I'm looking for an appartment to buy with a relatively small budget. I saw a very beautiful appartment in a very nice part of town built in 1995 and it was well within my budget. I turned it down because there are no title deeds available. I'm sure I done the right thing here, but the agent got a little upset when I told him the reasons I was not going to make an offer, a little put out.
Is this the normal thing in Cyprus? I'm a first time buyer so a little naive...well alot naive when it comes to buying property. Do many properties go on sale without title deeds?
Title Deeds
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Title Deeds
by Hazza » Thu Dec 29, 2005 12:43 am
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Hazza - Regular Contributor
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by Svetlana » Thu Dec 29, 2005 9:44 am
Hi Hazza
Although property law here is based on UK property law, the major difference is Title Deeds. Generally, these are not available until 5 years after the development is completed, sometimes much longer. Let me explain.
The Developer would have had a TD for the land on which the development was built; only when the last property on the development has been completed, can the Mubicipality be invited to inspect the properties. They are in no hurry so there may be a 2 or 3 year delay before this happens. When they are satisfied that the properties have been built in accordance with the Planning Permission and Building Permit, they issue a Certificate of Compliance to the developer. When he chooses, he then applies to the Land Registry to issue individual TD by sub dividing the original plot; it can be several years before they get round to this of course.
If any person on the development has made changes to their property before the Certficate of Compliance has been issued, then it will not be and you would have to wait indefinitely for the TD. (The Governmnet has recently introduced an amnesty to overcome this).
The only risk of not having the TD is if the developer goes bancrupt and a bank forcloses; the development would be regarded as an assett of the developer.
I would say 80% of properties bought by Europeans have no TD. The risk is very small.
It is more expensive/difficult to get a mortgage on a property without TD, but most foreigners buying holiday or retirement homes dont need mortgages.
But I hope your solicitor would have told you all this....
Lana
Although property law here is based on UK property law, the major difference is Title Deeds. Generally, these are not available until 5 years after the development is completed, sometimes much longer. Let me explain.
The Developer would have had a TD for the land on which the development was built; only when the last property on the development has been completed, can the Mubicipality be invited to inspect the properties. They are in no hurry so there may be a 2 or 3 year delay before this happens. When they are satisfied that the properties have been built in accordance with the Planning Permission and Building Permit, they issue a Certificate of Compliance to the developer. When he chooses, he then applies to the Land Registry to issue individual TD by sub dividing the original plot; it can be several years before they get round to this of course.
If any person on the development has made changes to their property before the Certficate of Compliance has been issued, then it will not be and you would have to wait indefinitely for the TD. (The Governmnet has recently introduced an amnesty to overcome this).
The only risk of not having the TD is if the developer goes bancrupt and a bank forcloses; the development would be regarded as an assett of the developer.
I would say 80% of properties bought by Europeans have no TD. The risk is very small.
It is more expensive/difficult to get a mortgage on a property without TD, but most foreigners buying holiday or retirement homes dont need mortgages.
But I hope your solicitor would have told you all this....
Lana
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by devil » Thu Dec 29, 2005 9:49 am
A ten-year wait for title deeds is not unusual. I don't have them after 8 years, although there was initially a cadastral dispute which was resolved years ago. There are many inefficient government departments, but the Land Registry is probably the worst of the lot.
I don't know how a transfer of ownership is achieved before the deeds are issued. You probably have to start the procedure again and wait another 10 years
For the numerous things that need to be done accompanied by the deeds (e.g., applications for electricity, phone, immigration etc.), the various authorities are aware of the situation and accept a copy of the contract of sale in lieu of the deeds.
I don't know how a transfer of ownership is achieved before the deeds are issued. You probably have to start the procedure again and wait another 10 years
For the numerous things that need to be done accompanied by the deeds (e.g., applications for electricity, phone, immigration etc.), the various authorities are aware of the situation and accept a copy of the contract of sale in lieu of the deeds.
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by Svetlana » Thu Dec 29, 2005 11:23 am
Hi Devil
There is no problem selling property without TD. Basically, you cancel your Contract with the developer and the Buyer takes it on; their name then replaces yours at Land Registry.
The advantage is that you may avoid paying Property Transfer Tax and your Buyer will not have to pay it until Deeds become available. The disadvantage is that, instead of PTT, the Developer may choose to charge you a Cancellation Fee, sometimes up to 5%.
Lana
There is no problem selling property without TD. Basically, you cancel your Contract with the developer and the Buyer takes it on; their name then replaces yours at Land Registry.
The advantage is that you may avoid paying Property Transfer Tax and your Buyer will not have to pay it until Deeds become available. The disadvantage is that, instead of PTT, the Developer may choose to charge you a Cancellation Fee, sometimes up to 5%.
Lana
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by pg » Thu Dec 29, 2005 12:28 pm
Svetlana wrote:Hi Hazza
The only risk of not having the TD is if the developer goes bancrupt and a bank forcloses; the development would be regarded as an assett of the developer.
I would say 80% of properties bought by Europeans have no TD. The risk is very small.
In general you can overcome this by having the developer issue a bank guarantee for the property - which runs until you get the TD. If the developer goes bust you would at least get the money back...
Note though that getting the guarantee is a cost for the developer, which he one way or another will charge you for...
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by Svetlana » Thu Dec 29, 2005 2:12 pm
Unfortunately, if you are buying a 'resale' like Hazza, the developer will not usually provide a Bank Guarantee; they are expensive too, normally 1.8% of the amount of mortgae outstand, annually!
Lana
Lana
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