Pursuant to the announcement made at the 19th Royal Government-Private Sector Forum on 13 November 2023, and in alignment with the recommendations by the Prime Minister of Cambodia, Samdach Thipadei HUN Manet, on 1 July 2024, the Real Estate Business & Pawnshop Regulator issued a critical new Notification on Obligations of Real Estate Developers and Condominiums (“Notification”). This Notification introduces penalty exemptions for real estate developers specifically developers of borey and condo for a certain period, aiming to bolster the construction and real estate sectors.
The key highlights of this Notification are as follows:
Exemption from Fines and Penalties: Effective from 01 July 2024, developers of borey and condos may enjoy a one-year exemption from fines and penalties, provided they comply with the obligations imposed under Prakas No. 047. This grace period extends until 01 July 2025, or longer if the government decides to extend it, providing a window of opportunity for developers to meet regulatory requirements without financial repercussions.
Implementation of Prakas No. 047: To be eligible for this exemption, real estate developers must adhere to the obligations imposed under Prakas No. 047 on the Rule and Procedures on Licensing and Permits for Real Estate Development Business, dated 26 September 2023 which primarily covers the rules and procedures for licensing applications for real estate development businesses as well as the compliance obligations of real estate developers.
Mandatory Licensing Compliance: real estate developers that have not yet obtained licenses are required to apply for licenses within this exemption period. Failure to secure the appropriate development licenses before the expiration of the exemption period will result in the reinstatement of fines and penalties.
Implications for the Real Estate Sector:
This Notification represents a strategic move by the Cambodian government to stimulate growth and compliance within the real estate sector. By offering temporary relief from fines and penalties, real estate developers are incentivized to regularize their operations and align with regulatory standards.
Real estate developers are encouraged to take full advantage of this exemption period to secure the necessary licenses and ensure compliance with Prakas No. 047. The government’s supportive stance underscores its commitment to creating a conducive environment for sustainable development and investment in the real estate sector.
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