The outskirts of Phnom Penh is littered with billboards of ‘land for sale’ ads, and while plotted land is cheaper than purchasing a traditional bricks and mortar dwelling, real estate experts say plotted land buyers are at increased risk of getting a bad deal if they don’t tread with caution.

Mann Chandy, the CEO of real estate services firm Premium Housing which has been investing in numerous plots of land around Phnom Penh, told Post Property he was targeting low and middle income customers for his emerging project in Kandal province.

“Some of my customers have purchased plotted land to build houses, while some others have purchased to make a profit in the future based on improving infrastructure in the area,” he said.

Chandy said, unfortunately, he had seen many plotted land buyers and investors who have fallen victim to opportunists who scam people out of money.

“I have had to educate many people about the land buying procedures for plot land purchases so they can avoid the risk so that they won’t fall victim again,” he added.

Plotted-land sale transactions mostly occur in private, involving local authorities who do not have the rights to issue property owner certificates. Ministry of Land Management, Urban Planning and Construction (MLMUPC) deputy secretary Lao Tip Seyha previously told Post Property that only ministerial departments and the ministry itself have the right to issue property owner certificates. Therefore, buyers need to consider, and ask for property owner certificates from sellers to avoid wasting their money, and future complications.

Kim Heang, president of the Cambodian Valuers and Estate Agents Association, acknowledged there were companies involved in plotted land activity who were actively scamming innocent people.

“Their projects don’t have proper roads, sewage systems, clean water nor electricity, while some other opportunists ask 10 percent or higher of the land’s price to the new land owners just to convince them for plot divisions to put up on sale on a board,” he said.

“However, when they cannot sell them then they flee and make the land owners and buyers fall victim.”

To avoid this occurring, Heang urged potential buyers to make sure they only purchased from legitimate and reputable landlords.

“If the title does not belong to the owner of the land, do not buy,” he added.

Heang said while there were some unscrupulous plot land developers and investors, there were also many credible ones and even he was contemplating buying a large area of land to divide into plots.

“Most plot land buyers are those with an average or low income who will buy the land then save money to build their house within the next five to 10 years,” he added.

A land buyer named Chanthoeun, who purchased a plot of land from a company in the Areyksat village for $11,000 said she didn’t purchase the land to make a profit, instead admitting it was an investment for her children’s future.

“I have chosen the non-interest three year plan, which I need to pay $200 per month to the company for whom I know as well,” said Chanthoeun, adding, “anyhow, there is still a risk as we don’t receive the land title yet until we pay off everything first.”

Chanthoeun said the location where she purchased the land is earmarked for future infrastructure development, acknowledging the seller had assured her that there would be strong infrastructure around her newly purchased land. Though, she admitted she was skeptical as to whether or not the infrastructure plans would come to fruition.

A real estate expert, who asked to remain anonymous, said plot lands could create unnecessary headaches for a few reasons, with landlords often refusing to transfer the hard titles to the new buyers.

Nget Piseth, assistant to the CEO of Borey Piphup Thmey, said plot land buying and purchasing activity had been increasing of late but added that, a lot of the time, plotted lands lack nearby infrastructure and development because “each land owner waits for the other land owner to make the first move.”

For instance, Piseth said the land plots sitting at the South of Borey Piphub Thmey Samrong along Hanoi Street were predominately inactive due to the lack of surrounding development.

MLMUPC spokesman Seng Lot said activity concerning plotted land must adhere to the urban planning sub-decree number 42.

“The important thing is the investors adhere to the law of the ministry. However, the ministry doens’t interfere with plotted land activity by private investors,” Lot added.