The government has issued a warning aimed at low- and middle-income earners about the rise in fake subdivision projects, which has cost many people their savings.Some companies acquire large plots of land and say they have subdivided the land to make a housing estate and sell housing plots, despite not having official approval for their projects.
This has led to a number of people losing money.
Chea Sophara, the Minister of Land Management, Urban Planning and Construction, issued the warning and said his ministry has been taking measures to get local authorities to crack down on subdivision and construction projects that are cheating low- and medium-income groups and civil servants.
“Sometimes we meet those who have been cheated by a company and most of those buyers are civil servants and teachers,” he said.
“They buy into a project when they only have a small budget and then suffer a big loss. Recently there was a project that cheated people by putting on pressure and luring people to buy, but I don’t want to name the project and I have ordered authorities to solve the problem,” he added.
“There are measures and checks for people to take with the local authorities in every area and every company that has construction projects are required to be checked.
“Some people as well as civil servants do not know or understand the procedures, so please go and check with the local authority.”
Subdivision projects are very popular among Cambodian buyers, generally due to their low price, but there are high risks when buying into such projects, according to local experts.
Local experts also called for buyers and authorities to become more involved to help people avoid any losses.
Chrek Soknim, the CEO of Century 21 Mekong, welcomed the minister’s action, saying it was another good reminder for people before they buy into housing projects.
“The land subdivision projects are very popular due to the very affordable price, but people don’t know they take a high risk by buying in,” he said.
“The developers buy big plots of land via a deposit and then they announce they have subdivided the land and put it up for sale without any legal documents.
“These types of cases not only happen in Cambodia, but in other countries too, including developed countries. Our country is now experiencing these types of cases.
“Generally, people see these deals as very affordable for them and they go straight to buy it before other people buy it before them.
“But I think there are still good projects for sale and to buy into out there.
“There are procedures for land subdivision projects that people need to know about. First, don’t be afraid to ask for the developer’s land title in the project and legal document for subdivision projects.
“People have to look to see if the developers have fulfilled all the legal documents for projects,” Mr Soknim added. “I recommend that if the developer has not done this, then don’t buy it.
“We need to encourage people to know about and ask for all the information about a project, while local authorities should not be quiet.
“They should go and check the projects where sales have been announced without any official permission.”
Meanwhile, construction investment during the first nine months of the year reached $5.63 billion, up 22 percent over the same period last year, with a total increase of $5.636 million, according to a report from the Ministry of Land Management.
The ministry approved 2,522 projects worth about $5.63 billion, an increase of 22 percent on the same period last year.
The majority of projects approved this year were condominiums, housing, factories, enterprises, hotels and office buildings.