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Cyprus: buying property

The UK Foreign & Commonwealth Office has recently updated information for British nationals wanting to buy property in Cyprus; further information be found on the UK.GOV website.

Buying property in Cyprus PURCHASING property in Cyprus has a number of 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 it means your property could be at risk.

Mortgage liability

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 on the property, then you are likely to become liable for that mortgage should the builder, developer or landowner declare bankruptcy.

You should ask your lawyer to check for mortgages placed on the land through a Land Search Certificate which is obtained from the Land Registry. It should be noted that in order to obtain a Land Search Certificate one requires a relevant authorisation from the Property’s owner. If you are made aware of a mortgage before 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 acting for both vendors or builders therefore not independent.
  • building works taking place without the correct planning permission or building permit (eg electricity or water).
  • fluctuations in currency and interest rates affecting mortgages.
  • payment plans or fees not being included in the initial contract.
  • difficulty in obtaining certificates of final completion (deeds cannot be issued without this).
  • 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.

If you have purchased a property or 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. However, we direct British nationals to organisations who may be able to help and we can raise systemic issues, problems which affect a number of customers, with local authorities.

You can check on the Association of International Property Professionals website to see if a company or legal advisor are members.

Legal advice

British citizens affected by property problems should take independent legal advice from local lawyers.

Complaints against lawyers

Complaints against lawyers practising in the Republic of Cyprus should be addressed to:

The Cyprus Bar Association
Florinis 11, off.101, 1st Floor,
1065, Nicosia P.O.Box. 21446,
1508, Nicosia – Cyprus

Telephone: +357 22873300 Fax: +35722873013

Email: cybar3@cytanet.com.cy

Website: www.cyprusbarassociation.org

Help in the UK

We have published advice on which UK authorities to contact if you think you have been a victim of property fraud.

If you were living in the UK when you made your purchase you may wish to contact the UK European Consumer Centre. This is part of the European Consumer Centres Network (ECC-Net) that has been set up by the European Commission in co-operation with member states to help consumers with cross-border disputes. The UK European Consumer Centre gives information and advice on problems with buying across borders and can arbitrate when problems arise if they think it might help.

Address:

UK European Consumer Centre
Chartered Trading Standards Institute
1 Sylvan Court
Sylvan Way
Southfields Business Park
Basildon
Essex SS15 6TH

Telephone: +44 (0) 1268 886 690

Fax: +44(0)1268 582 225

Email address: eccnet-uk@ec.europa.eu

Further reading on gov.uk

Cyprus: buying property. Information on laws and taxes for British nationals who want to buy property in Cyprus. (Full article)

Cyprus: lawyers. List of English-speaking lawyers for British nationals in Cyprus.

Readers' comments

Comments on this article are no longer being accepted.

  • Adele says:

    Thank you for your comments , much more positive than I was led to believe.

  • Adele says:

    My property completed in 2010 in Tersefanou and still no Title deed to date, apparently the land approval certificate is completed just the building separation to go…. I believe the land is mortgaged to the extent that the bank required to developer to mortgage the land for security against my loan, it states this on my loan documents.

    The developer told me without them mortgaging the land no-one would be given a housing loan. I also have a waiver letter from the bank whom the land mortgage is with which states they will release me from their mortgage once the title deed is issued.

    Not sure if it’s worth the paper it’s written on. The purchase agreement was registered with land registry back in 2007, and I feel fortunate the property completed as many didn’t in this area. Any thoughts would be much appreciated.

    Ed: What your developer told you is correct. It’s rather complicated – I’ll try to explain.

    The bank will only grant housing loans if it can have ‘first claim’ on the property; this is the mortgage granted to the developer. This first claim enables the bank to a repossess a property if its buyer fails to make repayments on their housing loan. If you like it’s a form of collateral.

    If you buy a property with a Title Deed the bank would grant you a mortgage, which is a special kind of loan that uses the property you’re buying as collateral.

    But when you buy off-plan, the bank cannot grant a mortgage as the collateral (the property) does not exist. So you get a housing loan.

    Now it gets interesting!!

    Once the Title Deed is issued, your home loan will be converted to a mortgage – and this mortgage is lodged as a claim against the property (in the same way as the developer’s mortgage.) AND the Land Registry will charge you 1% of the loan it advanced you (not the outstanding balance). So if it all possible you should repay the balance of your home loan before the property is transferred to you as you will avoid this 1% charge.

    The waiver from the bank is good – if the developer fails to repay his mortgage, you will still get the Title Deed.

  • George jobson says:

    It has only taken 20+ years to put this warning into print, how many people have lost everything due to the unscrupulous Cypriot practices. Disgraceful.

    Ed: George, as I replied to an earlier comment, this information has been on-line for several years and was amended on 27th November. My website has been available since 2004 warning of the problems people face.

    Yes, the Cypriot practices are disgraceful and, in some cases I expect, criminal. But while the money keeps rolling in, there is little incentive for the Cyprus government to sort out the many problems.

  • Sick and Tired says:

    It is very pleasing that the Foreign and Commonwealth office have acknowledged the conduct of the Cypriot Property Market and directed victims to complaints procedures.

    My experience of EU complaints procedures is not a pleasant one, I it is a laboriously lengthy process that yields no results as the Cypriot Government anticipate the infringement proceedings coming to fruition and conveniently wriggle out by a change of law with no retribution for prior victims other than their option to begin a new lengthy, costly legal battle in the notoriously slow and nepotist Cypriot Legal System.

    As Pils says in his excellent comment below this advice is decades late for the people who were believers in the EU and Commonwealth.

    The best part of the article is the Foreign and Commonwealth Office to acknowledge that there is very little possibility of legal recourse after any property sales completion, in other words “Do not Invest in Cyprus” !!!

    The very sad fact is that there is no accountability mentioned for the unscrupulous estate agents operating in the UK whom knowingly instigated and brought about the demise of so many of their once successful trusting fellow countrymen.

    It is a soul destroying experience with no route to punishment for all those responsible to gain closure in any reasonable lifetime.

    Living in hope something will make it to a court soon. Good Luck to you all.

  • David says:

    Better late, than not at all, but why so late? We remember well (very well) 20 years ago getting a lawyer in another town to get independent advice. Also receiving assurances from the largest developer in Paphos that our Title Deeds would be issued in two years, it took 12 years!! Then only by fighting hard during the 10 years after the 2year grace period. All this after we found out that when our sales contract was deposited with the Land Registry Office, that there was not a mortgage on our land. Not withstanding this fact, the developer managed to get a mortgage with Alpha Bank on our land!!! Thereby denying us our Title Deeds. The moral in this story is; do not trust any of the people or authorities involved in the housing industry and never buy property without Title Deeds.

    Ed: This information has been available for 12 years – but as you’ll see from the introduction the UK Foreign & Commonwealth Office updated the advice recently (2 days ago.)

  • pils says:

    This article to late for many who have been ripped off by developers, Cyprus government, and banks with no help from the UK government. This advise would have been helpful to many a decade ago.

    Many still living a nightmare and nothing as been sorted out, we all live in hope that a resolution is resolved soon.

    From experience would not buy in Cyprus, buyer beware !

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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