Buy soft-title apartment in PP
Re: Buy soft-title apartment in PP
rabbit_ear wrote: ↑Sat Apr 03, 2021 3:13 pm Hi everyone, I’ve been reading CEO for a while, but never posting.
I have a question. I would like to buy the apartment I’ve been living in for a few years, but it’s a soft-title situation. It’s in downtown PP near the royal palace.
From other threads I understand that it used to be legal for foreigners to buy soft-title, but they changed that and it’s not possible anymore. So my question, is that really so and is there any way around this, that doesn’t involve wives or girlfriends?
I’m thinking if it is still legal for foreigners to own soft-title (if purchased before the change in the law) then there might potentially be a back door somewhere. I would be grateful for any info and ideas.
It’s in downtown PP near the royal palace.
This is Khan Daun Penh. I understand from previous threads here that a lot of foreigners we able to buy soft title apartments above the ground floor. Then the Khan changed the rules and now they can't buy them. They current owners can't sell them either to anyone other than a local or through some structure involving trust and faith in the Cambodian legal system. They will tell you it is no problem and they know a man that knows a man etc.
The power that be, right down to the locals, don't want you owning property here for a variety of reasons. Getting priced out of their own city is one of them. The over priced and badly built condo's with strata titles are the exception. They are for foreigners with lots of money to park, no questions asked.
Any "way around" these problems that are confidently touted by agents and sellers alike might appear to work for a while, and you get your apartment and modernise it and are enjoying it. Then one day you get a piece of paper through the door saying your papers were not legal. Or that the company you set up as a "way around" now has a new tax being applied to it - let's say 7.5% of the property value, payable quarterly in advance. The possibilities to screw you are endless and it is a national sport.
Ask yourself this question: Do you have any trust or faith in the integrity of a 'local for hire' nominee and the Cambodian legal system as an upholder of the rule of law and property rights in favour of a foreigner over a local.
If the answer to either of those questions is no, then don't do it. Rent the place on a 5 year lease, make your own improvements and put the purchase price into Bitcoin. I bet you will be happy in 5 years time!
Re: Buy soft-title apartment in PP
samrong01 wrote: ↑Sun Apr 04, 2021 7:15 am As you can see from the above postings there are many ways to "own" or at least control a property. All of these ways involve trusting a Khmer person which may appear reasonable at the time but you never know what may happen in future. If you are talking about soft title then what are you really getting for your money? Long term lease may sound good but really its just paying rent in advance - how could you sell such a lease? Also consider what may happen in the event of your death.
Since you are already renting the apartment why not continue to do so? Keep your money in the bank or whereever and use it to make money to cover the rent and possibly more. You will also have the flexibility to change residence in future and if anything happens to the soft title or the building in general its not your problem.
Also consider what may happen in the event of your death.
This is another serious risk. You are the only person that stands between the owner - who just took $60k off you for a 50 year lease - from suddenly getting the keys back and the paperwork ending up in the fire.
Good luck trying to bequeath that lease, OP, have you seen the hoops you have to jump through just to get a will recognised here?
- armchairlawyer
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Re: Buy soft-title apartment in PP
Also bear in mind that soft title is not the same as ownership. Technically it is a right of possession.
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Re: Buy soft-title apartment in PP
Each to their own and a lot will depend how risk averse one is.
Frankly, and if I wanted to buy property here, I'd have more faith putting it in Mrs Cargo's name than these nominee/lease 'workarounds'.
As Doc67 said, and despite what sellers and agents will say, the gov't intent is clear..they don't want private foreigners buying up their land. Hence why I call these other ways to get around that: 'workarounds'. And one day, if and when it gets abused, the authorities will put a stop to it one way or another. They've only got to get the idea from their Thai counterparts.
The other thing is, it's hard to make a long term decision on a 'buy and live in basis' when you can't get permanent residency. So far, the arrangements for retiree expats for example are good and easy here but again, they might just copy Thailand and enforce things like show proof of sufficient income, health insurance, deposit sufficient funds into a local bank account and attend a local gov't office to have your visa/extension renewed. So all that could change in the not too distant future.
Another thing, imo real estate here is relatively expensive for what you get and in comparison, rents are quite low. If one is thinking of capital gain, I think the good money's already been made years ago and I wouldn't necessarily expect too much there. No one can predict that of course but interestingly I found this post the other day on that..
Frankly, and if I wanted to buy property here, I'd have more faith putting it in Mrs Cargo's name than these nominee/lease 'workarounds'.
As Doc67 said, and despite what sellers and agents will say, the gov't intent is clear..they don't want private foreigners buying up their land. Hence why I call these other ways to get around that: 'workarounds'. And one day, if and when it gets abused, the authorities will put a stop to it one way or another. They've only got to get the idea from their Thai counterparts.
The other thing is, it's hard to make a long term decision on a 'buy and live in basis' when you can't get permanent residency. So far, the arrangements for retiree expats for example are good and easy here but again, they might just copy Thailand and enforce things like show proof of sufficient income, health insurance, deposit sufficient funds into a local bank account and attend a local gov't office to have your visa/extension renewed. So all that could change in the not too distant future.
Another thing, imo real estate here is relatively expensive for what you get and in comparison, rents are quite low. If one is thinking of capital gain, I think the good money's already been made years ago and I wouldn't necessarily expect too much there. No one can predict that of course but interestingly I found this post the other day on that..
Spoiler:
Re: Buy soft-title apartment in PP
OK, my coming out.... I own two houses in Cambodia, one for ourselves and one for tourists to rent after covid has gone, and some land. All situated in the Northeast. Total money spent over the years about 75k USD. Current value probably higher. Have been living without the costs of rent for about eight years now because of that so that money can be deducted.
Even though I feel like I own it all, legally I don't. It's all in my 'wife's' name. But if I decided I wanted to sell part of it tomorrow, my 'wife' would agree.
If my 'wife' wanted to, she could kick me out tomorrow and cash in on all those properties, or sell (part of) it, but for some reason she hasn't done that. Key factor for me in this story is we have a nine year old kid together. Another key factor is I trust my 'wife' more than I trust myself. I bought the first piece of land after we'd been together for about three years and our kid was nearly a year old.
At least my 'wife' and I have a common interest - the future of our kid.
I guess, some Khmer girls actually make good wives.
I would never buy land / house in a nominee structure, not even with a Khmer friend as a nominee. It's too unpredictable in the far future.
I accept the insecurity, and the risk I lose it all, but my perception is after all these years together that risk is low. If shit hit the fan I could afford losing those properties.
Even though I feel like I own it all, legally I don't. It's all in my 'wife's' name. But if I decided I wanted to sell part of it tomorrow, my 'wife' would agree.
If my 'wife' wanted to, she could kick me out tomorrow and cash in on all those properties, or sell (part of) it, but for some reason she hasn't done that. Key factor for me in this story is we have a nine year old kid together. Another key factor is I trust my 'wife' more than I trust myself. I bought the first piece of land after we'd been together for about three years and our kid was nearly a year old.
At least my 'wife' and I have a common interest - the future of our kid.
I guess, some Khmer girls actually make good wives.
I would never buy land / house in a nominee structure, not even with a Khmer friend as a nominee. It's too unpredictable in the far future.
I accept the insecurity, and the risk I lose it all, but my perception is after all these years together that risk is low. If shit hit the fan I could afford losing those properties.
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Re: Buy soft-title apartment in PP
Thats the perfect mindset to survive any failure in any marriage. Never "invest" more than you can afford to lose.Kammekor wrote: ↑Sun Apr 04, 2021 3:24 pm
I guess, some Khmer girls actually make good wives.
Some do, some wont. Nobody can predict. Treat any woman well and you lower the risk of getting into trouble.
I accept the insecurity, and the risk I lose it all, but my perception is after all these years together that risk is low. If shit hit the fan I could afford losing those properties.
work is for people who cant find truffles
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Re: Buy soft-title apartment in PP
Hi everyone, thanks for all the info and thoughts, it’s very helpful indeed.
Whether to buy an apartment in PP at all or not is certainly a very personal decision. Risks are massive for an investment over 10-20 years here. You can get screwed legally, because someone changed the law, get screwed illegally because someone just takes what’s yours. Also war, civil-war etc. can mean a total default on the investment. I probably wouldn’t consider this, if it tied up all my assets.
On the other hand for me it makes sense to invest in a place that I expect to live in for the foreseeable future. Before PP I lived in China for 15 years, 9 yrs of that in Shanghai, and I’ve experienced how a place, that I originally liked and enjoyed, makes less and less sense once it gets more prosperous and it’s ever more difficult to carve out a living. Maybe even worse is the emotional hardship of feeling left behind. So both emotionally and financially it makes sense to participate. If PP prospers and gets more expensive, I prosper too. If it doesn’t it’s ok too, because then financial pressure won’t build up either. Not sure if that makes sense for everyone, just my experience. Of course Cambodia is not China and PP is not SH, but 20 years ago China and SH didn’t look like a safe bet to me either. These things are a lot clearer in hindsight.
And sure on the reward side we all have very different expectations. For myself I see good opportunity. Inflation is high here so I would not be surprised to see overall price level double in 10-15 years, real-estate even more. PP won’t be the same then, but it’s easier to accept change here if it positively affects my own bottom line. As for the timing, it looks like a good opportunity. There is fear here now, masks, curfew… I’m not judging, just observing. Covid doesn’t seem to go away from people’s perceptions. Times of fear and panic is usually a good time to buy, if you believe in the asset.
In hindsight I have seen a few good opportunities in my life, they come along every so many years. Most of them I missed. I think this might be one of those times when I would, with hindsight, ask myself why I didn’t pull the trigger. So currently I’m trying to find a way that minimizes my personally perceived risk, and then decide if it’s worth taking.
As for the different options, from what I understand there are exceptions to those rules (?) and I might be able to find out by going to the authorities.
I would consider Nominee structure, but only if the nominee is a professional service provider like IPS, simply because they have something to lose (their reputation) if they screw their customers. That doesn’t make it safe, but safer IMO. So I will ask them and maybe one other service providers for info and quotation, to see if this makes sense.
I’ll keep you all updated if I get anything useful. Thanks again y’all.
Whether to buy an apartment in PP at all or not is certainly a very personal decision. Risks are massive for an investment over 10-20 years here. You can get screwed legally, because someone changed the law, get screwed illegally because someone just takes what’s yours. Also war, civil-war etc. can mean a total default on the investment. I probably wouldn’t consider this, if it tied up all my assets.
On the other hand for me it makes sense to invest in a place that I expect to live in for the foreseeable future. Before PP I lived in China for 15 years, 9 yrs of that in Shanghai, and I’ve experienced how a place, that I originally liked and enjoyed, makes less and less sense once it gets more prosperous and it’s ever more difficult to carve out a living. Maybe even worse is the emotional hardship of feeling left behind. So both emotionally and financially it makes sense to participate. If PP prospers and gets more expensive, I prosper too. If it doesn’t it’s ok too, because then financial pressure won’t build up either. Not sure if that makes sense for everyone, just my experience. Of course Cambodia is not China and PP is not SH, but 20 years ago China and SH didn’t look like a safe bet to me either. These things are a lot clearer in hindsight.
And sure on the reward side we all have very different expectations. For myself I see good opportunity. Inflation is high here so I would not be surprised to see overall price level double in 10-15 years, real-estate even more. PP won’t be the same then, but it’s easier to accept change here if it positively affects my own bottom line. As for the timing, it looks like a good opportunity. There is fear here now, masks, curfew… I’m not judging, just observing. Covid doesn’t seem to go away from people’s perceptions. Times of fear and panic is usually a good time to buy, if you believe in the asset.
In hindsight I have seen a few good opportunities in my life, they come along every so many years. Most of them I missed. I think this might be one of those times when I would, with hindsight, ask myself why I didn’t pull the trigger. So currently I’m trying to find a way that minimizes my personally perceived risk, and then decide if it’s worth taking.
As for the different options, from what I understand there are exceptions to those rules (?) and I might be able to find out by going to the authorities.
I would consider Nominee structure, but only if the nominee is a professional service provider like IPS, simply because they have something to lose (their reputation) if they screw their customers. That doesn’t make it safe, but safer IMO. So I will ask them and maybe one other service providers for info and quotation, to see if this makes sense.
I’ll keep you all updated if I get anything useful. Thanks again y’all.
Re: Buy soft-title apartment in PP
Just a thought. The big grandpa running the show here is in his sixties now. The next ten years there will be an exchange of the powers that be. That exchange will happen in Phnom Penh, not in the provinces. It might be a non event, or shit might hit the fan in Phnom Penh. Given the history of this country I would give that some thought and consider it a major difference compared to China.
Re: Buy soft-title apartment in PP
Doc gave you some good advice. The law is clear. Strata titled apartments/condos are legal for foreigners to own. Everything else is not legal for a foreign individual to own.
So if you buy a soft title you don't legally own the land/building/house you are supposedly buying.
Don't kid yourself.
So if you buy a soft title you don't legally own the land/building/house you are supposedly buying.
Don't kid yourself.
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Re: Buy soft-title apartment in PP
What do you call high?rabbit_ear wrote: ↑Sun Apr 04, 2021 5:09 pm
And sure on the reward side we all have very different expectations. For myself I see good opportunity. Inflation is high here so I would not be surprised to see overall price level double in 10-15 years, real-estate even more. PP won’t be the same then, but it’s easier to accept change here if it positively affects my own bottom line. As for the timing, it looks like a good opportunity. There is fear here now, masks, curfew… I’m not judging, just observing. Covid doesn’t seem to go away from people’s perceptions. Times of fear and panic is usually a good time to buy, if you believe in the asset.
Inflation in Cambodia in 2020 was 2.54%. In 2019 it was 2.01%.
Real estate prices generally fell in 2020.
The only good prospect for real estate price increases for the foreseeable future would be land in the provinces, bought at the right price.
As for trusting in the long-term reputation of a real estate agent, what could possibly go wrong?
It's a common investment mistake to miss opportunities at market lows and then to go all in at the top of the market.
If you have a good Khmer lady you can trust (like Kammekor) I would say do it regardless but without that, no.
If you do go ahead, trust in a good lawyer as opposed to an agent.
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