Cambodia Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Cambodia landlord and tenant laws are judged by the Global Property Guide to be slightly Pro-Landlord between landlord and tenant. Cambodia leans more towards pro-landlord, with landlords enjoying greater control over property terms, rental prices, and lease conditions. However, tenants can still negotiate favorable terms, especially with long-term commitments, and they have some protection through well-drafted tenancy agreements (which is key to a good experience in Cambodia).

Rents: Can landlord and tenant freely agree rents in Cambodia?

The parties to a property rental contract may freely negotiate the terms - the rent, period of lease, rental fees, other legal rights and obligations, renewal, rent increase, and the conditions for the termination of the contract.

Cambodian Laws do not regulate increases in the rent at renewal of the contract, or specify any method. The landlord shall inform the tenant if he wants to increase the rent within a reasonable time (as specified in the contract). Both parties can then negotiate the new rent. If the negotiation fails, the contract may be terminated.

Lease registration may be required for long-term agreements. In Cambodia, rental agreements typically include fittings, fixtures, and condominium maintenance fees, but exclude utility bills for water and electricity, which are usually the tenant’s responsibility. Most serviced apartments come with internet and cable TV, though some landlords charge an additional fee for these services. Rent is generally payable monthly in advance.

Security Deposits

The required security deposit in Cambodia depends on the lease's duration and type (Company Lease or Personal Lease). Typically, the deposit is equivalent to 1 to 2 months' rent and is payable in full upon signing the Tenancy Agreement. The deposit is refundable without interest at the end of the lease, provided the tenant adheres to the terms and conditions of the agreement. The landlord retains the right to deduct from the deposit any costs incurred due to the tenant’s breach of the agreement. Tenancy Agreements are usually drafted in both Khmer and English; however, in the event of a dispute, the Khmer version will take precedence.

What rights do landlords and tenants have in Cambodia, especially as to duration of contract, and eviction?

The lease period in Cambodia typically starts at 6 months, with or without an option to renew. Rental negotiations often depend on the length of the tenancy commitment; generally, the longer the lease term, the more likely landlords are to offer a discount.

A lease contract can be made for an undetermined period (though an undetermined lease may not exceed 12 years), or a determined period, which can be long term (15 years) or short term. There can be an option to renew, by mutual agreement between the parties.

If no prior notice is given by either party and there is no clause mentioning the automatic termination at the end of contract, in the case of both determinate and indeterminate contracts, the contract is automatically renewed.

Termination of the contract by either party is not easy, if the lease contract does not contain a termination clause. Cambodian Laws do not set out a suitable prior notice period for eviction at the end of a lease, except in the case of the undetermined lease contract, which requires at least one or two months prior notice for its termination. Therefore it is very important to insert a termination clause in the contract, providing a suitable prior notice for termination of the contract.

Termination before the contract's date of expiry by the landlord is possible if:

• The tenant does not perform his obligations or
• The tenant improperly uses the lease property in a manner inconsistent with its normal function or
• The tenant uses the property in a manner which causes damages to the leased property.

Subleasing is prohibited, unless explicitly permitted by the contract.

Clauses for terminating the contract before its expiry date may be included in the contract. In the absence of such a clause, the suffering party shall be entitled to remedies and damages, in accordance with the lease contract and/or the court's decision.

The effectiveness of the legal system

Disputes between landlord and tenant are resolved through the ordinary provincial or municipal courts. Two attempts at reconciliation in front of a handling court clerk or judge are required, after the filing of the complaint, before the trial hearing.

The timeframe for the trial process is not clearly defined by law.

If one party is unsatisfied with the court's decision, he can appeal to the higher courts.

Legislation

Laws and Regulations which cover Landlord and Tenant issues:

• Land Law dated August 30, 2001; and
• Decree-Law No. 38 dated October 28, 1988.
• Circular No. 01 Dated January 18, 1990 regarding the management of Residences and Land Leased to International Organizations, Foreign Companies and Foreigners.

Under the 2011 Cambodian Civil Code, landlords are required to comply with certain rules and obligations, including providing a safe and habitable property for tenants. While there are no direct regulations for rental prices, these obligations can indirectly influence rental price negotiations.

Brief history

Cambodia does not have one law which entirely states the rights and obligations of landlord and tenant. There are two different laws (Land Law, dated August 30, 2001, and the Decree-Law No. 38, dated October 28, 1988). There are also regulations (such as Circular No. 01SR on the management of residence and land leased to International Organization, Foreign Companies or Foreigner dated January 18, 1990), which authorizes Cambodians to lease their real properties to international organizations, companies and guests.

Decree-Law 1988 defines the validity and types of frequently used contracts, and has governed contract law in all transactions since the 1993 election.

The 2001 land law provides only general provisions. Detailed formalities regarding real property leases will be issued later, by Sub-Decree of the Royal Government of Cambodia.