Timeframe of establishment of a Board of regulators in Co-Owned Buildings REF#5105

5 Sep 2023 | Real Estate & Construction Issue Tackled

Last modified date: 22 Sep 2023

Issue Description

Due to the growing numbers of condominiums in Cambodia, the Royal Government had to adopt regulations to govern Cambodia’s property management industry. One of them is the Sub-Decree No. 126 on the Management and Use of Co-Owned Building.

As stated in the sub-decree, a ‘Management Board or an ‘Executive Committee’ for the co-owned building management should be established. However, no specific details or guidance are provided as to when a ‘Management Board or ‘Executive Committee’ should be established.

Impact on business

Without specific guidance on the timeframe within which a ‘Management Board or an ‘Executive Committee’ should be established, discretion on when to enact this fall upon the developer. A co-owned building developer may wish to have minimal or no responsibility in relation to ongoing co-owned building management and consequently establish a ‘Management Board or an ‘Executive Committee’ upon launching or opening the co-owned building. Establishing a ‘Management Board or an ‘Executive Committee’ comprised of co-owners who are not property management professionals at this early stage could pose a high risk to establishing technical and property management services at a co-owned building. Conversely, a developer may not wish to relinquish property management responsibilities to a ‘Management Board or an ‘Executive Committee’ for many years due to the ability to charge a fee for such property management services.

Recommendation

  • Settle a timeframe within which a ‘Management Board or an ‘Executive Committee’ should be established.

Establish a timeframe within which a ‘Management Board / ‘Executive Committee’ should be established. This timeframe could be established for 2 years . Furthermore, prior to the establishment and handover to a ‘Management Board / ‘Executive Committee’, only a registered and regulated property management company may provide building management services.

Dialogue with

Royal government of Cambodia

Initiative from Eurocham: Request in the White Book 2019 (Recommendation No. 60) to Consider adopting a regulatory framework to govern the property management industry in Cambodia, and consult with the private sector to develop a set of standard operating procedures.

Royal Government of Cambodia: The Sub-Decree No. 126 provided guidance on the management of co-owned buildings but it could be improved by more specific provisions.

Initiative from Eurocham: The property management standards should cover three specific aspects: the charge collection in Co-Owned building, Having a board of regulators in Co-Owned properties and a timeframe to establish it. Hence for the 2023 Edition of the White Book, EuroCham created three recommendations to adopt a regulatory framework to govern the property management industry in Cambodia, and respectfully request settling a timeframe within which a ‘Management Board or an ‘Executive Committee’ should be established.

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