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Buying property in Cyprus – book review

For anyone wishing to avoid unnecessary heartache and financial loss when buying property in Cyprus, this book is an essential reference – Dr Alan Waring.

THE risks faced by property buyers, especially foreigners, in Cyprus are now legendary. The backlog of 130,000 properties still awaiting their Title Deeds (some for as long as 20 years or more) includes some 30,000 bought by foreigners.

In addition to the Title Deeds delays, a significant number of buyers also allege that they have been defrauded either by their developer and/or their lawyer. ‘Double selling’ fraud is the most frequent complaint.

Unfortunately, redress is proving most difficult to obtain as, uniquely for a country that claims to follow English law and precedents, the Attorney General has declared that property fraud in Cyprus is a civil rather than a criminal offence and does not warrant an automatic police investigation. Aggrieved buyers are therefore forced to take out long-winded civil actions or private prosecutions and judges are proving reluctant to find in favour of plaintiffs.

With such a minefield for buyers to contend with, the recently published ‘Buying Property in Cyprus – Golden Commandments‘ by Nigel Howarth is timely and on-target for overseas buyers thinking of buying a property in Cyprus. Nigel Howarth has lived in Cyprus for many years and runs the highly popular Cyprus Property Buyers and Cyprus Property News websites.

The 32-page book contains a wealth of well-structured advice and guidance based on his immense knowledge and experience. Topics covered include the intricacies of buying a new property, especially off plan, the potential tricks and traps and how to avoid them.

Other sections cover buying a re-sale property, buying as an investment and financing a purchase.

The section on Title Deeds is especially illuminating – and sobering – for the unwary. Nigel Howarth rightly points out that while successive Interior Ministers have promised much to correct the Title Deeds scandal, thus far little has emerged in practice.

The book is not (and does not claim to be) a complete answer to all questions and risks concerning buying property in Cyprus. For example, it does not mention the five Bills currently being examined by Parliament which the Interior Minister claims will correct the Title Deeds problem once and for all. This claim is, in any event, highly contentious and many believe that the Bills are ill-conceived and unworkable. The book also does not mention the fact that the Cyprus government does not appear to have implemented the EU Unfair Commercial Practices Directive in respect of immovable property and, at one stage, were denying that the Directive applied to immovable property.

All in all, the book is an essential reference for anyone wishing to avoid unnecessary heartache and financial loss as a buyer of property in Cyprus.

About the author

Dr Alan Waring is an international risk management consultant with extensive experience in Europe, Asia and the Middle East with industrial, commercial and governmental clients. He is a Fellow of the Institute of Risk Management and is a founding member of the IRM Cyprus Regional Group. Contact via Dr Alan Waring & Associates.

The e-book ‘Buying Property in Cyprus – Golden Commandments’ is available free of charge in our Publications section.

Readers' comments

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  • Odd_Job_Bob says:

    Richard, didn’t mean to seem to attack you – that was not my intention in the slightest and I apologise if that’s what you felt.

    But you have come up with some very good points with which I wholeheartedly agree.

    1) A big chunk of the world’s present problems stemmed from banks and their greed

    2) “you’ve a load of old buddies in the banks over there maybe who are ‘seeing you right’ behind the scenes”.

    Well, that’s just what banks and bankers do. I’m not proud, but a more self-serving fraternity you couldn’t possibly imagine. I have stories.. (maybe later).

    Even though you may hate us (or should I say “them” as I am no longer one), they are EXTREMELY practical and ruthless when it comes to turning a fast buck.

    Have you heard of “pound cost averaging”? It’s the theory that if you continue to drip feed money into an investment that’s constantly diminishing, when it eventually goes up sharply, you will have bought when prices are low and thus experience great overall gains.

    The problem with this theory is that it’s complete b#*llocks.

    We are not fighting against isolated instances or thick Cypriots who don’t realise that they are destroying their own economy. We are fighting against a (carefully?) orchestrated conspiracy by actually some rather clever people. Not all, just those at the top. After all, they duped us, didn’t they?

    Investing time and (more) money into a system that has done all it can to completely screw us for the sake of retaining a constantly diminishing asset may be regarded as courageous by some, honourable by others, fighting for what is right etc. To a banker, it’s futile.

    At some point, we have to realise that the battle CANNOT be won. He who fights and runs away…

  • Richard says:

    @andyp

    Best remember that at least ONE Cypriot law firm has been prosecuted for acting improperly on behalf of UK clients.

    Maybe the evidence was just so overwhelming on that one – the C.B.A risked being a laughing stock if they didn’t find in favour of the client.

    No matter – it proved they CAN do it – just I suspect most of the time they just don’t WANT to do it.

    Make sure your medication includes a spoonful of courage.

  • Richard says:

    @Odd Job Bob.

    1) I’m NOT advocating doing the ‘same thing over and over’ at all, or..

    2) Tilting at windmills either.

    If that’s the impression you have – Either a) I haven’t explained myself very well. or b) you haven’t listened, or c) a combination of both.

    I don’t know what your personal circumstances are – perhaps as an ex ‘investment banker’ you have a huge stash of cash that will bail you out of your problems and/or see you out throughout your life. If you do – good for you.

    Fact is – a lot of investors in Cyprus didn’t and don’t.

    As you are quite happy to observe my plans as some futile quest and attack me personally as such – I don’t think YOU have a right to crush other people’s hope who believe with persistence, intelligence and diligence they can architect a solution here.

    If you feel you can’t win – fine – you’ve already lost (unless of course – you’ve a load of old buddies in the banks over there maybe who are ‘seeing you right’ behind the scenes).

    Let’s not forget Bob – a big chunk of the world’s present problems stemmed from banks and their greed.

  • andyp says:

    Obviously The Cyprus Government for their own reasons likes this situation and the thought of earning a few euros rather than sorting the problem of corruption and fraud and earning a few hundred euros.

    Perhaps a confidence builder which requires no legislation is for The Cyprus Bar Association to step up to the plate and rid the crooks from their midst. After all their members who we all probably employed got us all into this mess and none seem to have been taken to task.

    I can dream can’t I? Best head off for my medication.

  • Odd_Job_Bob says:

    Even though Burke was the guy fundamentally opposed to the French Revolution (which just so happened to be fighting for the inalienable rights that we feel are being violated here, but I digress), an interesting question is whether there is a universal, transcendent definition of evil, or whether evil is determined by one’s social or cultural background.

    The ruling elite here is not evil. They’ve only been governing themselves since 1960 and screwed up the first 14 years so badly that they now have 37% LESS assets to play with. THEY WILL DO ALL THEY CAN TO PROTECT THOSE ASSETS.

    If you wish to tilt at windmills (The Ingenuous Low Born Noble Don Quixote of La Mancha), despite all the evidence, no-one is stopping you.

    However, to quote a previous source, Albert Einstein, “a definition of insanity is doing the same thing over and over again and expecting different results”.

    Last quote: “Tee tum, tee tum” (King Arnulf, Erik the Viking)


  • Richard says:

    “All that is necessary for the triumph of evil is that good men do nothing.” (Edmund Burke)

  • Costas Apacket says:

    Spot on Odd_Job_Bob.

    I’m very optimistic and positive that the Cypriots will continue to protect their own interests at our expense.

    Some people like to put their heads in the sand, others in the clouds (others possibly in the oven!) but I prefer to keep my head pointing in the direction of fairness and justice.

    I’m sure we’ll get there in the end, but ‘there’ may be different than we expect.

  • Odd_Job_Bob says:

    (Old joke, but fairly relevant): How many psychiatrists does it take to change a light bulb?

    Only one, but the light bulb has got to really want to change…

    Richard says, very eloquently: “What it requires is elevated thinking… a desired positive outcome shared by everyone (etc)”.

    No-one could possibly disagree with that statement, but can you see a problem here with the use of the word “everyone”?

    This particular light bulb really doesn’t want to change.

    I was in a certain African country a few years ago and was at a meeting of the SERIOUSLY WEALTHY. I was an investment banker (please, no puns) and was there specifically to help these people invest their perfectly legally acquired (ahem) VAST FORTUNES offshore. The topic of the meeting was, “How can we eradicate the widespread poverty in the country, (which was in the top 5 of crude oil-producers in the world)?” Everybody contributed ably to the debate and I sat there incredulous. I felt like screaming, “Stop embezzling like it was going out of fashion and investing all the country’s profits in your personal accounts offshore, that’s how!”

    But I wasn’t that brave…

    And I needed the deals…

    Change is internal. The people in a position to change things are the very ones who benefit from it being EXACTLY THE WAY THEY ARE.

    Property fraud is NOT illegal here (a civil as opposed to a criminal matter); proposed legislation offers an AMNESTY to those who have broken the law; the victims of crime are being proposed to PAY OFF THE PROPERTY DEVELOPERS’ MORTGAGES and cases take YEARS, sometimes even DECADES to go through court. A weird combination of coincidences?

    Problem solvers, by definition, think every problem can be solved. Some cannot without the desire of those at the heart of the problem. If the proposed legislation and ALL actions to date are not an unequivocal statement of the intent of this country’s government, then I’m a blue-bottomed starfish.

    Last point: if there’s anyone who, with the benefit of hindsight, would STILL have bought in Cyprus and is not looking to “unload”, please raise your hands…

  • Richard says:

    @Anna – sorry I didn’t include your point in my tome.

    I’m not suggesting an embargo on ALL property transactions on stuff already built – just those people still selling off-plan via brokers and via shows.

    Doing that would actually restrict supply & give you a better chance of off-loading – if that’s what you want to do.

  • Richard says:

    Please don’t take this the wrong way – but Cyprus is an extreme mirror-reflection of the WHOLE world – run on greed, and corrupt/irresponsible practices.

    It’s particularly acute in Cyprus for a number of reasons – all covered eloquently and fairly in this (and many other) posts – so I won’t go over them again.

    What I’m suggesting now is a ‘think yourself out of trouble group’.

    Why?

    Well – as Albert Einstein said: “The problems we face cannot be solved if we remain at the level of thinking we were at when we created them”.

    This is one of the coping stones of my UK business – where we help other businesses re-tune themselves by solving really hard problems in workshops!

    Cyprus is a really hard problem. But come on – is it worse than Japan? Is it worse than rebuilding Japan in 1945 after two nuclear bombs fell on them, and they were exhausted by war and on their knees? 25 years later they were an emerging superstate conquering the world (differently this time) by giving them consumer goods they wanted, rather than invasive aggressive action they didn’t.

    Compared even to rebuilding consumer and investor confidence in USA after 9/11 this is a piddly-squit international issue. It’s just magnified by us because it disproportionally affects us!

    What it requires is elevated thinking, positive belief over pessimistic realism, determination, a desired positive outcome shared by everyone and steady, firm, consistent pressure – ratcheting up till it can’t be ignored any longer.

    On top – let’s focus on what is GOOD & GLASS HALF FULL about this island – that is what personally keeps me alive & my head out of the oven (apart from the fact that it’s electric and fan-assisted of course).

    1) Cyprus is a low-taxation offshore location – that’s in it’s infancy.

    2) Cyprus is close to the Middle East & Africa. People WILL want to relocate out of some of those countries and be close to where they came from. They also will want a trade base that is (even if only just) in the EU close to it.

    3) Cyprus is an island – always invest in islands – even poorly run quasi EU banana republics run by ninnies.

    4) Cyprus banks and Greek banks are just in denial / deaf because they’ve done a hopeless, hapless, feckless job of running the shop alongside their lawyer/ surveyor / gov’t official buddies. They may have helped to eventually crash the Euro. If they do – I can’t imagine the IMF will ever let them stray out of sight again. That means (hopefully) by default – some investor input. If we are clever about this – we may be even able to pull off ‘a Mubarak’?

    5) People have short memories. I’ve lived long enough to see that. The weather on the island is nice, the cars are on a familiar side of the road. Investors WILL come back. UK is going to get more and more crowded. The NHS will be broken up, and people will work longer. The winter weather is also poo when you get older – I know – I have ageing parents who tell me this!

    The rules need changing – and this WILL happen. We just need to ensure it DOES.

    These are dark times – and we’ve all – let’s face it & be honest – gone a bit soft perhaps? Life has been good for a long time – now it isn’t so obviously so. Mistakes have been made – really thumping big ones – but considering in years gone by before Rutherford split the atom – we’ve have had WW3 by now – it could be a lot worse.

    Also- most of the greatest inventions and advances come out of bad times than good. This time we should include arbitration in that. Arbitration and negotiation are an invention – especially in unchartered territory.

    I’m pushing for a result here. I’ve invested too much of my last 5 years in Cyprus to go away empty-handed. If the likes of Conor have – I feel it may be temporary. Short term yes – long term no.

    Life battles don’t go to the strongest or the most aggressive. They go to those who can adapt and believe in winning.

    Let’s elevate our thinking folks – I’m afraid I’m with Uncle Albert on this one!

  • Odd_Job_Bob says:

    Anna, lots of people empathise with your position. We’re not trying to be negative for the sake of it, there just comes a time when being ultra positive in the light of what’s actually happening isn’t positive at all but delusional. It’s almost actually exacerbating the problem cos we don’t challenge the bad guys, they can keep on doing what they’ve been doing to cause the problems in the first place and they ultimately get away with it.

    Have you ever been to Hy Brazil?

  • Alan Waring says:

    Update. This scandal was finally reported in today’s CM page 6.

  • Anna says:

    Re Richard’s proposal that there should be an embargo on people selling to non-Cypriots worries me. If I want to sell my flat, which I do, how will I ever get anyone to buy it? It’s in a development which was exclusively marketed to Brits. I haven’t got title deeds and am still paying off a big mortgage.

    Does anybody want a nice flat near Larnaca, with gym, sauna, and swimming pool, near local shops? No locals would be remotely interested.

    What we should be doing is emphasising that Cyprus is a nice place to live, especially if you are retired, the locals are friendly and most speak English, and that there is a good ex-pat community, not that you should avoid buying in Cyprus at all costs.

    Just say “Buy a second-hand flat from a British expat, and you will get a great bargain, just be prepared to wait for your title deeds.” Be positive!

  • Alan Waring says:

    Rationally, a lot of the controls that posters cite as being necessary to protect buyers (existing and future) are eminently sensible. So, why are they not being operated? Part of the answer may be that the authorities in Cyprus have dug themselves into a hole that is too deep to dig themselves out of.

    The Raja-gate saga has been widely covered in the media outside Cyprus but not a peep here. I would hazard a guess that here the authorities are worried about the impact on inward investments if Cyprus came to be seen in a similar light as the Turks & Caicos Islands.

  • Odd_Job_Bob says:

    I agree with Richard re: what needs to be done to restore faith in the Cyprus property market. Does anyone out there believe any of his 3 points will ever happen? The EU is even breaking it’s own rules to keep countries in, will it now get tough on Cyprus? Evidence since Cyprus joined over the last 7 years suggests not.

    Even if it were to and the Cyprus ruling elite were to give up all its privileges (virtual freedom from prosecution, the ability to defy EU directives etc), everyone who had broken the law (Developers, Lawyers, Banks even) would get an amnesty, all defaulted mortgages would be miraculously cleared (from somewhere) and there were proper and enforceable laws governing property here, would it then be a good reason to buy here?

    People buy property for 2 reasons: 1) Somewhere to live and 2) Investment value.

    1) Somewhere to live
    There are now thousands, if not tens of thousands of vacant properties here. There are new developments springing up all the time, all without potential buyers. Prices in general here are high, there are few jobs and, apart from the sun, there is not enormous amounts to do here. As a result, rents are going down all the time and rental yields are LOW. Really, really low. If Cyprus is where you want to be, it’s sooooo much easier and cheaper to rent than to own

    2) Investment value
    Due to the huge excess of housing stock here, there is an extreme over-supply, especially in the areas favoured by tourists/ long term foreign residents (coastal towns etc). House prices have been falling sharply for the last 4 years and will continue. Massively. When the repossessions start happening, the rate will increase even more.

    So, even if (and its a massive if) all property problems were cleared up, is it worth buying here? There was a comment made on this forum a few days ago by someone called YouKnowWho.

    He was extremely critical of someone in the press recently who’s protesting his case (Conor O’Dwyer). At the end of his very anti-anyone-who rocks the boat-by-highlighting-injustices-in-the-Cyprus-property-market piece, he revealed he is selling up and moving back to the UK…

    Unfortunately, I think the first 6 words of Jim’s comment below are the most accurate on the forum.

  • out of the frying pan into the fire says:

    Robert and Costas are right.

    It’s no good shutting the stable door after the horse has bolted .

    We need to get the message out to any potential future buyers not those who have already brought.

  • Jim says:

    NEVER EVER buy property in Cyprus, unless the seller has in his possession, a clean title deed to that property. If you do otherwise, you risk losing everything.

    Never buy off plan, or listen to so called guaranteed titled deeds sales pitches.

  • Richard says:

    Whilst I admire the due diligence of people informing would-be purchasers of the pitfalls of buying in Cyprus – the elephant in the room here is fixing the issues for those who have already bought in Cyprus.

    Buying any high value, long term assets anywhere is a huge commercial risk – even in the UK – but what has shocked us as ‘Investors in Cyprus’ is the total lack of any discernible enforceable governance should anything need 1) investigation and 2) enforcement under the guidelines of the EU.

    What’s needed now in my humble opinion is three-fold:

    1) A temporary total trade sanction embargo preventing the sale of ANY further properties to non-Cypriot EU nationals – enforced IMMEDIATELY. No more stands at property shows, no more advertising on the web, nothing.

    2) A full & thorough investigation by the appropriately qualified staff in the EU to investigate the whole process of getting people to hand over money for these properties. A regulated forum and process of data collection that is open to all investors and not closed down by the Cypriot Government in ‘Gaddafiesque’ style.

    3) A period of negotiation with UK brokers, Cypriot banks, the Cyprus Bar Association, representatives of MIFID in the EU, etc to come up with a fair compensation system and a rescue package that is reasonable to both investors and those who have benefitted the most from selling property in Cyprus

    Without this – I cannot honestly see how Cyprus will ever be taken seriously again as a commercial or residential investment location now or ever again in the future.

    I know their president is a Communist – but hasn’t history taught him anything?

  • Steve says:

    Before buying in Cyprus I purchased a highly rated book on buying a home in Cyprus, read it thoroughly and was caught in the Cyprus property trap. The 32 pages that Nigel has written will probably complete that book. Until now they have been missing.

  • Costa Costas says:

    Thinking of buying A Place in the Sun?

    Thinking of buying in Cyprus?

    You would be better off investing your money in Chernobyl or Fukushima!!

    But stay away from the Banana Republic of Cyprus.

    END OF STORY!!!

  • Robert Briggs says:

    On hindsight, I would not touch anything here with a bargepole, end of story!

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