Get­ting to grips with the ti­tle deeds is­sue

Financial Mirror (Cyprus) - - PROPERTY - Μy Antonis Loizou

In ef­fect, the new leg­is­la­tion stip­u­lates that if a prop­erty is bought and the con­tract of sales de­posited prior to 31.12.2014, a free trans­fer (of mort­gages) can take place pro­vided that the buy­ers do not owe any amount to the seller and they paid at least 80% of the sales price with the 20% bal­ance to be de­posited at the Land Registry Of­fice spe­cial ac­count. (Note, the Direc­tor of Land and Sur­veys stated that pur­chasers can ap­ply even when the sales con­tract has not been de­posited by 31.12.2014 but a court or­der is re­quired).

Also, in case of in­ex­cus­able de­lays for the is­sue of ti­tles by the seller, the buyer can ap­ply to the Land Registry Of­fice to have the ti­tles is­sued if there are no prob­lems of per­mits, etc. The deeds will be is­sued in the name of the reg­is­tered owner how­ever and not the buyer. Once is­sued, the buyer can ap­ply for a di­rect trans­fer. There still re­main le­gal is­sues re­gard­ing the block­ing of trans­fers, but it is ex­pected that this prob­lem will be by-passed. An­other ben­e­fit is that for prop­er­ties which are bought post 31.12.2016, no trans­fer fees will be paid if VAT is ap­pli­ca­ble/paid and if no VAT a 50% dis­count is made.

All this is good news giv­ing some piece of mind to trapped buy­ers.

Hav­ing said this, prop­er­ties sold and ti­tles avail­able, if the buy­ers are not in­ter­ested in a trans­fer (pay­ment of trans­fer fees, bal­ance of pur­chase price, etc) the seller can ap­ply to the Land Registry and have the prop­erty trans­ferred to the buyer (with the prop­erty be­ing charged for the cost).

This is a ben­e­fit to the seller since the reg­is­tered owner/seller is li­able for the pay­ment of mu­nic­i­pal and other taxes, be it that they can pass them on to the buyer. In var­i­ous cases, the au­thor­i­ties will not al­low other prop­er­ties of the seller to be trans­ferred if a par­tic­u­lar prop­erty is bur­dened with its taxes, notwith­stand­ing the li­a­bil­ity of the buyer.

The mis­takes of the past have taught us many lessons and these new laws do not mean that one should do with­out the re­quired due dili­gence by the prospec­tive buy­ers. Part of the wrong­do­ings are the buyer’s fault, part by the es­tate agents and the ad­vo­cates (not do­ing their job right) and of course part by the sell­ers-de­vel­op­ers and oth­ers.

Our sug­ges­tion re­gard­ing buy real es­tate is as fol­lows: Ap­point a knowl­edge­able ad­vo­cate to han­dle your sale/ac­qui­si­tion (there are some who do not do the job prop­erly, whereas oth­ers charge the earth for a sim­ple sales con­tract). An or­di­nary house con­tract should not cost more than 1,000 euros + VAT.

The ad­vo­cate should do his due dili­gence on the buyer’s be­half by check­ing if the prop­erty is mort­gaged (not a ma­jor prob­lem as such if a mort­gage re­lease is se­cured), check if any taxes are due (the seller’s re­spon­si­bil­ity up to the sign­ing of the con­tract and get a re­lease up to that date).

Do not be en­cour­aged by the seller for un­der-declar­ing the sales price for which you will be told that the trans­fer fees for which you are li­able will be re­duced to your ben­e­fit. Not only is it il­le­gal, but in the event of a re­sale you will be charged more, since cap­i­tal gains is charged on the dif­fer­ence be­tween your de­clared ac­qui­si­tion price and sales price. Not worth it, es­pe­cially now with the re­duced trans­fer fees.

Check town plan­ning zones, build­ing per­mit, fu­ture/pro­posed schemes, town plan­ning re­quire­ments the agent/or your ad­vo­cate).

Some­thing which is needed is to check the com­mon ex­penses charges and whether there is in place an ad­min­is­tra­tive com­mit­tee to man­age the pro­ject – Non­pay­ment of com­mon ex­penses caus­ing units/projects to get run­down – hence empty pools, gar­dens with weeds etc.

Check the phys­i­cal state of the build­ing and as­cer­tain from the man­age­ment com­mit­tee any long out­stand­ing prob­lems (based on our ex­pe­ri­ence the non-pay­ment of com­mon ex­penses is a “curse” we say). Do not com­pare your own par­tic­u­lar coun­try reg­u­la­tions to the ones in Cyprus.

Check who the neigh­bours are, in the sense that if you want a quiet life, don’t buy the prop­erty where the next-door neigh­bour lets out.

Check what are the com­mon charges, the prop­erty tax etc p.a. so that you know (not much but an in­dica­tive fig­ure is rec­om­mended) – Some projects have charges of over EUR 1,000 p.a. re­fer­ring mainly to the re­cent high-end prop­er­ties.

We hope that we are now all wiser and that the mis­takes of the past will not be re­peated – or at least will be re­duced in num­bers, up­grad­ing the stan­dard of real es­tate in Cyprus and en­cour­ag­ing the mar­ket fur­ther. any (by

Antonis Loizou F.R.I.C.S. is the Direc­tor of Antonis Loizou & As­so­ci­ates Ltd., Real Es­tate & Projects De­vel­op­ment Man­agers

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