Cambodia – Buyer Beware Just Got Worse.

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Cambodia has struggled to clean up its reputation of being a high risk country when purchasing land or property.

imagesNumerous investors, both Khmer and Foreign, have lost their investment simply because they had failed to do extensive due diligence on the titles of ownership, leaving themselves  vulnerable to fraud and theft.

Last month we investigated another case of fraud committed against a foreigner who purchased a plot of land with his Khmer girlfriend in provincial Cambodia. Choosing to ignore advice that the couple should get a qualified company to conduct due diligence on the land titles and conduct extensive background checks on the supposed sellers of the land, the foreigner paid $125,000 usd for a large piece of land and received the signed soft title documents.

All seemed fine until the foreigner went to get the land titles changed to a hard title with the Ministry in Phnom Penh, only to discover that the sale documents, including the land titles and official stamps had been forged and the sellers he had given the funds to were not the real owners of the land.

rule-of-law-in-cambodiaBut that’s not what this story is about. This is about Cambodia’s reputation being further tarnished because of possible corruption, fraud and a lack of respect for judicial process at the highest levels. ‘Buyer Beware’ just took a right turn.

We are talking about todays’ article in the Cambodia Daily Newspaper titled ‘Ministry Sold Land From Under 163 Families’.

The article states that land in Phnom Penh had been in ownership dispute since 2005 but had been resolved by the Phnom Penh Municipal Court in 2011. Legalities had stalled the land being awarded to the owners identified by the Court until last Wednesday – a day when Cambodia’s reputation of “Buyer Beware’ took a right turn and got worse.

Just as the Court was about to hand over the land to the owners awarded by the courts, the Cambodian Ministry of Agriculture requested the Courts to suspend the land hand-over as they claimed that they were the rightful owners of the land and had given the land to a private company in 2009.

Corruption by officials in the Ministry of Agriculture? Incompetence by the officials at the Phnom Penh Municipal Court or a legitimate claim by the private company? – it matters little!


What does matter is that as of today, even with a judicial court order awarding land to an owner or investor, there is still a reasonable amount of risk that your investment can be taken away from you because ownership documents are not legitimate or there is some dispute on its bona fides.

The fact that Prosecutors, Judges and Lawyers who had been involved in the land dispute resolution could not identify that the Ministry of Agriculture had claim of ownership after 6 years of resolution, shows the pitfalls of Cambodia’s current land ownership system, highlights the lack of respect for the Cambodian Judicial system and exemplifies the incompetencies amongst the Cambodian Governments internal land sale processes.

So Buyer Beware – the necessity for extensive due diligence and background checks on your potential investment has never been greater.