CONDO DEVELOPMENT AND THE CAR PARK DILEMMA

CONDO DEVELOPMENT AND THE CAR PARK DILEMMA

By Matthew Rendall, Senior Partner, Sok Siphana & Associates

As I pointed out in Construction & Property Magazine Issue 19, developing condominiums, or mixed used apartment buildings, raises many issues that are not necessarily considered by the developer when embarking on a project. We previously noted the issue of an exit strategy necessitating a well thought out post developer building management arrangement.

However, there are also issues that arise during the construction and/or titling phase itself.

One of the most pressing issues now being encountered by many developers as they approach the finalisation of the project (i.e., titling) is how to deal with the car park. What developers will discover is that there is, as yet, no satisfactory, or easy, solution.

Most developers, not surprisingly, promise prospective apartment owners car park spaces for their private and exclusive use. This of course is common in condominium developments the world over. Given that there are now many foreigners buying into condominium developments in Cambodia (following the passage of the foreign ownership laws), it is now widely expected that new developments here will also allocate exclusive reserved parking spaces to individual apartments.

The problem is that, whereas in foreign countries there are mechanisms to allocate private ownership of car park spaces to apartment owners (such as by noting the corresponding car park space directly on the buyer’s Title Deed or on separate Deeds), that is not yet the case in Cambodia. In fact, in some jurisdictions throughout the world it is possible to sell the car park space separate to the apartment itself and, consequently, a trade in car park spaces exists (such spaces are in fact valuable and sought after commodities in some city centers where parking is a premium).

Currently though, there is no satisfactory mechanism under the laws of Cambodia to deal with car park ownership. At the moment the only laws addressing the topic of car park spaces are sub decree 42 which deals with the issue of how many car park spaces a development needs to include in its building plan (naturally it varies depending on size and type of development) and, the Land Law of 2001 and sub decree 128 dealing with management of co-owned buildings. Both of those laws address the issue of car parks as being part of the common area. For reason of the above laws, the Ministry of land Management Urban Planning and Construction currently sees car parks as common areas and therefore not eligible for separate individual ownership. So it is not yet possible to issue title deeds or ownership to car park spaces separate to, or even as a part of, the apartment ownership. In fact, given that car parks are deemed as common areas within the framework of the existing law, it is technically not permissible to deny any user of the condominium access to any particular part of the car park. This therefore prohibits the private allocation of a particular car park space to a specific apartment. Given the number of condominiums about to come on line, the Ministry is currently looking at this very real problem to try and come up with a workable solution. Hopefully we will soon see a regulation issued which addresses and solves this and gives apartment owners a space of their very own to park their SUV. For now though, property developers would be well advised to seek legal counsel as to what possible options exist under the current laws before making promises of car park ownership to prospective apartment buyers.

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