How to Check a Condominium Management Budget in Cambodia Before Buying

Prepared by the NovAsia Editorial Team

> Important. This material is for general educational purposes and is not legal, financial or technical advice. Any budgets and calculations are illustrative examples, not market averages; verify the management arrangements, cost allocation and each party's powers against the specific condominium's documents, with a qualified professional where needed.

Before buying a Cambodian condominium, it is not enough to ask for the monthly service charge. A low fee may mean efficient management, or it may mean the building cannot properly pay for security, lifts, pumps, generators, fire systems and future repairs. A serious buyer should review the building budget, real fee collection, owner arrears, reserve fund and major works plan for at least the next few years.

The key question is not what one unit pays this month. It is whether the whole building can pay its operating bills and save for expensive equipment replacement. If the budget depends on developer subsidies, assumes 100% collection or ignores unsold units, the fee may rise sharply after management is handed to owners.

This article is general information for buyers and owners. It is not legal, accounting, technical or financial advice. Management rules, voting powers, fee calculations and responsibilities must be checked in the building’s internal regulations, management contract and financial reports.

What a condominium budget should contain

A condominium budget should separate day-to-day operation from long-term capital costs. When everything is hidden in one line called "building maintenance", buyers cannot see what the money actually covers.

The operating budget commonly includes:

• administration and technical staff;
• security and cleaning;
• electricity for common areas;
• water for common use;
• lift maintenance;
• pumps, generator and ventilation;
• fire-safety systems;
• rubbish collection;
• pool and landscaping;
• small repairs;
• insurance;
• accounting and bank fees;
• management company fees.

A separate reserve fund is needed for infrequent but expensive work: lift equipment, facade repairs, roof waterproofing, major pumps, generator replacement, fire-safety upgrades and other systems with limited service lives.

A third category is special assessments. These are additional calls for money when the usual fee and reserve are not enough. For owners, this is the unpleasant scenario: the unit is already purchased, and the building suddenly asks for hundreds or thousands of dollars more.

Before buying, you need to see all three levels, not only the current fee.

The legal management framework

Cambodia’s Sub-Decree No. 126 on co-owned buildings establishes the basic principle that common areas belong to all co-owners and must be maintained and repaired collectively. Common expenses are generally allocated in proportion to the size of the private unit, unless the building’s internal rules set another valid method.

The developer must prepare internal rules for the co-owned building before selling or leasing units. These rules should describe rights and obligations of owners, expense shares, maintenance of common areas and decision-making.

For a building with at least five co-owners, a management body such as a council or executive committee is required. Owners at a general meeting determine its powers. Decisions on repairs, building maintenance and payment of common services require the required majority under the applicable rules.

These laws provide a framework. They do not guarantee that every building is transparent in practice. Buyers still need to check the internal regulations, management-company contract, approved budget and actual accounts.

Who manages the building?

After handover, the developer should not simply continue collecting money without a clear legal basis. Sub-Decree No. 50 requires the developer, after transferring a house or co-owned building to buyers, to obtain a real estate management licence or to contract a licensed property management company.

Prakas No. 064 regulates real estate service businesses, including paid property management companies. A management company must hold a specific licence, usually valid for one year and subject to renewal. Professional-liability insurance is also relevant.

Before buying, ask for:

• full legal name of the management company;
• copy of the current licence;
• licence expiry date;
• management agreement with the developer or owners’ body;
• list of services;
• management fee;
• professional liability insurance;
• disclosure of related-party links.

A related company is not automatically bad. A developer-affiliated manager may know the building well. But owners need to understand the terms and whether they can later replace it.

A paid manager without a current licence is a serious signal. Owners may be paying a structure whose authority, reporting and liability are not aligned with current regulation.

Documents to request before paying a deposit

For a completed building, ask for financial documents for at least the last 12 months. For a newly completed project without history, request the first-year operating budget and a clear explanation of which costs the developer is still subsidising.

Ask for:

1. Approved annual budget.
2. Actual income and expense report.
3. Amount billed versus amount collected.
4. Ageing summary of owner arrears, without unnecessary personal data.
5. Reserve-fund balance.
6. Major repair and replacement plan.
7. Contracts with key suppliers.
8. Staff list or contractor costs.
9. Building insurance policies.
10. Recent owners’ meeting minutes.
11. Internal condominium rules.
12. Procedure for approving fee changes and special assessments.

If the seller refuses on confidentiality grounds, request a redacted version. You do not need personal details of debtors, but you do need the total arrears, their age and the proportion of non-paying owners.

For off-plan or newly launched projects, check assumptions. How many units are expected to pay in the first year? Who pays for unsold units? How long does any advertised service-charge level remain valid?

The fee must be multiplied by the right area

Service charges are often quoted per square metre per month. But the area basis differs between projects. It may be net area, gross saleable area, title area or a figure in the building rules.

Suppose the rate is USD 1 per sq m per month and the apartment has:

• 40 sq m net area;
• 52 sq m gross saleable area.

The same rate produces different annual costs. A service-charge quote without the area basis does not tell you the owner’s real expense.

Also check whether parking, pool, gym, common-area internet or other services are included. Sometimes a low base rate is accompanied by separate mandatory charges.

Does the tariff actually cover the building?

A fee of USD 1 or USD 2 per square metre is not meaningful without the building’s systems. A tower with four lifts, pool, generator and 24-hour security costs more to operate than a small low-rise building with fewer services.

Start with potential income.

Example: a building has 18,000 sq m of fee-bearing area. The fee is USD 1.20 per sq m per month.

18,000 x USD 1.20 = USD 21,600 billed per month

That is the ideal billable amount if everyone pays. Real collection is usually lower.

At 85% collection:

USD 21,600 x 85% = USD 18,360 received

Assume monthly expenses are:

Total expenses are USD 19,000. At 85% collection, the building runs a deficit of USD 640 per month even though the headline tariff looks sufficient.

This is an illustrative model, not an average for Phnom Penh. It shows the method: reduce billings by real non-payment, then compare income with all costs.

Collection rate matters more than the quoted fee

Two similar buildings with the same fee can have very different finances. One collects 95% of fees. Another collects 65%.

Ask for three numbers:

• total amount billed during the year;
• total amount received;
• total arrears at year-end.

Collection rate:

amount received / amount billed x 100

If USD 240,000 was billed and USD 180,000 was collected:

USD 180,000 / USD 240,000 x 100 = 75%

The budget may then be sufficient only on paper. One quarter of income is missing, and the management may delay repairs, reduce staffing or ask the developer to cover the gap.

The age of arrears matters. A small one-month delay is different from debts accumulated over several years.

Who pays for unsold and empty units?

In a new project, many units may still be owned by the developer. The buyer should find out whether those units are charged and whether the developer actually pays.

An empty apartment still benefits from common systems. The building must be guarded, lit, cleaned and maintained regardless of occupancy. Lifts, pumps, fire systems and common-area utilities do not disappear because a unit is unsold.

A risky model looks like this:

• the tariff assumes all areas will pay;
• the developer does not pay for unsold units;
• early owners fund only part of the budget;
• the developer temporarily subsidises the deficit;
• once the subsidy ends, the tariff increases sharply.

Ask for the legal basis under which the developer pays or does not pay for its retained units. If the developer subsidises management, ask for the amount, term and conditions for ending the subsidy.

A temporary subsidy can be useful during start-up. It should not be treated as a permanent income stream.

Reserve fund: the part buyers often miss

A one-time reserve payment does not prove the building will have enough money. There should be a major-repairs plan with approximate timing and cost.

Example ten-year plan:

• lift major works in 8 years: USD 80,000;
• facade repairs in 10 years: USD 120,000;
• pumps and equipment in 5 years: USD 40,000.

Ignoring inflation and investment return, the building needs to save:

(80,000 + 120,000 + 40,000) / 10 = USD 24,000 per year

For 18,000 sq m of fee-bearing area:

USD 24,000 / 18,000 = USD 1.33 per sq m per year

Or about USD 0.11 per sq m per month.

The real plan will be more complex because costs happen in different years and may rise. But the model shows why a random reserve balance without a technical plan gives little comfort.

Ask:

• current reserve balance;
• whether it is separately banked or accounted for;
• who signs payments;
• what it has been used for;
• whether it can be used for ordinary operating bills;
• whether a capital-works plan exists;
• how extra assessments are approved.

If the reserve is regularly used to pay electricity and cleaning, the operating budget is already unbalanced.

Check the largest cost lines

Large cost lines should be supported by contracts and real bills.

For staff, check how many people work in the building, which functions are outsourced and whether costs are duplicated. A line for "management company" should not secretly duplicate a full in-house administration team unless explained.

For electricity, request common-area bills for several months. High consumption may be normal for pumps, pool systems and ventilation, but it should match the actual infrastructure.

For lifts, generator and pumps, ask for preventive-maintenance contracts. Saving money on servicing can lead to expensive failures later.

For insurance, confirm:

• what is insured;
• insured amount;
• exclusions;
• deductible;
• third-party liability;
• coverage for fire, water and equipment.

Also check the supplier term and related-party status. A long contract with a developer-affiliated contractor may limit owners’ ability to reduce costs after transfer of control.

Is the budget artificially low for sales?

During sales, low ownership costs make a project easier to market. Sometimes the initial fee is below economic cost and the developer temporarily covers the difference.

Signs of an understated budget include:

• fee unchanged for years despite cost increases;
• no reserve contribution;
• insurance omitted;
• symbolic lift-maintenance cost;
• staffing inconsistent with building size;
• utility costs based on assumptions rather than history;
• 100% collection assumed;
• developer subsidy with no term;
• no major-works plan;
• no actual financial report.

A low fee can help rentability only while building quality remains stable. Deferred maintenance can damage asset value more than the owner saves in monthly fees.

Ask directly: what would the tariff be without developer subsidy and with 85% collection rather than 100%?

Stress-test the building budget

A budget should be tested not only under the ideal scenario but also under stress.

Example:

Baseline:

• billed per month: USD 21,600;
• collection: 90%;
• received: USD 19,440;
• expenses: USD 18,500;
• surplus: USD 940.

Stress scenario:

• collection falls to 80%;
• utilities and contractors rise by 10%;
• expenses become USD 20,350;
• received income becomes USD 17,280;
• monthly deficit: USD 3,070.

Annual deficit:

USD 3,070 x 12 = USD 36,840

The building must then choose one or more options:

• increase fees;
• levy a special assessment;
• reduce services;
• use the reserve fund;
• rely on developer subsidy;
• postpone repairs.

This calculation is more useful than a promise that the fee is "fixed". Fixed fees do not freeze real costs. If the documents allow changes by owner decision or management-body procedure, increases remain possible.

What owners’ meeting minutes reveal

Financial reports show numbers. Meeting minutes show governance.

Look for discussion of:

• arrears;
• fee increases;
• special assessments;
• replacing the management company;
• lift repairs;
• leaks;
• insurance;
• reserve-fund use;
• disputes with the developer;
• quorum and voting;
• missing reports.

Repeated discussion of the same defect without action shows weak execution. If meetings have not been held for years in an occupied building, owners may have little practical control.

For a new project, ask when management will be handed to owners and how the owners’ council will be formed. "Later the owners will decide" is not a procedure.

Bank accounts and control of money

Owners should understand where building money is held and who can spend it.

A healthier structure includes:

• a separate operating bank account;
• separate accounting for reserves;
• more than one authorised signatory;
• monthly reconciliation;
• annual financial report;
• documents for large payments;
• procurement rules for major contracts.

Not every element will be prescribed identically for every building, but without them owners have little visibility.

If the reserve fund sits in the developer’s ordinary account, ask how it is legally and accounting-wise separated from the developer’s own money. If the developer later faces financial problems, this distinction matters.

How the budget affects rental yield

Owners receive net income, not the headline rent.

Example:

• rent: USD 700 per month;
• vacancy: one month per year;
• building fee: USD 60 per month;
• rental management: 8% of collected rent;
• minor repairs: USD 300 per year;
• insurance and other costs: USD 150 per year.

Annual rent after vacancy:

USD 700 x 11 = USD 7,700

Building fee:

USD 60 x 12 = USD 720

Rental management:

USD 7,700 x 8% = USD 616

Net before other owner-specific costs:

USD 7,700 - USD 720 - USD 616 - USD 300 - USD 150 = USD 5,914

If the building fee rises from USD 60 to USD 90, net income falls by another USD 360 per year. Small studios are especially sensitive because fixed building costs take a larger share of rent.

Red flags before purchase

Take extra care if:

• no budget is provided;
• only a marketing tariff is shown;
• collection-rate data is unavailable;
• the developer does not pay for unsold units;
• there is no reserve fund;
• reserve money is used for daily bills;
• no major-works plan exists;
• the management company lacks a current licence;
• meeting minutes are absent;
• the tariff cannot be linked to actual expenses;
• related-party contractors are not disclosed;
• special assessments are frequent;
• arrears are growing;
• insurance is missing;
• financial reports cannot be reconciled to bank data.

A verbal promise of a fixed fee for many years is also risky. If real costs rise, someone must pay the difference. The buyer needs to know who, for how long and on what legal basis.

Bottom line

A good condominium budget shows how much the building actually receives, where the money goes and how it prepares for major future work. A low monthly service charge without a reserve fund, transparent accounts and high collection is not necessarily an advantage.

Before buying, request the annual budget, actual expenses, arrears, reserve balance, supplier contracts, meeting minutes and management-company licence. For a new development, separately verify who pays for unsold units and how long any developer subsidy lasts.

Then stress-test the budget: reduce collection, increase costs and see whether a deficit appears. If the building works only under a perfect scenario, owners should expect higher fees, special assessments or weaker maintenance.

Sources

1. Royal Government of Cambodia — Sub-Decree No. 126 on the Management and Use of Co-Owned Buildings, 12 August 2009. Building rules, management bodies and allocation of common expenses.
2. Royal Government of Cambodia — Sub-Decree No. 50 on Real Estate Development Business Management, 2 March 2023. Requirements relating to management after transfer to buyers.
3. Real Estate and Pawnshop Regulator — Prakas No. 064 on Real Estate Service Business, 27 December 2022.
4. DFDL — Cambodia: New Prakas on Real Estate Business Service Licensing, 19 April 2023. Commentary on property management licences, liability insurance and regulator reporting.
5. EuroCham Cambodia — Charge Collection in Co-Owned Buildings, recommendation No. 55, White Book 2024. Last updated 2 June 2026.
6. EuroCham Cambodia — Board of Regulators in Co-Owned Properties, recommendation No. 56, White Book 2024. Last updated 2 June 2026.

Frequently asked

Can a low service charge be a good sign?

Yes, but only if actual income covers operations, insurance and reserves. A low fee without high collection, transparent accounts and a capital-repair plan often means future special assessments or weaker maintenance.

Who pays the service charge for unsold units in a new development?

Check the building rules, management agreement and developer obligations. If unsold units do not contribute, the first private owners may carry a larger share of the operating burden.

Can condominium management fees increase after purchase?

Yes. Fees can rise because of higher costs, budget deficits, owner decisions, weak collection or the end of a developer subsidy. The approval procedure should be clear in the building documents.