Avoiding the Complaints

• 31 December 2015
• Local News
• 2105 Views

Many lawsuits between property developer and buyer and property owner and constructor have been heard through the media. It is headache and costly to resolve those disputes inside or outside Cambodia’s court system. Many people admit it.

According to Dr. Sok Siphana, Managing Partner of law firm Sok Siphana & Associates, legal services provided by professional commercial lawyers can prevent those conflicts to occur that will benefit all the pertinent parties. Yet many still don’t value it.

Conflicts do vary between construction and property sector, he said. In the property industry for transactions related to private residential homes or land conflicts usually occur from not well sale contracts where terms are clearly written or spelled out. For transactions related to villas or apartments in a Borei or in condominium or co-owned buildings, the situation differs as buyer doesn’t have the bargaining power against the developer.

For construction sector, problems arise more from delay in construction, construction not meeting the project quality or technical specifications. In some extreme cases, the developer, suffering from the global financial crisis, abandons totally the project and left the buyers at a loss.

Good commercial lawyer can prevent the above issue to occur. In the property transactions, the lawyer can explain the essential terms in the sale contract. For the construction projects, they can advise owners as well as the main contractor about terms in the construction contract including the rights and obligations of sub-contractors.

Sometimes, problems may arise from late shipment of construction materials due to force majeure, i.e. major flood. These unexpected circumstances are usually the cause of the disputes, irrespective of the good intent of the parties, Dr. Siphana points out. “A good lawyer can anticipate these sorts of situation and incorporate good legal clauses to mitigate the damages.”

So, a good commercial lawyer has a pivotal role to ensure that the sale contract is drafted in a fair treatment and clear and understandable manner that both the seller and buyer know what it is expected of them, in terms of rights and obligations. It is because disputes generally arise when both the seller and the buyer interpret the same term but give it different meaning.

While he sees there are some good commercial lawyers who are providing legal services in the sectors, the main challenge is to convince the owners and developers to appreciate the value of sound legal advises. It is because people treat legal advices as costly, and they tend to believe that a good blueprint is all they need to start negotiating a construction contract.

“People don’t mind paying the architect or the engineer because they see physical outputs, i.e. good blueprint, and good architect rendering,” he said. “…Only when the problems arise then they come to see the lawyers, but it may be too late. Here a few thousand dollars saved may turn out to cost them hundreds of thousand dollars in lawsuits.”

According to him, Borei developers or big apartment project developers should use the services of legal practitioners, asserting that the legal service is not expensive considering that the projects are in the millions of dollars. The charge fees will depend on the types of services needed and negotiation between owner and the lawyer.