Whether you’re a property owner aiming to lease your property or someone seeking a rental for living or working in Cambodia, understanding local regulations and common practices is crucial. A rental agreement is a legally binding contract that protects the interests of both tenants and landlords by outlining the terms and conditions of the tenancy.
What is a Rental Agreement?
A rental agreement is a legally binding contract between a tenant (the individual using the property) and a landlord (the property’s owner or representative). It defines the rights, responsibilities, and obligations of both parties throughout the rental period.
Why Are Rental Agreements Important?
Rental agreements establish clear expectations and prevent misunderstandings between landlords and tenants. They define crucial terms such as rental price, security deposit, maintenance responsibilities, and contract duration, ensuring a smooth rental experience for both parties.
Types of Rental Agreements in Cambodia
In Cambodia, different types of rental agreements cater to various needs. Here are the most common ones:
1. Lease Agreement
A lease agreement is a long-term contract, usually lasting one year or more. It provides tenants with stability and security, while landlords benefit from consistent rental income. These agreements often include clauses detailing:
Maintenance responsibilities
Renewal options
Conditions for termination
Security deposit policies
2. License Agreement
A license agreement is typically used for short-term rentals or flexible tenancy arrangements. Unlike a lease, it grants a tenant permission to use the property without transferring exclusive possession. This agreement is common for:
Short-term stays
Co-living spaces
Shared office spaces
3. Commercial Lease
A commercial lease is designed for businesses renting office spaces, retail shops, or warehouses. These agreements often contain specific clauses, including:
Permissible business activities
Modification rights (e.g., renovations and branding)
Compliance with local business regulations
Responsibility for property taxes and utilities
Key Considerations When Signing a Rental Agreement
Before entering into a rental agreement, consider the following factors:
1. Legal Requirements
While Cambodia does not have extensive rental laws, some key regulations apply to rental agreements:
Security deposits are typically equivalent to one or two months’ rent.
Lease registration may be required for long-term agreements.
Both parties should agree on contract termination terms in advance.
2. Payment Terms & Rent Increases
Clearly define the rental amount, payment schedule, and acceptable payment methods.
Specify if and when rent increases are allowed during the contract term.
3. Maintenance & Repairs
Outline which party is responsible for repairs and maintenance.
Determine how issues like plumbing, electricity, and structural damages will be handled.
4. Security Deposit & Refund Terms
Clarify the conditions for deducting from the security deposit.
Specify the timeline for deposit refunds after the lease ends.
5. Taxes & Fees
Understand tax obligations for rental properties. In Cambodia, rental income is subject to tax, and landlords may be required to pay rental tax to the General Department of Taxation (GDT).
Ensure clarity on who is responsible for property taxes and service fees within the lease agreement.
Find out more about Taxes on Rental Properties in Cambodia !
6. Termination & Renewal Clauses
Detail notice periods required for terminating the agreement.
Include renewal terms and conditions for contract extensions.
Common Rental Practices in Cambodia
In Cambodia, rental negotiations are common. Tenants and landlords often discuss rental prices, contract duration, and included amenities before finalizing an agreement. Additionally, it’s customary for landlords to provide a fully furnished property, especially in urban areas like Phnom Penh and Siem Reap.
Final Tips for Tenants and Landlords
Always read the agreement carefully before signing.
Ensure all verbal agreements are documented in writing.
Seek professional advice if unsure about specific contract terms.
Need Help Navigating Rental Agreements?
Understanding rental agreements can be complex, but IPS Cambodia is here to help. Whether you’re renting or leasing a property, our experts can guide you through the process. Contact us today to ensure a hassle-free rental experience.
For more insights, check out these related articles:
Fix It or Forget It: Who’s in Charge of Repairs in Your Lease?
What Are The Paperworks Involved in Leasing Out Condo & Apartment in Cambodia?
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