There are a lot of possible dangers when purchasing property in Cyprus. The British High Commission encourages potential buyers to proceed with caution when buying a property if the title deeds are not readily available, as this indicates that your property may be in jeopardy.
Liability for a mortgage
Taking out mortgages on land or property is a typical practice among developers. If you sign a contract with a developer and the property already has a mortgage, loan, or claim on it, you may be liable for that mortgage if the builder, developer, or landowner goes bankrupt.
You should have a Land Search Certificate received from the Land Registry checked by your lawyer to see whether there are any mortgages on the property. It should be emphasized that obtaining a Land Search Certificate necessitates obtaining permission from the property owner. It’s doubtful that you’ll get the deeds in your name until the mortgage is paid off if you’re made aware of a mortgage before signing a contract.
Lawyers are not required to automatically check for mortgages, but good lawyers should do so as a matter of course. Although the Republic of Cyprus Government enacted a Specific Performance Law in 2011 to give a contract of sale priority over any pre-existing mortgage, we nonetheless strongly advise you to check for mortgages on the land prior to purchase to guarantee you do not run into any problems later.
Other difficulties that British nationals frequently highlight include:
- As a result, lawyers who represent both suppliers and builders are not truly impartial.
- Work is being done on a building without the proper planning approval or building permit (eg electricity or water)
- Currency and interest rate fluctuations have an impact on mortgages.
- Payment plans or additional expenses not specified in the original contract
- Certificates of complete completion are difficult to come by (deeds cannot be issued without this)
- Acquiring title deeds is challenging
- getting remedies once flaws have been discovered
We strongly advise you to get independent legal advice before making any property acquisition.
If you have purchased a property or land and are having problems, you should seek skilled independent legal counsel about your rights and remedies.
To see if a corporation or legal advisor is a member of the Association of International Property Professionals, go to their website.
Buying a property in Northern Cyprus
Many properties in the north of Cyprus are disputed, with thousands of claims to ownership from residents who were displaced in 1974. The purchase of these assets may have significant financial and legal consequences. In a number of judgments, the European Court of Human Rights has held that owners of property in northern Cyprus before to 1974 are still considered the legal proprietors of that property.
Purchasers may face legal action in the Republic of Cyprus’ courts, as well as attempts to enforce decisions from these courts in other EU countries, including the United Kingdom. There has been at least one successful litigation in the UK to enforce judgements, putting property owned in the UK at risk.
Both groups’ leaders are currently in talks to try to resolve the Cyprus problem. Property and the handling of pre-1974 Greek Cypriot title-owned property is a major issue. Property owners and potential buyers should also keep in mind that a future resolution of the Cyprus issue could have major implications for the property they buy, including possible repatriation of the property to its original owner as well as compensation payments. Prospective buyers should think about the following implications of any potential land/property settlement:
Prior to 1974, a Greek Cypriot individual held land/property in the north of Cyprus, which the Turkish Cypriot “authorities” classed as exchange or “gift” land/property.
Purchasers should be completely informed of the restrictions governing foreigners purchasing property in the north of Cyprus, including the obligation to seek consent to the transfer of property. Even if you are purchasing land with a Turkish title prior to 1974, you may be denied permission to purchase the land/property with no explanation.
On October 20, 2006, a property-related change to the Republic of Cyprus criminal code went into force. The amendment makes it illegal to purchase, sell, buying, promote, or mortgage a property without the authorization of the owner (the person whose ownership is registered with the Republic of Cyprus Land Registry, including Greek Cypriots displaced from northern Cyprus in 1974). The maximum sentence is seven years in prison.
The modification to the statute also stipulates that attempting to carry out such a transaction is a criminal offense punishable by up to 5 years in jail. Because this law is not retroactive, it will not apply to transactions that occurred before to October 20, 2006.
Also, while crossing the Green Line, documentation linked to the acquisition of property in the north of Cyprus will be assumed by the Cypriot authorities to be related to the illegal transfer of Greek Cypriot property and may be confiscated. Anyone found in possession of these papers may be required to provide a statement to Cypriot authorities and may face criminal charges under the amendment passed on October 20.
Any questions about the law’s scope should be sent to the Republic of Cyprus High Commission in London or the Republic of Cyprus Ministry of Foreign Affairs:
Property acquired prior to 1974
Please contact the British High Commission via email, designating your communication to the attention of the Property Officer, if you are a British national who owned a property in the north of Cyprus before 1974 (or the heir of someone who meets those conditions). They’ll be able to look over your file and provide you advice on how to proceed if you want to try to retrieve your property.
Dual nationals in the country of their other nationality are unable to receive assistance from the British High Commission. If you are a dual British/Cypriot national, you should contact your local authorities to file a claim for title deeds from before 1974.
Buying land or property in the Sovereign Base Areas (SBAs)
Persons considering purchasing immovable property (such as land) in the SBAs should be aware that section 3 of the Immovable Property Acquisition (Control) Ordinance 1972 requires the consent of the Administrator of the Sovereign Base Areas for a non-Cypriot or a non-Cypriot corporation to purchase immovable property in the SBAs.
Whether the property is now owned by a Cypriot or a Cypriot corporation, or by a non-Cypriot who has previously acquired consent, consent is required. The acquisition and registration of the immovable property in question are null and void if the Administrator’s consent is not obtained. Only in extraordinary instances will the Administrator grant permission.
It’s also worth noting that it’s illegal for those who aren’t “recognised residents” to stay in the SBAs for more than 28 days in a 12-month period unless they get a permit issued under the Ordinance. You can apply for a certificate of recognized residency or a permission once again, but the Administration will only approve these in exceptional circumstances.