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Cyprus – Real Estate Transactions
Basic Principles to safeguard a Buyer and the process until possession
Buying a property in the Republic of Cyprus is a quite straightforward procedure. Evident of this fact is that a contract for the purchase and sale of land does not need to be in a written form to be valid. Relevant is Section 77 of the Law on Contracts (Cap. 149).In most cases, however, it is easily understood that a verbal agreement for sale of land is practically impossible. Buyers in such a case are required to have the necessary funds saved and must show an unnecessary high level of trust to the seller. Furthermore, any contract for the sale of a building or land which is not in writing can’t be enforced.Therefore, modern economic order requires the conclusion of written contracts that define in detail the rights and obligations of both parties involved and thoroughly regulate the time schedules for delivery of possession of land and the transfer of ownership.In this context, in addition to what will be discussed below, a prudent lawyer should always advise his/her client to strictly abide to the provisions of the Sale of immovable Property (Specific Performance) Law No. 81(1)/2011.In particular, clients should be instructed to have the executed contract stamped and filed to the land registry office where the property is situated within 6 months of the signing the contract. This is a necessary prequisite of the said Law. The said time frame can be extended through court application and if legal requirements are fulfilled.The filing of the contract to the relevant Land Registry Office is one of outmost importance because, on the one hand, it protects the buyer from the sale of the same property to a third party as it constitutes an encumbrance, and on the other hand, it is necessary in cases when the client seek the specific performance of the contract.Prior to the conclusion of the contract, a number of inquiries/searches should be made regarding the property's ownership status.Specifically, a lawyer should require from the vendor and/or his/her representative to provide the following:A) The title deed of the propertyB) a recent search through the “Ariadni” system at the land registry office where the property is located, to be determined if it is burdened with any encumbrancesC) to request and receive from the owner and/or the architect of the project a copy of the planning permit and building permit to examine / verify the legal status of the property.D) VAT statusProvided all the above is received and examined, it is necessary for the lawyer advising the buyer to include requirements in the purchase agreement that will create obligations for the owner to remove any encumbrances and to determine the time of delivery / transfer of the property. It is clear from the above that the process of drafting a sale agreement for land in Cyprus is not complicated, however there is a number of minimum procedures that must always be followed to safeguard the buyer.Marios Panayides
