How to check the validity of real estate sale & purchase agreement ?

• 29 December 2022
• Property Focus
• 3958 Views

According to Civil Code 2007, the sale and purchase of real estate must be made​ in three forms such as (1). Contract Written by Notary, (2). Contract Sealed by Commune, Sangkat or City, District, Khan Administration, (3). Contract Certified by Notary. (Read more)

However, for real estate developers, the agreement can be quite different especially when the case involves instalments and a down payment.

Prakas No.089 SHV. BRK dated 20 January 2020 on The Management of Real Estate Development Business has required the agreement made by the real estate developer must follow the criteria as below:

• Name of developer and buyer along with verified the ID and address of both parties with witnesses
• Project location, land size, and agreed sale and purchase price, obligations of the parties responsible for paying the transfer tax and other fees
• Project completion date
• Name along with the bank’s location and the number of the real estate development account that the developer must open in accordance with Article 30 of the above Prakas (for developers who obtained license type 2)
• Procedures and date of payment
• The amount to be fined for late payment must be proportional to the amount to be fined for late construction.
• Rights of buyer related to land or private units and common areas
• Rights to terminate the agreement
• Obligation on title conveyance (In general, developers are in charge of this stuff) (Read more)
• Responsibility for construction quality and safety
• If the land is leased from the state or private, the developer must verify the period for which the buyer has the right to occupy the property and the date of commencement and termination of rights (Read more)
• If there are any encumbrances on the land, the developers must inform buyers of those and secure the legal title conveyance after the buyer has done the payment.

Developers holding Type 1 licenses or permits can process transactions/agreements only when the construction project has been completed with a site closing permit, construction quality verification and/or assessment from the competent authority. (Read more)

However, developers holding Type 2 licenses or permits can already process transactions/agreements when a construction permit and/or site opening permits have been approved.

In the absence of these two permits, the developers are entitled to receive an initial deposit of only 1% of the sale price (Article 22 of Prakas No. 089 MEF.PrK).

 

• Laws and Regulation