Buying Real Estate in Cyprus? Ten things to look out for.

The process of acquiring property anywhere in the World is both stressful and daunting one.

Here are 10 things you need to look out for before even considering parting with any money.  The list is of course a set of pointers and professional advice from experienced property lawyers should always be sought as there are always strange issues which may come up and need to be closely looked at.

1. ON-SITE INSPECTION: It is important to carry out an on-site inspection of the property and make a note of any issues which you might notice.  Take a surveyor, engineer or an architect with you.  Do not rely on or expect what you know from your home country also applies here.  Remember, especially for used properties, it is up to the buyer to ask questions and find out everything about the property before committing to buy it. There may be little you can do about problems once the property is bought.

2. SEARCHES: A full search on the property at the Land Registry of the area where the property is located needs to be carried out. This will reveal, amongst others, whether the seller is in fact the legal registered owner of the property and whether the property is free of any charges, mortgages or other third-party rights. In Cyprus, regardless of who the seller is, the land on which buildings are erected is often mortgaged.  Where you are buying a house or apartments Land on which multiple houses or blocks are being built you need to provide for a release from this obligation to avoid any future problems.

3. RESEARCH SELLER: If the seller of the property is a Developer who sells properties, do some market research and find out about the reputation, trustworthiness and creditworthiness of the company. A reputable developer with a good financial record can avoid unnecessary headaches going forward.

4. VALUATION: A valuation of the property by surveyors will be required if you are borrowing on this property to buy it.  A valuation for a reputable valuer is always a good idea especially when buying in less popular areas or properties that are somewhat different from those generally available either in value or type.

5. VAT: ascertain whether VAT is payable on purchase price of the property you are buying. This can affect the purchase price dramatically. Consider not proceeding with the payment of the sale price until an application has been filed and approved for the reduced VAT at 5% if this is the first residential property being acquired by the particular buyer.

6. COSTS: be aware of any commissions, transfer fees, stamp duty, taxes, legal fees and disbursements which can all add up to a considerable amount. Enquire whether there are any management service agreements which are mandatory to be entered into as the monthly/annual price payable under such agreements.  It is sensible for these to be taken into consideration when determining the total cost of the purchase.

7. SALE CONTRACT DEPOSIT: Once the sale contract is signed, it must immediately be deposited with the Land Registry.  This is important for the protection of the purchaser and to secure the right to specific performance.

8. TIMING: Ensure you are not parting with all of your money before you have possession of the property. The bulk of the sale price will only be paid upon transfer of the property in the name of the purchaser and delivery of possession to the property.

9. RESERVE: Since the reality in Cyprus at present is that issuance of the title deeds in the name of the purchaser can be considerably delayed, it is important to keep an amount of the sale price to be paid once the title deeds are issued.

10.  LAST BUT NOT LEAST, do not proceed to purchase any property before locating the right legal representatives for you who you trust and who will guide you through the process and ensure your rights are protected throughout. Always engage experienced property lawyers to supervise the process to ensure you are acquiring good title to the property you plan to purchase.

The current article is for informational purposes only and does not constitute legal advice.

For specialised legal advice please contact Samantha Hellicar at samantha@messios.com. or call us at 22460446.

Samantha Hellicar

C.D. MESSIOS LLC