"owning" property via mortgage to Khmer

mi1 · Post by **mi1** » Fri Nov 15, 2019 4:00 pm

Hello,
My friend (non Khmer) mentioned that he bought a house in PhnomPenh using this scheme.

- Officially loaned money to his Khmer partner (mortgage to house)
- So the house is under his Khmer's partner name
- House ownership documents states that house is under mortgage (which means it cannot be sold until all paid)
- He said used foreign law agency to do that..

Has anyone heard anything about this scheme ? Is it legal after all to do official personal loans.. and put this kind of things into house ownership documents ?
The risks are still there. Khmer owner can still kick you out from house but will be he actually not able to sell it until pay.. that's the question. Any thoughts ?

Kammekor · Post by **Kammekor** » Fri Nov 15, 2019 4:07 pm

mi1 wrote: ↑Fri Nov 15, 2019 4:00 pm Hello,
My friend (non Khmer) mentioned that he bought a house in PhnomPenh using this scheme.

- Officially loaned money to his Khmer partner (mortgage to house)
- So the house is under his Khmer's partner name
- House ownership documents states that house is under mortgage (which means it cannot be sold until all paid)
- He said used foreign law agency to do that..

Has anyone heard anything about this scheme ? Is it legal after all to do official personal loans.. and put this kind of things into house ownership documents ?
The risks are still there. Khmer owner can still kick you out from house but will be he actually not able to sell it until pay.. that's the question. Any thoughts ?

Cambodian banks will keep the original title as a collateral for the loan. If they think anything else isn't sufficient, I think something mentioned in 'the house ownership documents' (which documents?) won't do.

explorer · Post by **explorer** » Fri Nov 15, 2019 4:11 pm

mi1 wrote: ↑Fri Nov 15, 2019 4:00 pm Any thoughts ?

Don't

Post by **Freightdog** » Fri Nov 15, 2019 11:14 pm

explorer wrote: ↑Fri Nov 15, 2019 4:11 pm
mi1 wrote: ↑Fri Nov 15, 2019 4:00 pm Any thoughts ?
Don't

Any elaboration, objective and constructive, ideally?

samrong01 · Post by **samrong01** » Sat Nov 16, 2019 2:10 am

Yes this is a valid method to control land in Cambodia. There is no law against foreigners holding mortgages over land. The downside is that if the property increases in value then you only get the amount in the mortgage unless you have provisions in it to accumulate interest over the years. This could have tax implications.
Its better to also have a lease back on the land as the legal owner can chuck you out to enjoy "quiet possession". A lease can also have tax implications since registered leases are taxed.

Sweet Lemon · Post by **Sweet Lemon** » Sat Nov 16, 2019 9:07 am

samrong01 wrote: ↑Sat Nov 16, 2019 2:10 am The downside is that if the property increases in value then you only get the amount in the mortgage unless you have provisions in it to accumulate interest over the years.

Isn't "the Khmer partner can kick you out of the house" also a downside?

Duncan · Post by **Duncan** » Sat Nov 16, 2019 9:46 am

Sweet Lemon wrote: ↑Sat Nov 16, 2019 9:07 am
samrong01 wrote: ↑Sat Nov 16, 2019 2:10 am The downside is that if the property increases in value then you only get the amount in the mortgage unless you have provisions in it to accumulate interest over the years.
Isn't "the Khmer partner can kick you out of the house" also a downside?

Or the partner could get 6 tuk-tuk drivers to make a complaint about the taste of pies and have you deported .

Bitte_Kein_Lexus · Post by **Bitte_Kein_Lexus** » Sat Nov 16, 2019 1:27 pm

There's no need for a law firm to get involved. All they do is take your cash. Just deal directly with the owner and bank.

offroadscholar · Post by **offroadscholar** » Sat Nov 16, 2019 2:02 pm

mi1 wrote: ↑Fri Nov 15, 2019 4:00 pm Hello,
My friend (non Khmer) mentioned that he bought a house in PhnomPenh using this scheme.

- Officially loaned money to his Khmer partner (mortgage to house)
- So the house is under his Khmer's partner name
- House ownership documents states that house is under mortgage (which means it cannot be sold until all paid)
- He said used foreign law agency to do that..

Has anyone heard anything about this scheme ? Is it legal after all to do official personal loans.. and put this kind of things into house ownership documents ?
The risks are still there. Khmer owner can still kick you out from house but will be he actually not able to sell it until pay.. that's the question. Any thoughts ?

Complications could occur when its time to sell. What is the agreed consideration that the Khmer partner gets from any sale ?
It cant be sold without the Khmer partner fronting up with their ID and thumb printing the transfer documents etc.
This is where they have leverage on you. They can become too busy, sick, unavailable etc until a better deal for them is offered.

samrong01 · Post by **samrong01** » Sun Nov 17, 2019 6:35 am

Offroadscholar is right of course. Whatever method is used there is no risk-free way for a foreigner to hold land in Cambodia. Every method always involves trusting a Khmer person. The only relatively risk-free solution is to buy an apartment which foreigners are allowed to own.

"owning" property via mortgage to Khmer

"owning" property via mortgage to Khmer

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