be signed by the seller (the former owner).
Other
If both parties agree the following can be accomplished:- Remote Coordination: The deposit contract can be managed remotely (if buyer or seller are not physically present in Cambodia) but the owner and buyer should be present in Cambodia for the Sale and Purchase Agreement (SPA) signing.
- Occupancy: The buyer can move in after the SPA is signed and all conditions are fulfilled.
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