Some longer term residents complain that things have gotten expensive here over the last decade and, comparatively speaking, this is true. But renting a house or apartment in Phnom Penh is still a steal compared to just about anywhere else in the world right now.
This can be a very satisfactory situation if you’ve just arrived here from a distant land where rents are extortionate. If you’re lucky enough to arrive on a fat tax-free expat salary package, even better.
The Phnom Penh market experienced a boom through the noughties with some properties in sought-after areas, such as Beoung Keng Kang 1, doubling and tripling in value. House prices in some suburbs reached levels the envy of much richer countries. Property development also took off during this time and the skyline is now littered with half-completed office and residential complexes. Rents may have risen but have not kept pace with property prices, a sure sign of a bubble.
The boom came to an abrupt halt at the time of the Global Financial Crisis as the expected flood of international investors and businesses failed to arrive to occupy these newly-constructed palaces.
The property market is now overdue for a correction but so far this has failed to materialise. Landlords often seem willing to leave apartments unoccupied rather than drop their asking price. This may be because the valuations here are not strictly driven by market forces. A lot of property may well have been purchased as a way of salting away ill-gotten gains and the owners are not hurting enough to consider liquidating their investments.
Property prices remain on a knife-edge. At some point, this may change but when is anybody’s guess. In the meantime, there is rental accommodation available to suit most budgets, depending on the size your wallet and your expectations.
Rule No 1 : be willing to do the hard yards
Most foreigner new to Phnom Penh will automatically gravitate to an real estate agent. These are not hard to find. However savvy seekers of the perfect pad will soon discover that your bargaining power is greatly enhanced if you do what most of the agents do: hit the streets and look out for “for rent” signs.
Hire a tuk-tuk and take a trip around the neighbourhood you fancy. Scribble down the accompanying telephone number and give the owner a call. He won’t be forced to pay an agent the first month’s rent so this should give you an edge in the negotiations.
Make sure you insist that anything that needs to be fixed is fixed before you move in. Owners are generally at their most accommodating at this stage. They may prove much less so once your actually ensconced in your new digs.
Also, try to find out how good a landlord they are? This may not be feasible but it is worth a try. Forewarned is forearmed. Recourse to the law doesn’t always work here and horror stories abound of tenants being roundly ripped off by unscrupulous landlords, especially when it comes time to evacuate.
First and foremost, find out who you are renting from, whether you use an agent, online classifieds, or call a number off a “for rent” sign. At the very least, meet the landlord in person to discuss the property and the terms of the lease. And if something about the deal doesn’t strike you as right, take the time to investigate further. You may regret at leisure if you don’t. Never allow yourself to be rushed.
Second, you need to confirm that the person who presents themselves as the landlord is so in fact as extended families frequently live and manage properties communally here in Cambodia. The legal landlord is the person with their name on the title document and it is important to establish who this person is. Ask to see the title or, if none is available, the land purchase contract.
Finally, beware of construction sites and other potential noise hazards. You may be away at work all day but will not enjoy being woken up by the sound of a jackhammer or cement pumps at six in the morning – especially on the weekend!
Closing the Deal
Real estate agents generally provide you with a form contract. If this is who you are dealing with, consider it as an opening proposal. Never take anything for granted and don’t made the mistake that what is happening is the same as back home. Here more than anywhere, verbal agreements are not worth the paper they’re written on. Make sure it is all written down and signed off on.
All the significant terms should be open to negotiation and need to be settled before you move in. This can require a high degree of patience but becoming aggressive here is generally counterproductive. Nevertheless it pays to be firm.
Contracts should be in English and Khmer, and should include a clause making both copies equally binding. Rental terms may be fixed-period, month-to-month, or even year-to-year. Rarely are they for longer than three years but a clause giving right of renewal of the lease may be included if you think you might want to extend beyond the expiration.
Recognise that Cambodian law imposes few restrictions on the terms of the contract. Future rent increases are often at the whim of the landlord unless otherwise specified but you should be forewarned within a reasonable period before it occurs. Both parties can then negotiate the new rent. If the negotiation fails, the contract may be terminated.
You will be expected to provide a payment of rent in advance. This is standard practice. The most common is equal to three months to six months’ rent, depending on the lease duration. Security deposits are rare. Ensure the amount is clearly stated in the lease agreement. Moreover, with any cash payments – deposit, rent, or utilities – insist on a signed receipt. This could be your only record in case of a dispute.
Finally, get a signed copy of the lease for your own records.
Coming to Grief
Generally speaking leases as with other contracts, are there to benefit Khmers, not foreigners. If you abrogate your lease, expect trouble. If your landlord decides to do so, usually there is not much you can do about it – unless you have powerful connections and the landlord is willing to compromise.
Unlike most western countries, Cambodia has no specialized landlord-tenant dispute resolution procedures. Suing your landlord is also not a road many tenants willingly choose to go down given the challenge of engaging with the Cambodian court system.
In Cambodia, most disputes can generally be resolved through negotiation, however, and rental conflicts are no exception. But as a foreigner, recognise that you have no automatic “rights” and therefore are somewhat on the back foot if things turn nasty. Approaching your landlord in a non-confrontational manner usually produces are better outcome. Often some type of compromise on your part will help seal the deal. Remember, you could end up being evicted and losing your security deposit if things go horribly wrong.
Disputes with neighbours can also be tricky. Many things we take for granted are simply not regulated here in Cambodia, such as noise, parking spaces, and trash. Don’t try to solve these issues yourself. Most likely your landlord will know the neighbour well already. Ask him to speak on your behalf.
If the problem remains unresolved, you could try complaining at the local Sangkat (commune) office. With payment of a modest fee, they can mediate between you and the troublesome neighbour. Again, patience and understanding are key to a successful resolution.
Avoiding problems when moving out requires a bit of foresight, particularly when first drafting your lease agreement. To avoid paying for damage you didn’t cause, be sure to do a full inspection with your landlord present before moving in.
It’s advisable to include a clause specifying when you can move out prior to the end of the lease, and when your landlord can evict you, as getting out of the lease can be difficult and costly if the contract doesn’t contain a termination clause. Ensure there is a penalty clause for early eviction included as while it may prove difficult to stop a landlord determined to show you the door, at least you should get compensated. Moreover, if there’s a chance your job will reassign you to a new location, a sublease and assignment clause could save your bacon.
Your landlord is allowed to deduct the reasonable cost of repairs for anything beyond normal use. This can be contentious as your idea and their’s of what constitutes “normal wear and tear” may be very different. It is not unheard of for landlords to insist that the residence needs to be fully refurbished on your departure. Unsurprisingly, this cost may prove to be almost exactly the same as the value of the bond.
Try to negotiate that whatever deposit you pay at the start gets converted into the final couple of month’s rent. This will help avoid any unpleasantness when the time comes and the landlord is suddenly reluctant (or unable) to reimburse your money.
Disclaimer: the above is general information only and does not constitute legal advice.