WSG Article: Cambodia: Latest Construction News

Cambodia: Latest Construction News – January 2021

January, 2021 - Segolene Leffy

New Sub-Decrees on Construction Permits, Conditions & Procedures on the Issuance, Suspension & Revocation of Certificate of Occupancy, and Conditions & Procedures on Construction Certification

New Sub-Decree on Construction Permits

Following adoption of the Law on Construction dated 2 November 2019 (“Construction Law”), the Royal Government of Cambodia issued new Sub-Decree No. 224 ANKr.BK dated 30 December 2020 on Construction Permits (“Sub-Decree 224”) to determine the conditions and procedures on issuance of permits for construction, repair, demolition, site opening and their subsequent renewal (“Permits”) which were previously governed by Sub-Decree No. 86 ANKr.BK dated 19 December 1997.

Sub-Decree 224 reaffirms that the competent authorities to issue such Permits remain the Ministry of Land Management, Urban Planning, and Construction (“MLMUPC”), or the Governor of Capital-Provincial or District administrations, depending on the nature and particularly the size and height of the construction. The construction permit remains valid for one year and can be renewed only once.

The new Sub-decree also extends its scope of application to non-building construction such as antennas, electrical poles, towers, gates, stupas, construction related to down-stream activities, etc., which previously did not fall within the scope of such permits.

Any failure to respond to the application of the Permits by the competent authorities within the stipulated timeframes in this Sub-decree will be deemed as implicit approval of the applications by the authorities.

Significantly, Sub-Decree 224 set outs forms of construction for which the construction permit is not required. This mainly concerns small-scale construction such as buildings with a floor area of less than 12 square meters or less than 5 meters in height, mixed wood/ concrete housing with a floor area of less than 100 square meters and less than 9 meters in height etc.

For a real estate development project, a construction permit application must be accompanied by a land development permit issued by a competent authority.

Sub-Decree 224 replaces and supersedes previous Sub-Decree 86 dated 19 December 1997 and any provisions contained in any other regulation that is contrary to this Sub-decree.

Sub-Decree on Conditions & Procedures on the Issuance, Suspension & Revocation of Certificate of Occupancy and the Sub-Decree on Conditions and Procedures on Construction Certification

As another implementing tool of the Construction Law, Sub-Decree 226 ANKr.BK dated 30 December 2020 (“Sub-Decree 226”) was issued setting out the conditions and procedures for the issuance, suspension and revocation of certificates of occupancy, change of building function, quality inspections, construction safety and control of dangerous buildings.

According to Sub-Decree 226, all forms of constructions which require construction permits must obtain a certificate of occupancy after the construction work is finally completed. This certificate of occupancy is valid permanently regardless of changes in ownership. However, when there is a change of building function, a new certificate of occupancy will be required.

The construction owner may apply for a temporary certificate of occupancy for a portion of construction which is already built and safe to use. The temporary certificate is valid until a final certificate is issued.

In the event that a certificate of occupancy is suspended or revoked, usage of the building is also prohibited.

A site closing permit obtained prior to the issuance of this sub-decree may be equally served as a certificate of occupancy. It is implied in Sub-Decree 226 that a certificate of occupancy will replace the site closing permit which was required under Sub-Decree 86.

The use of a building without duly obtaining a certificate of occupancy may lead to a maximum single penalty of KHR 80 Million (approx. USD 20,000) and other legal action as may be pursued by the construction inspector.

There is another sub-decree to implement the Construction Law, Sub-Decree No. 225 ANKr.KB dated 30 December 2020 (“Sub-Decree 225”).

Sub-Decree 225 determines the types and levels of licenses for the purpose of endorsing the construction, along with the conditions and procedures for the issuance, termination, renewal, suspension and revocation of such licenses.

Under this sub-decree, there are 4 types of construction certification (endorsement):

General construction certification;
Architectural construction certification;
Structural construction certification; and
Mechanical/electrical/water construction certification.

The particular criteria to obtain these licenses depends on the type and level of each license such as minimum registered capital ranging from KHR 100 million to 1 billion (approx. USD 25,000 – 250,000), minimum required years of experience from 10 years to 20 years to be a technical director, minimum numbers of engineers or architects and professional liability insurance issued by a Cambodian insurance company.

Professional liability insurance may be undertaken with a minimum deposit by the applicant at the National Bank of Cambodia depending on the type and level of each license ranging from KHR 50 million to 500 million (Approx. USD 12,500 – 125,000).

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

Contacts

Seka Hep