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Thursday 16th July 2020
Home Letters Is our home in Cyprus mortgaged?

Is our home in Cyprus mortgaged?

I WISH I’d read your excellent magazine before we bought our home in Cyprus as I think we may have made a couple of mistakes. We foolishly used our developer’s lawyer to check things out and draw up our contract of sale and I’m worried about a few things.

  • Can we find out whether the Cypriot developer has mortgaged on the land where our home is being built and if he has, is there anything we can do about it?
  • Our developer’s name is on our contract along with several other names. Do you know who these other people could be?
  • Can the developer or the other people mentioned in the contract mortgage the land on which our house is being built even though we have signed a contract?

I know you must get many questions, but I’d be very grateful if you could give me your advice.

Answer

The number one golden rule when buying property in Cyprus is to take independent legal advice and not to sign any papers or hand over any money until you have done so.

Unfortunately many people fall into the trap of using the so-called “free” legal services offered by the property developers or use a lawyer who has been introduced or recommended by the developer. Regrettably, it costs some buyers many times more to sort out the problems than if they had paid an independent lawyer to act on their behalf in the first place!

The British High Commission in Nicosia publishes a list of English-speaking lawyers who are able to offer advice, which it has graciously allowed me to put on my website along with a number of their other ‘must read’ documents from the High Commission. You can find them in the download area of my website.

To answer your specific questions:

  • It’s relatively straightforward to find out whether there is a mortgage on the land. The Land Registry can carry out a Title search and produce a report showing what the situation is. You’ll may need a lawyer to arrange this on your behalf if you are not in Cyprus – the N50 Land Registry Search Application Form is in Greek and it can take the Land Registry quite some time to complete the search. If you want to use a law firm, I suggest you instruct one of those listed by the British High Commission (see above). When you discuss the matter with the lawyer be sure to have your contract with you. This should contain the reference details of the site that will enable the Land Registry to carry out the search. If you want to do it yourself, take the completed N.50 form with you to the District Lands Office together with your passport and contract.
  • The other people whose names are on your contract are most probably the owners of the land. In Cyprus there is a system known as ‘Antiparoxi‘ which is an agreement between the land owner and the property developer. It enables the developer to build on the land without having to pay for it. But in exchange for the land, the developer will give the land owner one or more of the properties he’s building. (Your lawyer will be able to check this out with the Land Registry as part of the Title search).
  • Under certain circumstances it is possible for a developer to mortgage the land on which he is building even though he has sold properties on it. (I personally know of several cases in Paphos and Limassol where banks have granted mortgages to developers in this situation).

The Cyprus Government is well aware of the problems with some of the property developers here. Three years ago it promised to “arm property buyers with an arsenal of weapons against unscrupulous property developers“. But so far, it hasn’t lifted a finger to help!!

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