Choosing your property developer
There are good developers, who will build on time, within budget and to a good quality. But on the other hand, some developers are little more that outright sharks. And some of the larger property developers in Cyprus are the biggest sharks ever to have been seen in the Mediterranean!!
The problem is that virtually anyone in Cyprus can set themselves up in business as a property developer. There's no qualification-based licensing system or an authority empowered to regulate the industry.
Things to watch out for
Some property developers sell off-plan property before the required building permits have been issued for its construction. Some even start construction work without these permits (which is illegal). This can cause problems for for those buying off-plan:
- It takes a long time to resolve planning 'infringements', and Title Deeds cannot be issued until those infringements have been resolved.
- If the 'infringement' is serious, the authorities can issue a 'Demolition Order' against the owner or tenant of a property that has been built unlawfully.
- One couple I helped bought a luxury off-plan penthouse apartment, which was on the third floor and which offered unobstructed views of the Mediterranean. Some months and stage payments later, the developer contacted them to say that they couldn’t have an apartment on the third floor, but they could have one on the second floor instead. Needless to say the couple were very annoyed - they were absolutely furious when they discovered they couldn’t get out of their contract or get their money back! (They’d used the developer’s ‘pet’ lawyer). I soon discovered that there was a two floor height restriction in the area in which the apartments were being built - a fact that the property developer would have undoubtedly known about when he sold the couple an apartment on the third floor!
You can find a good property developer if you take your time and do your homework properly. If you follow the proven approach in my property guide you'll soon find out how to tell the good property developers from the sharks.
So what are the benefits and disadvantages of buying off-plan property in Cyprus?
Advantages of buying off-plan
- In a rising market, it is possible for the price of the property to increase between the period of signing the contract and taking delivery. So by the time you take delivery, its value could have increased.
- Build time should be relatively quick - expect to take delivery within a year to eighteen months.
- Your day-to-day involvement in the project should be considerably less than buying a custom home.
- You can choose the location of your new property from one of many sites.
- You may be able to choose the layout from one of the standard designs provided by the developer.
- You may be able to make some changes to the design using the developer's architect.
- You can choose the finishes, fixtures and fittings, from a selection provided by the developer.
Disadvantages of buying off-plan
- Buying off-plan will cost you more than buying an equivalent resale property or custom property.
- Even though build time should be relatively quick, many people are not prepared to wait the twelve to eighteen months it takes to build a property, particularly if they want to move in quickly. (If you're in this position, consider buying a resale property).
- Beware of hidden extras. Items you would expect to be included in the selling price may be charged as extras. E.g. double-glazing, central heating, air conditioning, window shutters, insect screens, and even garage doors!
- Making simple changes to your property, such as replacing a single power socket with a double or moving a light switch may prove expensive.
- The range of fixtures and fittings offered may be limited and comparatively expensive.
- You will pay a high Property Transfer Fees (as these will be based on the price of the land and the dwelling).
- You will probably have to wait many years until the Title Deeds are available.
- Until the Title Deeds are registered in your name, you will be unable to make changes to the property without the consent of the property developer from whom you bought it. And remember too that you may need Planning Permission or you may have to demolish any changes you make.
- Similarly, if you want to sell the property before you
have the Title Deeds, you will need the consent and co-operation of the
Be warned - some developers have a 'closed shop', which means that you can only sell it through them - and also watch out for the resale property scam and the contract cancellation scam.
Advice for off-plan property buyers
- Follow my advice in the 'Legal Advice' and 'Property Conveyancing' pages.
- Make sure you check out the financial standing and credit-worthiness of the developer.
- Make sure you check the quality of his work and his after-sales service.
Visit older property's he built and and ask their owners how good (or bad)
he was - just knock on any door.
If you want to get a true picture, avoid visits that the developer has set up!
- Ensure that everything the developer has promised to supply is listed in detail and attached to the contract as a formal annex as well as the architectural and structural drawings for your home, including the land, showing all the dimensions.
- Once you have agreed the specification & price of your off plan property, do not make any changes.
- If you are unable to be in Cyprus while your new property is being built, appoint a reliable individual or company to watch over its construction, update you on progress reports and represent your interests with your developer & lawyer.
- Make sure your property is finished before making the final payment. A finished property is one that is complete in every detail (as defined in your Contract of Sale). If you are expecting:
- communal services such as swimming pools, tennis courts, etc,
- infrastructure such as roads, parking areas, external lighting, landscaping, water, & sewerage,
- electricity and telephone services
- Never hand over money without checking progress. If you're not in Cyprus to do this yourself, ensure your representative (see point 4 above) checks that each stage of the construction has been completed, as per your contract, before you hand over the money.