Soft vs Hard Title Deed

When talking about ownership of land properties in Cambodia, a question might be simply asked: do you hold soft or hard title deed for your owned property?

Soft Title Deed: an ownership certificate which is, during ownership transferring or registration, only recognized at the commune and district level. Low cost, high risk as there might be many people who own or claim on one property, no paying tax issues etc…

Hard Title Deed: an ownership certificate which is, during ownership transferring or registration, not only recognized at the commune and district level but also at ministerial level and is issued by the Cadastral Office. High cost, low risk as there is only one owner, paying tax issues etc…

During the recent real estate boom and nowadays, when buying and selling the properties, many transactions or ownership transfers are still largely done with soft title deeds and at the commune and district level. The main reasons are that the related parties (sellers, housing developers, buyers, speculators etc…) want 1) to do quick transaction which is usually done less than a week, 2) to avoid paying the higher transaction costs including property registration tax at 4%, ownership transfer fees, other taxes and the ownership transferring process at the Cadastral takes more than a week or sometimes than a month.

For home loans, here in Cambodia, most commercial banks accept only the hard title deed of property as collateral pledged when home buyers seek loans from them. Although Acleda Bank also accept soft title deed and the interest rate charged is relatively high at 13% p.a. or even more than this for other private lenders .