CYPRUS is a popular destination for British nationals wishing to retire or purchase a holiday home overseas. Many British nationals have purchased property in Cyprus without too much difficulty.
However, the process of buying land or a property in Cyprus can have many potential pitfalls. The British High Commission advises potential purchasers to exercise extreme caution when buying a property if the title deeds are not readily available, as to do so means that your property could be at risk.
It is common practice for developers to take out mortgages on land or property. If you sign a contract with a developer and there is already a mortgage, loan or claim placed upon it by the developer or landowner, then you are likely to become liable for that mortgage should the builder, developer or landowner declare bankruptcy.
You should request that your lawyer checks for mortgages placed on the land. If you are made aware of a mortgage prior to signing a contract it is unlikely that you will obtain the deeds in your name until the mortgage is paid off. Lawyers are not required to check for mortgages automatically although good lawyers should do this as a matter of course.
In 2011 the Republic of Cyprus Government introduced a Specific Performance Law to give a contract of sale precedence over any pre-existing mortgage however we still strongly recommend that you check no mortgages have been placed on the land prior to purchase to ensure you do not run into potential difficulties at a later date.
Other issues most frequently raised by British nationals include:
- Lawyers also acting for vendors or builders therefore not independent.
- Building taking place without the correct planning permissions/building permits (e.g. electricity or water).
- Fluctuations in currency and interest rates affecting mortgages.
- Payment plans/fees not being included in the initial contract.
- Difficulty in obtaining certificates of final completion (without which deeds cannot be issued).
- Difficulty in obtaining title deeds.
- Difficulty in obtaining redress after problems are identified.
With all property purchases, we strongly recommend that you seek your own independent legal advice. A list of English speaking lawyers can be obtained through the lawyer’s link.
If you have purchased a property/land and are encountering difficulties, you should seek qualified independent legal advice on your rights and methods of redress.
The Foreign and Commonwealth Office and the British High Commission are not able to offer legal advice or become involved with disputes between private parties. We can, however, direct British nationals to organisations who may be able to help and we can raise systemic issues with local authorities.
The High Commission publishes answers to Frequently Asked Questions about buying property.
You may also wish to check on the AIPP – Association of International Property Professionals website to see if the company/legal advisor you are wishing to deal with are members.
Crown Copyright 2012
Now they have made this point will they help us to get our deeds and get the market working again.
@ AndyP
I feel there is a good Scots expression to describe the leadership of the CBA
Toom Tabard
As far as I know Denton SHE did not appeal the CBA verdict either despite her outbursts. Why would SHE?
Picking a good lawyer is quite simply a lottery in my opinion. At least these days names to avoid are starting to come into the public domain.
Confidentiality and non-dislosure agreements or we won’t pay you?!! Sounds like yet more institutionalized crookery to protect the crooks. They obviously know they have done wrong yet still expect to benefit further from it at every turn.
I have just had to refer my lawyer (whom I regard as a paragon of virtue in this viper’s nest) to some of the articles and blogs on this site, as she couldn’t believe it was as bad as it is. And no, it’s not THAT ‘she’ – she does not drive fast cars, get convictions, get presidential pardons, get found guilty and fined for conduct damaging to the lawyer profession and make petulant threats against her former clients.
As others commented here, the good and upright lawyers are cocooned in a self-protective bubble of the Three Wise Monkeys. They will not take on the legal Establishment to cleanse it of corruption.
@Milo – We reported this problem a few days ago – see It is like getting blood from a stone. The lawyer is well known!
@Andrew – yes the couple in the report did the receive the money.
I know of other cases that have been settled out of court where the complainants were paid compensation after signing confidentiality/non-disclosure agreements.
The only evidence that I can find of an independent lawyer in Cyprus is the father and son firm who won this case for their client. This was a landmark ruling and as such it shows that no other firm has been willing or able to extract justice through the legal system here:
Landmark ruling by the Supreme Court
Did these unfortunate people ever get the money awarded to them though?
Added to these well known problems are now others! One British purchaser who was lucky enough to sell, an achievement in the current climate, has so far for five months been unable to get his lawyer to hand over the sale money! When he posted the fact on the eastern forum, it appears there are others who once sold endured difficulty in retrieving sale funds off certain lawyers.
It never stops…the BHC are wise to warn prospective buyers, and I applaud that. But for those of us who own property in Cyprus with clear deeds etc, you will in future be hard pressed to find a British buyer! To sell at all will be extremely difficult, even with correct paperwork, mud obviously sticks.
British High Commission ???
Stables and bolted Horses
Always good to pile in after the event and pretend that it’s your idea
@Nigel to your reply to andyp. No contest, but in highlighting the failure to consult an independent and trustworthy lawyer, aren’t you skipping over rather lightly the equally huge problem of there being no reliable means to identify which lawyer is independent and trustworthy? The CBA, if it bothered to reply, would doubtless claim that all its members are independent and trustworthy (which is contrary to the evidence). Also, on past evidence even the BHC list is no warranty, although it is a good start.
No one takes on a lawyer that they know is dodgy. So, how realistically can a buyer do as you rightly suggest?
We can only hope that the Troika will ask the Cypriot Government why it is that they do not take advantage of the circa €1 billion in transfer tax revenue that would be readily available to them if they just got their finger out and stopped blocking the issue of clear legal Title Deeds to those property owners who are willing to pay.
Of course to do this effectively the Troika would also have to deal with the outstanding non-performing Developer loans that the Banks seem determined to misrepresent within their books and the outstanding taxes owed by Developers to the State.
So this would possibly mean large debt write offs by the Banks for their non performing Developer loans,(Est. €6 billion?), possible write offs of non collectable Government tax revenue due from insolvent Developers and the potential pursuit of Developer assets. (Good luck with that one!)
Now we see why the predicted potential €15 – 20 billion ESFS bail out loan may be required.
Wow brilliant.
Well done Bill.
@andyp – The problems people refer to are just the tip of the iceberg!
The two major problems are:
1. People fail to take legal advice from an independent and trustworthy lawyer.
2. Title Deeds are not available on delivery of a property.
Next in line:
3. People sign contracts to buy property without having first secured the necessary finance.
4. People do not take out life insurance to cover their mortgage.
I wonder if we have actually come across all the scams that have affected buyers in Cyprus.
As this article is likely to archive if OK with you Nigel I will start a new thread on the forum page and perhaps people should simply add their own buying experience?
If you have not got them all already Nigel you could then update your buyers guide if necessary.
@Fighting For Justice – Bill Cash raised the subject in the lower house last Tuesday. The Foreign Office Minister, Jeremy Browne, replied:
Mr Cash: Will the Minister commit to looking into the question of the fraudulent title to land? Many thousands of English – British – people have land in Cyprus. I raised that matter when I visited. Will he commit to taking that forward, to ensure that there is a proper resolution in the courts so that these titles can be remedied?
Mr Browne: I will happily undertake to task the Department with looking into that. The Minister for Europe or I will write to my hon. Friend.
(It’s recorded in Hansard)
You might wish to add Jeremy Browne to your ‘target list’ along with David Lidington (Minister for Europe).
Or- Your lawyer confirms in writing that your contract has been registered but in fact it has not thereby allowing your developer to register a mortgage which was NOT there when you signed your contract.
Having said that I think Matthew and his team at BHC do deserve some credit. They have done a hell of a lot more to highlight issues and help than the previous office holder ever did.
Cheers Nigel. Willian Hague is on the ‘target list’.
I can’t fault the actions of Bill Cash so far. He is well on the ball and champing at the bit.
@Fighting For Justice – The British High Commission doesn’t act independently, it is guided by its political masters in the UK.
The Secretary of State for Foreign and Commonwealth Affairs (William Hague) is the chap you need to convince – and his government colleagues.
@Jim
I am now of the firm and definite opinion that it is time the British High Commission came out and directly stated exactly what you say. Never buy unless accompanied by clean title deed.
I am totally fed up with all this pandering to the “we mustn’t upset them too much”. It is time the BHC remembered that it is the British they are there to protect.
2 weeks ago my MP, Bill Cash, set up an All Party Parliamentary Group to protect the rights of the British property buyer in Cyprus. Several other MPs have now joined him in this group. We are going to move forward with several proposals.
If the British buyer is so important to Cyprus then their Government has to power to issue those deeds and sort the mess out.
NO MORE FOBBING OFF.
… Or the proxy sellers (when the vendors don’t actually exist but are fronts for the solicitors).
Or the 3rd party landowners where the developer doesn’t own the land at all but develops it on behalf of the actual landowner, offering him a flat or two in exchange. Once the building is completed, the developer disappears and as there is no agreement between the landowner and the purchaser, well, you can kinda guess what happens next.
Or “incorrect” deeds, which are drawn up to include land which does not belong to developer. Said deeds are thus invalid.
Or “memos” against the property, which are unpaid debts usually incurred by the developer, say to the architect who drew up the plans or the builder, tiler, carpenter etc charged against the property and needing to be discharged before deeds can be made available.
Or cost of compliance for various “optional” services to be added to the development, such as water, electricity, access roads, street lighting, adequate green space etc.
Or the possibility of “tainted” title deeds, where planning infringements are just too great to be paid off.
Or…(please append where appropriate).
Another point being the extortion by the land registry on behalf of the ROC.
Two more points.
The building doesn’t conform to the agreed written contract.
The developer demanding more money once work has started above the contract price.
The high commission forget to mention other important points that will deny a buyer their title deeds.
A developer owing any taxes to the government will not be able to provide a title deed. Mortgages you can check on, unpaid taxes, you cannot.
Buyer beware. Never, repeat never, buy any property in Cyprus that does not have a clean title deed available at point of sale. If you do, you may lose everything.