Cyprus Property Forum for Buyers, Sellers & Investors

We have just returned from a fantastic 2 week holiday in Nissi Beach in a rented apartment. we have been to Cyprus a few times before and really like the Island.
Whilst out there we saw a rather nice 2 bedroom apartment which we are considering putting an offer in for. I do not need a mortgage to buy the aprtment.
My intention is to let family and friends use it paying enough just to make it pay for itself and possible rent it out to Scandanavians over the winter months - there seems to be a large contigent who come to Nissi every winter to escape the harsh winter.

I will be using an independent lawyer who has been recommended to me(not by the Estate Agent!)

The property is only a few years old and does not have Title Deeds - my main concern is how to protect my investment(ie from losing it!)
I have read the Golden Rules but am still not 100% sure. Under what circumstances could I lose my property and investment? eg. should the developer go bust.

The property has been recently reduced in price but I still think as a cash buyer I should be able to go in with an offer 15% less than the asking price.

Any advice would be most welcome.

Hi decho and welcome to the forum.

The first thing your lawyer needs to do is to get the Land Registry to carry out an N.50 search. This will highlight any claims, mortgages and other encumbrances that could prevent you getting title to the property. (Or you can do this yourself using the guide and forms I've prepared at New title search procedures in Cyprus).

Your lawyer also needs to check whether planning and building permits have been issued - and also a Certificate of Final Completion.

(Follow the checklist at the back of my guide).

And I suggest you use one of the lawyers on the list provided by the British High Commission in Nicosia - hopefully the one you have been recommended will be on that list.

Also, I suggest you use the vesting/assignment contract that was introduced last year.

If the N.50 search shows that there is a mortgage on the land/property, can pay the mortgagee (the bank) the outstanding amount of the mortgage (in return for a mortgage release certificate) and the balance to the vendor. So if the property is priced at €80,000 and there is an mortgage of €10,000 - you pay the bank €10,000 and the vendor €70,000. (Read more about this at New specific performance law increases safeguards).

Remember that as it is an apartment, you will have to pay fees to the Management Committee for insuring, maintaining, repairing, cleaning, etc. the common parts of the building - entrance halls, stairwells, gardens, swimming pools, etc. More about this at Managing Cyprus apartments and building complexes.

You may also want to have the property independently inspected and valued by a RICS valuer/surveyor to make sure you'll not be paying over-the-odds for a mediocre property that may need remedial work.

As the Title Deeds have not been issued, you should retain some of the money until they have been issued.

Do not expect to cover your costs by renting it to tourists - particularly out of season tourists. The market is awash with holiday apartments and there are also many thousands of unsold holiday homes on the market.

Even though you may have paid in full for the property, you will still be at risk if his company goes bust. The only way to easily avoid such a risk is by buying a property that already has its Title Deed.

Regards,

Nigel Howarth wrote: Even though you may have paid in full for the property, you will still be at risk if his company goes bust. The only way to easily avoid such a risk is by buying a property that already has its Title Deed.

Thanks for all your very useful advice - its much appreciated.

One things that springs to mind, is it possible to take out insurance against this happening? If not I assume it would be because it is too high a risk, and yet there appear to be thousands of properties without deeds, very little building going on and so the Developers must be hitting on hard times, unless they are living of profits from the past. So, does this mean that all these property owners are shaking in their shoes just hoping and preying this does not happen?

decho wrote:is it possible to take out insurance against this happening?

Yes - this is possible using a 'Bank Guarantee' as described on pages 8 & 9 of my 'Golden Commandments'.

Another possible solution could be to take out a small mortgage on the property (I don't know anyone who has done this or indeed whether it would work). Looking at this logically, I cannot see any 'sensible' bank trying to recover a property from one of its clients providing they were maintaining their mortgage repayments. (But I have to admit that the banks here do not always act 'sensibly').

There are a lot of concerned buyers! We do not know the true extent of the problem - or what agreement may be reached between the government and the troika regarding nonperforming loans.

Regards,