Certificate of Final Approval

Do you have a problem getting your Title Deeds?
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lbrick
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Joined: 07 Apr 2008 16:29

Certificate of Final Approval

#1 Post by lbrick » 08 Apr 2008 12:38

Hello,
I was wondering if someone could provide me with some much needed advice. I bought an apartment off plan which has now completed and I have been fortunate enough to fnd a buyer for the property, he is however now concerned that there is no Certificate of Final Approval. Should I have been given one, how do I get one?
Thanks so much in advance.
Laura



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Re: Certificate of Final Approval

#2 Post by Nigel Howarth » 08 Apr 2008 15:00

Hello Laura and welcome to the forum.

Unfortunately, you can't get a Certificate of Final Approval - this is something your developer needs to sort out one the development covered by his Planning Permissions and Building Permits has been completed.

This is a short version of how it works:
  • Once the development has been completed, the developer gets in touch with the the Municipality/District Office/Town Planning Department. They send someone out to check that the development has been built in accordance with the Town Planning & Building Permits issued for its construction.

    If everything is OK, a Certificate of Final Approval must be sought from the Building Committee. Assuming that everything is OK, it can take 6 - 18 months to issue the certificate. But if there are problems, it can take significantly longer.
If you bought early on in the development, then it could be quite some time before the development is finished and you may have to wait quite some time for it to be inspected. It might be worthwhile having a word with your developer to see what progress is being made.

According to Article 10 of the Streets and Buildings Regulations Law, Cap. 96, it's illegal to occupy a building, until a Certificate of Approval has been issued for it. Property developers and buyers tend to ignore this law and the authorities seem unwilling or unable to enforce it. But last year the Interior Ministry decided to take action against a number of people in Paphos (but I believe they later dropped the case).

A retired British barrister friend of mine, refused to buy a resale property until its owner got a Certificate of Final Approval - it took a year!

Regards,


Nigel Howarth
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lbrick
Posts: 2
Joined: 07 Apr 2008 16:29

Re: Certificate of Final Approval

#3 Post by lbrick » 08 Apr 2008 16:10

Thanks so much for the quick response. Would there be any reason why one wouldn't be issued?



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Re: Certificate of Final Approval

#4 Post by Nigel Howarth » 08 Apr 2008 17:46

There are various reasons why a Certificate of Final Approval would not be issued:
  • The builder deviated from the Planning Permission and Building Permits.

    After they've taken delivery, buyers make changes to the property before the inspection's been carried out. E.g. They put in a swimming pools, build a car ports, enclose some of their open verandas, etc.

    And sometimes, builders build without any Planning or Building Permits!
When these things happen, it can take a very long time to sort out. The builder may have to apply for 'cover' permits, the illegal changes may have to be removed.

The process can drag on for many years. There's a situation at present in Larnaca District where the developer built without Planning and Building permits - buyers bought and moved in - but now the whole development is the subject of a demolition order!

Regards,


Nigel Howarth
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mickburder
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Joined: 23 May 2008 17:55

Re: Certificate of Final Approval

#5 Post by mickburder » 27 May 2008 19:42

Hi Laura
I too have purchased off plan, hoping to sell it on at around the time of completion. It completes in around 4 weeks.
After reading the forum on this excellent website, seems like I may be counting my chickens regarding obtaining the deeds and/or the certificate of approval.
How did you manage to find a buyer? privately or did you use an agent? If so who did you use?
My apartment is near Larnaca.

Any advise would be most welcome
Mick



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Re: Certificate of Final Approval

#6 Post by Nigel Howarth » 28 May 2008 09:27

Hi Mick & welcome to the forum,

I'm afraid there's a lot of property on the market at the moment and you may have to wait quite some time to find a buyer. I suggest you advertise it privately on the Internet before getting an Estate Agent involved - they charge around 5%. There are a number of sites around - for your end of the island, try the 'Eastern Owners & Buyers Forum' and there's also 'AngloInfo Cyprus'.

And if you decide to use an estate agent, make sure you use one that's legally registered (there are a lot of cowboy outfits about). There's a list of registered estate agents on my main website in the 'Download' area in the 'Resource Centre' section. The fees charged by a registered estate agent are an 'allowable' expense that you can use to help offset your Capital Gains Tax liability.

Although you can advertise your property and (hopefully) find a buyer, you'll need the agreement of the developer to be able to sell it. This is due to the fact that you're not considered to be its legal owner because you don't have the Title Deeds - so you need the developer's consent.

You should discuss the matter with your developer and also check that you have a 'right to sell' clause in your contract. This will look something like the following:

  • “If at any time after the signing of the present agreement the Purchasers desires to sell the said Property, they will have an absolute right in doing so as they are deemed to be the beneficial owners of the Property providing that the Purchasers have fulfilled all their obligations as herein provided. The Vendors shall be obliged and cannot in any way object to and /or deny and/or withhold their consent to sign any necessary cancellation contract and new contract of sale with the new purchaser/s, provided that the vendors shall not be liable for any taxes and/or other related expenses as a result of such transaction.”


If you don't have such a clause, you may find the developer will try to charge you like a wounded bull for the 'privilege' of selling.

And some some developers will act as agents on your behalf - someone else was looking at this - his developer was charging 8%. But there is a pretty lucrative scam going on at the moment involving property developers reselling property - there's more about this on my (new look) news site.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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mickburder
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Joined: 23 May 2008 17:55

Re: Certificate of Final Approval

#7 Post by mickburder » 28 May 2008 14:17

Hi Nigel
Thank you for your advice, I do have a "Freedom to Sell" clause in my contract very similar in wording to your example. I also emailed the developers about the costs involved if I sell it on and they replied...

Basically the costs involved for you are the following:

From our part we must sign a cancellation and a new sales agreement with the new buyer. These will be drafted by your lawyer. The capital gains tax on your profit is payable by you. From our part because we are canceling the original agreement with you and doing a new one we must deduct from your proceeds the Vat on the profit since in effect we are buying it back and reselling it . In addition for our services we charge E 500.
Your lawyer will be able to advice you accordingly on the above. The agents commission is something you must agree with them and so are the lawyers fees.
Our opinion is to approach several estate agents so that you have a better chance to sell it at a profitable price. End


Is this normal costs for this type of thing? They don't seem extortionate.
I presume if I cannot sell the apartment for a few months and I am in possesion of the deeds, there will be no charges to pay the developer.

kind regards
Mick



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Re: Certificate of Final Approval

#8 Post by Nigel Howarth » 29 May 2008 11:06

Hi Mick,

Those charges are reasonable - €500.

But unfortunately, some people are charged considerably more!

Cheers,


Nigel Howarth
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