A construction worker at a borey in Phnom Penh prepares bricks for construction. Hong Menea
Public-private talks have begun on a potential informal foreclosure moratorium for residential properties recently suggested by Prime Minister Hun Sen.
Addressing workers in Kampong Chhnang province on June 9, the premier asked owners and developers of residential properties, especially the – typically gated – complexes known locally as “borey”, to temporarily stop foreclosing on individuals who may be unable to meet their repayment obligations. He recommended credit restructuring as a “peaceful” alternative.
The plea comes after scores of recent reports of foreclosures due to non-payment were filed to different government agencies. The Council for the Development of Cambodia (CDC) and Real Estate Business and Pawnshop Regulator (RPR) said they had respectively received 154 and 12 such reports as of the morning of June 12.
A total of 53 of the CDC reports, or 34 per cent, were said to come from residents of about 30 different boreys.
On June 9, the Housing Development Association of Cambodia (HDAC) issued a notice to members asking them to thoroughly go over the financial circumstances of customers who may be struggling, to be accommodating with regard to payment arrangements, and to postpone foreclosing on properties.
Three days later, HDAC president Ly Hour held a meeting at his office with RPR director-general Chou Vannak, CDC secretary-general representative Lim Visal and other stakeholders concerning the prime minister’s appeal and possible course of actions.
HDAC secretary-general Huy Vanna assured The Post on June 13 that the association has established that no members were engaged in any of these recent foreclosure cases. Although no customers have called the HDAC to complain, there have been inquiries into related matters, he acknowledged.
Nevertheless, the HDAC is set to conduct a thorough investigation on the situation, he stated.
“Discussion at the meeting involved a detailed study to be carried out between the HDAC and the authorities to ascertain whether there has actually been a material increase in these cases, but no decision in principle has been made as of yet,” he added.
Vanna insisted that companies among the HDAC’s ranks consistently work to accommodate customers with problems while giving them decent homes in which to live. These firms “have no intention of foreclosing on properties”, he affirmed, remarking that some residents do indeed opt to leave their homes voluntarily.
Global Real Estate Association president Sam Soknoeun commented that the informal foreclosure moratorium will be key in ensuring that individuals have decent housing and preventing homes from being taken away from them as soon as they run into financial trouble.
He contended that the prime minister’s credit restructuring option would be the “best and smartest way” to deal with repayment issues.
“However, if there is a foreclosure, developers and creditors must also talk with the buyer about the repayment of some of the money previously paid,” Soknoeun opined.
