Before you launch yourself on to the property ladder, make sure you are taking all the right factors into account advises George Coucounis
A careful look at developments in the real estate market in Cyprus through professional practice and study reveals that people ought to be extremely cautious. The returns of investments in this sector continue to decrease and potential purchasers ought to exercise caution in buying immovable property, taking into consideration their real needs and the different perspectives in each case. Buying real estate property ought not to be an end in itself; on the contrary, purchasers should conduct the necessary market research and collect information relating to the subject so that they are able to judge the choices available to them objectively and knowledgeably. A careful investment in real estate, regardless of price, ought to ensure potential and profitability to the purchaser, who will then be able to take satisfaction in the investment he/she has made. On the other hand, a misjudged investment minimises the possibility of investment and profit expectation.
The factors that ought to be considered include type of immovable property (residence, apartment, field, etc), location, shape and area of the property, the land developer involved and their credibility, the quality of the construction offered and the materials used, whether a technical consultant was employed to check and oversee construction work, the mediation of an approved real estate agent instead of a salesman, whether the services of a legal consultant are offered, the offer price of the immovable property and whether that price is verified by an approved property valuer, whether services and facilities are comprised in the property, whether the property is mortgaged or carries any other property charges, whether a certificate of registration for the property has been issued, the presence of any other restrictions or impediments, as well as many other factors that could arise in each individual case and situation.
Potential problems that could arise for the purchaser of immovable property are the lack of a separate certificate of registration (Title Deed), the failure to deposit the sale contract with the District Lands Office for the purpose of the specific performance of the agreement in the case that the vendor refuses or neglects to transfer the property, the presence of a mortgage or other impediments, the presence of planning and local restrictions that may affect the property, the presence of taxes due on behalf of the vendor and any difficulty thereof in meeting these obligations while purchase price has already been paid, faulty construction, the possibility that the vendor has been declared bankrupt, failure or delay in completing the work undertaken in compliance with the terms of the contract, encroachment with further work and materials, illegal trespass to neighbouring immovable property, breech of law in the execution of the construction, lack of access to a public road, the presence of a tenant, especially a statutory one, as well as various other problems that can be located through the research and accumulated knowledge of consultants specialising in real estate.
Problems such as the ones mentioned are mainly faced by foreign investors, who are unaware of the realities and peculiarities of the real estate market in Cyprus and invest in real estate without first conducting the necessary market research. They fail to seek the advice of consultants to ensure and ascertain their choice and to protect their rights, instead putting their trust in people whose only interest and motivation is profit.
It often turns out in the end that the purchase made does not meet their expectations or the promises made by the vendor when negotiating. Eventually problems may start to arise and then these investors are obliged to seek the advice of experts in order to facilitate themselves and repair or minimise damage, thereby inducing harassment, effort and costs that could have been prevented had the right guidance been sought from the start.
Perhaps they are also inclined to grumble and complain, albeit quite unjustifiably, since they themselves are the first ones to blame for putting their trust and investing without first seeking the guidance of a specialised real estate consultant.
Problems are also faced by Cypriot investors who act in the same off-hand manner, especially those who put their trust too easily in other people and neglect to seek advice in order to save money. Once again problems do often appear and then one comes across typical comments such as “If only I had known”, “I trusted him”, “He was my friend/relative”, “He gave me so many promises” and “He has deceived me”. This results in lawsuits and court procedures that tend to be lengthy and costly so that eventually the “smart investment” turns out to be a detrimental investment. This could also result in the need for plans and investments already made to be changed.
As this is the era of the specialisation of knowledge and the development of various branches and sectors on one hand and the rise in people’s desire for easy profit on the other hand, one ought to be suspicious and cautious in each step or action taken so that advice is sought and given by people who work and specialise in the area of concern and are qualified in their field.
In this way potential investors will be able to make the best possible decision regarding their intended investment: an informed one. Certainly, it is highly preferable to prevent and avert accidents when these have to do with our financial activities, be they savings or loans. Investing in real estate with caution is therefore the rule to go by.
George Coucounis is an Advocate practising in Larnaca.
Many fail to seek the advice of consultants to ensure and ascertain their choice and to protect their rights.
Copyright © Cyprus Mail February 27, 2005