Buying in Cyprus

DID YOU KNOW? When buying property in Cyprus, the legal system exists and is designed to protect the buyer, but only if the buyer takes advantage of this legal framework. This means that any buyer should not rely on the Seller’s legal advisors, but should seek independent legal advice, well in advance of any contract being signed.

1. Why should you seek Independent advice when buying a property in Cyprus?
   1. A lawyer will be able to advise, with the help of a land valuer, on the market price of the property.
   2. The lawyer can run the necessary checks at the Cyprus Land Registry to make certain that the property is free from any mortgage (e.g. a bank has no lien on the property) or other incumbrance, i.e. rights of way, court decisions against the land etc.
   3. Your lawyer will be able to negotiate on your behalf a contract and the terms of sale.  Quite naturally, many of the contracts that land developers use, are drafted by their own legal advisors and maybe heavily one sided in their favour.  Having an independent legal advisor acting on your behalf, makes certain that the contract will be evenly balanced and that the seller has obligations as well rewards.
   4. After the contract is signed, your lawyer will be able to advise you of the exact procedure necessary in order to file or deposit the contract of sale with the Land Registry.  This is an important safeguard provided by the law, which in essence informs the Land Registry that the buyer has a right to the property and therefore any subsequent third party rights cannot be registered against the property.  For example, if the seller decides to sell the property again to an unsuspecting third party, a cursory check at the Land Registry will disclose your prior right.  Moreover, if the third party claims the property, your prior registered right entitles you to the property.
2. How long does it take for the sale of a property to complete?
   Cyprus has a very good system of land registration, which enables a Buyer to complete the sale of a property with a title deed, within one day.  However, this only applies to completed houses which already have a title deed.  As is often the case, many houses are being sold on plans or in the early stages of building.  The way the legal framework is in Cyprus and the many complications that can arise involving a number of government departments, means that these properties may take a number of months before a title deed can be issued for them.  An independent land specialist or your lawyer will be able to communicate personally with the government departments and be able to give you a clear picture of where you stand and the length of time the procedure will take.
3. What are the general steps you should be aware of when buying a property?
   1. Obtain from the Seller a copy of the title deed with a plan of the area if possible and the price for which he is selling the land.
   2. Employ a land specialist or a lawyer specialising in land, and seek his advice regarding the proposed sale. He will need the documents in no. 1. (If you cannot obtain the title deed and plan, your lawyer/specialist will be able to obtain them directly from the Land Registry.)
   3. Ask your lawyer/specialist to undertake a valuation and due diligence of the property.
   4. If everything is in order, enter into negotiations with the Seller.
   5. Review the contract of sale with your lawyer or ask him to draft the contract, if necessary.
   6. Sign the contract. If the property is completed move into it according to what was agreed in the contract
   7. Follow the procedure for depositing the contract at the Land Registry, as directed by your lawyer/specialist.
   8. If the property has a title deed, arrange a convenient date for yourself and the Seller to attend the Land Registry for the transfer of title. (This can be done by your lawyer on your behalf, by giving him a power of attorney.) If there is no title deed to be transferred, follow the guideline of the contract (this is a waiting period and depends largely on the individual case, which your lawyer will be able to advise you on.)
4. What are the essential clauses to have in every contract, for the purchase of a property under development by the Seller?
   1. Time. It is essential to stipulate a strict time frame for the payment of installments which is linked to the progress of the work. i.e. no work, no payment. Also, a firm date has to be set for the completion of the project with a reasonable penalty clause for incompletion by that date.
   2. A minimum one year guarantee for the standard of the building work.
   3. Strict assurances or some money to be held back, until the actual delivery of the title deed and the transfer into the Buyer’s name (i.e. the change from the plot of land belonging to the Seller, to the property in the Buyer’s name.) The responsibility for obtaining the title deed, rests with the Seller.
   4. Tips of the trade: Always hire a local lawyer/land specialist to act on your behalf.  Also, if you are buying property from a development company, do some background checks to make sure that it is a sound and reputable company.  Remember, a reputable company will always encourage you to seek independent advice.
   5. Remember, it is always better to seek independent advice before signing contracts.