As a foreigner (and crucially when there is no separate title deed for a property), you’re strongly advised to sign a written sale contract and deposit it at the Lands Office , thereby placing a legal charge on the property. The contract must be deposited within two months of signing because otherwise the seller can change their mind and you will have little recourse. Depositing the contract will mean that the property cannot be sold to anyone else before you receive the title deeds, this may be months or even up to years later.
If you’re buying a property on a development, the developer probably has the title deeds to the whole development and it will be a longer process to get hold of the title deeds for your particular property. It is therefore particularly important for the sale contract to be deposited at the Lands Office until your title deed is issued.
Although your lawyer will deposit the contract on your behalf it is always advisable to be aware of all the procedures and requirements involved in the process to not be surprised. The first of these is the contract must be deposited at the Lands Office in the district where the property is situated. The original contract is required for checking but will be returned to you and a copy retained by the Lands Office. Both the original and the copy must be stamped by the Lands Office. Any mortgages on the property must be declared (so that the lender can claim the property if you default on payment). Then, you should then go to the local tax office (Internal Revenue Department ) and pay the stamp duty. The final step is the submission of a declaration of transfer of the property.
Conditional Clauses
Whether for new or for resale properties, sale contracts usually contain a number of conditional clauses that must be met to ensure the validity of the contract. Conditions usually apply to events that escape either the vendor or buyer’s hands, although almost anything that the buyer agrees to with the vendor can be included. If accessories, such as carpets, curtains or furniture, are included in the purchase price, you normally have a separate, simple agreement drawn up listing all the items.
Any fixtures and fittings present in a property when you view it (and agree to buy it) should still be there when you take possession unless otherwise stated in the contract. There are many possible conditional clauses concerning a range of subjects that can be included in the contract. Nonetheless, there are a few that have to be present to be on the safe side. Being able to obtain a mortgage, although you should always obtain agreement from a lender before signing a contract; being able to obtain planning permission for construction or renovation work; being able to sell another property; that you obtain a satisfactory building survey or inspection (note that you’re responsible for organising this); that permission is granted by the Council of Ministers , if appropriate. Usually the contract allows for the sale of the property or a reapplication in the event of initial refusal.
You should discuss with your lawyer whether any conditional clauses are necessary. Matters such as building permits and dependence on another sale should always be included, but take advice on other conditional clauses. All conditional clauses must be approved by the vendor, and too many may make it impossible to conclude a sale. For example, a conditional clause that there should be no plans to construct anything (e.g. roads) nearby which would adversely affect your enjoyment or use of a property is unlikely to be accepted.
If any of the conditions aren’t met, the contract can be suspended or declared null and void, and the deposit returned. However, if you fail to go through with a purchase and aren’t covered by a clause in the contract, you will forfeit your deposit or could even be compelled to go through with the purchase.
Mortgage
If you’ve arranged a mortgage, you must declare it and register it at the Lands Office at the same time as you deposit the signed sale contract. Your lawyer will advise you about this and collect all the required paperwork. They will need to complete a Contract and Declaration of Mortgage (N271) in triplicate and prove that all relevant duties and taxes, including utility bills if appropriate, have been paid. Most importantly, the title deed of the property under mortgage will have to be supplied to ensure that there are no other charges on the property.
Moving in
If you’re buying a completed property, once you’ve signed the sale contract and paid all required fees, you’re entitled to the keys and you may take possession of your property, even if you don’t yet have the title deed.
This article is adapted from Buying a Home in Cyprus from Survival Books.