Reservation Agreement and Booking Deposit Before Signing an SPA in Cambodia

Prepared by the NovAsia Editorial Team

An apartment purchase in Cambodia often begins not with a detailed sale and purchase agreement, but with a short reservation form and an initial payment. The buyer selects a unit, receives a promise that it will be taken off the market temporarily and transfers money on the assumption that the substantive legal terms will follow.

This stage is more serious than it appears. A one-page document may already bind the buyer to purchase, allow the seller to retain every amount paid after almost any withdrawal and give the developer broad power to change the later SPA. The buyer may not yet have seen the complete title documents, foreign ownership quota evidence, mortgage position or final contract, but the funds are already under the control of another party.

A safer reservation limits the buyer's exposure until due diligence and the SPA are complete. It should not turn incomplete information into an unconditional obligation.

The title of the document does not determine its legal effect

Different forms are used in the market:

• reservation agreement;
• booking form;
• expression of interest;
• offer to purchase;
• preliminary agreement;
• unit selection form.

Participants may use these terms loosely. The legal effect depends on the rights and obligations actually agreed.

The Cambodian Civil Code defines a sale as a contract under which the seller undertakes to transfer ownership or another proprietary right and the buyer undertakes to pay the price. A contract may generally arise from agreement unless a particular form is required by law or chosen by the parties.

A short reservation form can therefore be:

• a temporary hold only;
• a unilateral promise;
• an agreement to negotiate;
• a conditional sale;
• a completed sale contract;
• or evidence of earnest money or another payment arrangement.

Do not assume that a document is non-binding merely because “reservation” appears at the top. If it identifies the exact unit and final price, contains a payment schedule, obliges the buyer to sign the SPA and forfeits the payment on withdrawal, its consequences may be substantial.

Conversely, a clause stating that no sale arises until both parties sign an agreed SPA can support the conclusion that the transaction is incomplete. The rest of the document must be consistent. A reservation cannot sensibly say both that the buyer is unconditionally bound and that there is no obligation until a later contract.

Before signing, the buyer's lawyer should answer:

1. What rights and obligations arise immediately?
2. What arises only after the SPA and any required registration?

Booking fee, deposit, earnest money and advance payment are not interchangeable

One transfer may be described as a booking fee, deposit, earnest money, down payment or advance. The label influences expectations, but the text and circumstances determine the actual legal treatment.

Article 518 of the Cambodian Civil Code contains a specific rule concerning earnest money in a sale: the buyer may terminate by abandoning the earnest money and the seller may terminate by returning twice the amount, subject to the effect of performance having begun. It is unsafe to apply that rule automatically to every bank transfer labelled “booking”.

The reservation agreement should state:

• the legal and commercial purpose of the amount;
• whether it is credited towards the purchase price;
• whether it is paid only to hold the unit;
• whether it is held as a refundable amount during checks;
• which events trigger a refund;
• which events permit retention;
• when it becomes part of the first instalment;
• who controls the money before the SPA;
• what happens if the SPA is not agreed.

A clause stating that the payment is “non-refundable in all circumstances” exposes the buyer even where:

• the seller cannot prove title;
• the seller lacks authority;
• foreign registration is unavailable;
• the price or unit changes;
• the seller does not provide the SPA;
• a mortgage cannot be released;
• or the unit has been promised elsewhere.

A more balanced structure distinguishes among:

• the buyer changing their mind after satisfactory checks;
• the seller failing to provide documents;
• title or authority not being confirmed;
• foreign ownership being unavailable;
• the SPA materially departing from the reservation terms;
• a mortgage or encumbrance not being discharged;
• the unit being sold to another buyer;
• key terms remaining unresolved by the long-stop date;
• an agreed financing or other condition failing.

Each event should have a stated consequence.

Identify the exact apartment

“One-bedroom apartment in Project X” is not enough. A developer may later offer another floor, orientation or area and claim to have complied.

The reservation should identify, where available:

• project and legal development entity;
• building or tower;
• unit number;
• legally classified floor;
• plan;
• gross and internal area;
• balcony;
• parking or storage;
• orientation and view where material;
• furniture package;
• title status;
• private-unit designation;
• price;
• currency;
• included and excluded taxes and charges.

Where the final unit number has not been issued, attach a signed plan linked to an approved drawing or unique provisional designation.

Marketing floor numbers may differ from legal classification. Cambodian foreign ownership rules permit qualifying foreigners to own private units from the first floor above ground level, not on the ground or underground floors. “Level 1” on a brochure should not be accepted without checking the approved or cadastral classification.

For a resale unit, include the ownership certificate number or obtain the certificate before paying. If no individual title exists, the agreement must explain what right the seller currently holds and what must happen before the SPA.

Parking, storage and furniture should not be left to sales messages. If they affect the price, they belong in the signed description.

Check the seller before the first payment

“Reserve first and we will provide the company documents later” reverses the safer sequence.

Before transferring funds, establish:

• the legal seller;
• whether the seller matches the title holder or project entity;
• who is signing;
• the signer's authority;
• whether the agent may receive money;
• the owner of the bank account;
• whether the seller can transfer the selected unit;
• whether the unit is already reserved or sold;
• whether a mortgage or third-party right exists;
• whether the intended foreign ownership route is available;
• whether any court or administrative restriction is known.

For a developer sale, check:

• company registration;
• project legal entity;
• link between brand name and seller;
• rights over the land and building;
• construction and title status;
• authority of the signatory;
• official payment account.

For a resale, identify the registered owner. Where a relative, manager or agent signs, obtain a power of attorney or other documented authority.

Cambodian law may provide remedies where the seller does not hold the promised right or it is encumbered. Recovering money through a dispute is still inferior to checking the issue before payment.

Pay only a verified recipient

Payment details often arrive through a messaging application. The account may belong to an employee, marketing company or intermediary while another entity is named as seller.

Before payment, obtain:

• signed reservation agreement;
• invoice or official payment request;
• recipient name;
• bank;
• account number;
• currency;
• payment reference;
• authority to receive funds;
• confirmation that payment discharges the buyer's obligation to the seller;
• deadline for the receipt.

If an agent receives the funds, the agreement should state that payment to the named agent is treated as payment to the seller and that the seller bears the risk of onward transmission. Otherwise, the seller may later say that the agent failed to remit the money and that the reservation never became effective.

A cash receipt should identify:

• amount in figures and words;
• currency;
• date;
• unit;
• payer;
• recipient;
• legal entity;
• purpose;
• signature;
• company stamp where used.

Payment in a digital asset or through a third party adds further questions: conversion rate, time of receipt, wallet owner, refund currency and network fees. Where the purchase price is stated in US dollars, the refund should not be exposed to arbitrary crypto-price movements.

Verify any last-minute change of bank account through an independent channel. Fraudsters can compromise email or messaging accounts and substitute payment details.

Keep the bank's official transfer record, not only a screenshot.

Make due diligence an express condition

Cambodian contract law permits rights and obligations to depend on conditions. In a reservation, the buyer's duty to proceed should not become unconditional until agreed checks are satisfied.

Possible buyer conditions include:

• satisfactory confirmation of title;
• seller authority;
• eligibility for foreign ownership;
• confirmation that the area-based foreign quota permits the proposed transfer where relevant;
• absence or agreed discharge of mortgage and attachment;
• an acceptable SPA;
• construction, completion and title documents for a development sale;
• absence of condominium arrears;
• financing approval where essential;
• technical inspection of a resale unit;
• review of any tenant and tenant deposit;
• agreed allocation of taxes and costs.

Conditions should be testable. “At the buyer's sole discretion” offers flexibility but may create an argument about good faith. A clearer condition might say:

By [date], the buyer's Cambodian lawyer must confirm the seller's title, authority and absence of undisclosed registered encumbrances.

The reservation should also state:

• who performs the review;
• what documents the seller must supply;
• deadline;
• consequences of missing documents;
• extension procedure;
• notice method;
• refund deadline;
• treatment of banking costs;
• effect of partial satisfaction.

The seller should not benefit from failing to provide information required for a condition. It is better to state that directly than to rely on a later legal argument.

Due diligence should begin before the payment becomes non-refundable, not after.

Obtain the SPA or a binding term sheet early

The safest approach is to receive the draft SPA before signing the reservation. Where that is impossible, the reservation should lock in the essential terms that the later contract cannot materially worsen.

Record:

• final price;
• payment schedule;
• completion or handover date;
• type of ownership certificate;
• registration process;
• consequences of delay;
• defect warranty;
• condominium charge;
• taxes and transaction costs;
• breach and termination rights;
• refund procedure;
• governing language;
• dispute mechanism;
• assignment;
• furniture and parking;
• limits on developer changes.

A dangerous clause says:

The buyer agrees to sign the seller's standard SPA.

If the standard SPA has not been supplied, the buyer is agreeing to an unknown contract.

The reservation can require the SPA to be materially consistent with an attached term sheet and prohibit new material obligations without the buyer's written consent. If the later draft adds an undisclosed fee, broad waiver or unilateral time extension, the buyer should have a right to reject it.

Consumer-protection and unfair-contract rules may affect standard-form transactions, but they do not make every harsh term disappear automatically. Broad forfeiture and one-sided variation rights should be reviewed before payment.

Use a clear timetable and long-stop date

Without deadlines, the reservation may remain open indefinitely. The seller waits for another payment, the buyer waits for the SPA and the first amount remains beyond the buyer's control.

The document should state:

• reservation start date;
• deadline for seller documents;
• due diligence period;
• SPA review period;
• SPA signing date;
• next payment date;
• long-stop date;
• refund deadline.

The long-stop date is the final point at which the buyer may terminate and request a refund if the seller-side conditions remain incomplete through no fault of the buyer.

The right to a refund should not depend solely on the seller signing a separate acknowledgement. It can arise automatically after the long-stop date and valid notice.

Any extension should be written in the agreed form. An informal message asking for “two more days” can be useful operationally but should not silently change a contractual deadline.

A seller should not be able to make the reservation non-refundable merely by delivering an incomplete SPA on the last day.

Define what happens if the buyer changes their mind

A fair document can still allocate commercial risk to a buyer who simply withdraws after successful checks.

Possible structures include:

1. full refund during a defined cooling-off or due diligence period;
2. partial refund;
3. properly drafted earnest money;
4. fixed cancellation charge;
5. non-refundability only after all buyer conditions are satisfied;
6. automatic credit of the amount towards the first instalment.

The transition point matters. “Non-refundable immediately on reservation” is often too early. A more balanced structure links non-refundability to delivery of documents, expiry of due diligence and receipt of an acceptable SPA.

Where the parties intend Article 518 earnest-money consequences, the wording should be deliberate and reviewed by a Cambodian lawyer. Whether the other party has begun performance may affect the right to withdraw.

If financing is essential, make approval a condition. Otherwise, a bank's refusal may remain the buyer's personal risk.

Illness, visa problems or exchange-rate movement do not automatically create refund rights unless the agreement says so.

Define seller default and material changes

Seller default is broader than an explicit refusal to sell. It can include:

• unit sold to another buyer;
• price increase;
• changed area, floor or orientation;
• removal of parking or furniture;
• materially worse SPA;
• inability to transfer title;
• unavailable foreign ownership route;
• unexplained replacement of seller;
• missed deadlines;
• delayed refund.

The reservation should state:

• full refund;
• any agreed additional compensation or double payment where lawfully structured;
• payment deadline;
• consequence of late refund;
• prohibition on substituting another unit without consent;
• buyer's right to reject an alternative;
• treatment of agreed and evidenced costs where negotiated.

A different unit is not an automatic cure. Floor, view, layout and legal status may materially change value.

A seller should not condition return of the undisputed booking amount on the buyer signing a broad waiver of all other rights without independent review.

Assignment of the reservation

Some investors expect to transfer the reservation before the SPA. The ability to assign depends on the document, the nature of the right and the seller's consent.

The agreement should state:

• whether assignment is allowed;
• whether developer consent is required;
• any fee;
• identity and compliance review of the new buyer;
• effect on foreign ownership quota;
• deadline;
• whether the original buyer remains liable;
• treatment of the booking payment;
• whether the price may change;
• agency commission.

Silence does not create a free resale market in reservation rights. A developer may prohibit transfer until a specified payment or registration stage.

If assignment is central to the investment plan, confirm it before the first transfer of funds.

Apply stricter controls to a remote reservation

Distance increases the risk of impersonation and payment fraud.

Before signing remotely:

• use the seller's official domain and contact details;
• verify the signatory by video;
• obtain corporate records;
• verify bank details independently;
• match the recipient to the contract;
• use a clear electronic-signature method;
• preserve the final signed file;
• check every attachment;
• define time zone and notice procedure;
• appoint a local lawyer or representative;
• confirm any changed account through a second channel.

A power of attorney should be narrow. It may authorise signing the reservation, collecting documents and making a defined payment without granting broad power over the buyer's assets.

Where Khmer and English versions exist, the agreement should identify the prevailing version. A translation difference in “refund”, “termination”, “forfeiture” or “deposit” can change the outcome.

Every page and attachment should belong to the same final version. Do not sign an editable file with blank fields.

A pre-payment checklist

Before transferring the booking amount, the buyer should be able to answer:

Minimum documents before payment should include:

• draft reservation;
• unit plan;
• seller details;
• signatory authority;
• preliminary title or project documents;
• SPA draft or term sheet;
• official payment instructions;
• refund clause;
• timetable;
• buyer document requirements.

A small payment can create false comfort. The loss is not limited to the amount itself. The signed form may trigger larger instalments or contain waivers and automatic obligations.

What should happen after payment

The buyer should receive:

• document signed by both sides;
• official receipt;
• confirmation that the unit has been removed from sale for the stated period;
• due diligence pack;
• SPA draft;
• responsible contact;
• timetable.

The SPA must show the reservation amount as already paid and credited towards the purchase price. Check that the seller remains the same entity or that any change is fully documented.

If due diligence succeeds, the reservation should be superseded, incorporated or terminated according to its own terms.

If a condition fails, the buyer should send notice referring to the specific unsatisfied condition and provide verified refund account details. Keep evidence of delivery.

The refund statement should show:

• original amount;
• any contractually permitted fee;
• bank charges;
• net amount;
• date paid.

A seller should not invent an administration fee that was absent from the signed reservation.

The reservation is a controlled gateway

A well-drafted reservation does three things:

1. identifies the specific unit and principal commercial terms;
2. protects it from another sale for a limited period;
3. preserves the buyer's exit if the legal and contractual foundations are not confirmed.

The rest belongs in full due diligence and the SPA.

The common mistake is to treat the first payment as the price of access to documents. In a safer transaction, documents justify the payment. The payment should not be required merely to discover the seller's identity, authority and ownership status.

A buyer may knowingly accept a limited commercial risk in exchange for taking a desirable unit off the market. That risk should be defined in money and kept separate from title risk, quota risk and the risk of an unknown SPA.

This material is for general information and does not replace legal, tax or financial advice. The legal effect of a reservation, earnest money and refund rights depends on the exact document, parties, unit status and sequence of performance.

Sources

1. Kingdom of Cambodia — Civil Code, Articles 325–328, 340–348 and 515–518, covering contractual conditions, formation of contract, defects in intention, sale, unilateral promise and earnest money. English translation supported by JICA. Accessed 19 July 2026.
2. Kingdom of Cambodia — Law on Providing Foreigners with Ownership Rights in Private Units of Co-Owned Buildings, Articles 5–11, covering eligible private units, registration and consequences of non-compliant transfers. Accessed 24 July 2026.
3. Royal Government of Cambodia — Sub-Decree No. 82 on the proportion and calculation of private-unit area that may be owned by foreigners in co-owned buildings. Accessed 19 July 2026.
4. Ministry of Commerce of Cambodia — Prakas No. 0067 on unfair contract terms and official consumer-protection materials relating to standard-form agreements. Accessed 19 July 2026.

Frequently asked

Is a reservation agreement already a sale and purchase agreement?

It can be. The legal effect depends on the substance rather than the title. If the parties have agreed the specific apartment, price and obligation to complete the sale, a short document may have more serious consequences than a simple temporary hold.

Is a booking deposit always non-refundable?

No. Refundability depends on the document, the legal character of the payment, completion of the agreed checks and which party withdraws from or breaches the transaction.

Can the payment be transferred to an agent?

Only after checking the agent's written authority, the recipient, the stated purpose and the mechanism by which payment to the agent is treated as payment to the seller or developer.

What should happen if the SPA is not supplied on time?

The reservation agreement should set a deadline, give the buyer a right to withdraw, define the refund procedure and deadline, and prevent the seller from retaining the payment because of its own delay.