By Alex Georgiades, Associate Lawyer at Dionysiou & Partners LLC
There have been a number of property disputes in Cyprus over the years. Most of them involve properties that owners have yet to receive title deeds over many years, but also cases of deficient properties sold to foreign (as well as local) buyers and even cases of developers selling the same property twice to different unsuspecting buyers.
While the above is very off putting to any potential property buyer, it should be noted that should a potential property buyer do his due diligence then it is highly unlikely that he will fall into the above category.
We should note a number of potential pitfalls that can befall a property buyer in Cyprus, which are not unique to Cyprus though. These are outlined as follows:
- Buying a property that is under dispute. A typical example is a property disputed through divorce proceedings, or in more rare cases properties that have been sold to more than one buyer concurrently.
- Failure to deposit the property sales contract to the land registry in due time. In this case the buyer ends up forgoing rights beholden to him under law.
- Failure to consider VAT costs. Some properties in Cyprus are saddled with 0% VAT while others have 5% Vat and others still are saddled with 19% Vat. It should be noted that Vat is paid by the buyer and can inflate the property price significantly.
- Handing over a reservation fee without having the agreed upon terms noted in writing. In cases such as this, a buyer could end up being at the mercy of the seller with regards to important aspects, such as the transfer of the property, completion of the contract and other important issues.
- Properties that have been mortgaged by the developer usually for funding towards other projects, yet sold to unsuspecting buyers as clean title properties. Unfortunately, this scenario has happened numerous times in the past, and while people that have paid for their properties have not yet lost their acquired properties, buyers should have their lawyers do the required due diligence in order to avoid this nightmarish scenario.
The above issues can cause severe problems for any property buyer. Overall it should be noted that any potential property purchase will need appropriate due diligence and have all necessary terms and conditions properly spelled out in a binding contract.
While the above is not meant to dissuade anyone from buying a property in Cyprus, it should be noted that the above pitfalls can be avoided with the use of independent legal advice, and hence using lawyers that are not recommended and hence not connected to the property sellers.
For more information, please contact S. Dionysiou & Partners LLC (tel: +357 22272360/ email: firstname.lastname@example.org), and we will be pleased to offer our assistance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.