Thread Status:
Not open for further replies.

Anybody Buying off-plan in Cyprus - Beware!

Discussion in 'Cyprus Property' started by Janoulaki, Nov 6, 2007.

  1. Janoulaki

    Janoulaki New Member

    I know it is a long advice, but whoever has got a chance to get a contract right, please do so!!!!

    Contract of Sale for Buying Off-Plan



    One of the most important factors to take into consideration when buying a property in
    Cyprus is to ensure that your contract of sale protects YOU rather than just the developer. In
    Cyprus, you have thousands of developers; some are good and some are not so good but
    even the good ones sometimes don’t fulfil their obligations, for a variety of reason. The main
    safeguard you have is the contract of sale.
    I have seen a lot of lawyers and realised most of them draw a contract of sale which is in
    favour of the developers. The reason behind it is obvious: by safeguarding the developers,
    the lawyers will be assured of generating more business. What I am going to point out are
    many buyers’ errors and I want you to learn from their mistakes so if something goes wrong
    you are protected if the developers doesn’t fulfil their side of the deal.
    Most of the lawyers in Cyprus are extremely busy and they use quite a lot of jargon to make
    you feel that they know everything and you don’t know anything.
    If your contract of sale does not include the following points, ask your lawyer to make the
    necessary changes and if he or she does not want to, I suggest that you change your lawyer.
    1. How to release the money
    Most of the payments are due by stage payment. Usually you pay a reservation fee
    of around 2,000CP (€3,420) to take the property off the market and then 30 days
    later you’ll need to pay a deposit of 20% - 30% minus the reservation fee.
    This 30% corresponds to the value of the land and then throughout the construction
    you pay by stage payment.
    A typical example would be:
    - 20% Deposit
    - 20% on completion of the concrete frame
    - 20% on completion of the brickwork
    - 20% on completion of the electrical installation, plastering, flooring and
    carpentry work
    - 20% on delivery
    You’ll want to holdback 1,000CP (€1,710) on transfer of title deeds, but I’ll discuss
    that later.
    On your contract of sale, you need to have a clause saying that the money will be
    released only if a civil engineer has confirmed that the phase has been
    completed properly.
    By the same token, if you have paid a small deposit with the rest due on completion
    the work has to be check by a Civil Engineer before you release the money.
    You ONLY have to pay the developer when you know that they have done their job
    properly and the only way to be sure of that is to appoint a civil Engineer who will
    check on your behalf.
    Do make sure that this is clearly stipulated in your contract
    2. Protection against late delivery:
    On the Sale Agreement, the developer has a period of grace for 1 month. After that,
    you’ll want to ensure that there is a penalty charge, which MUST be specified in the
    contract.
    Make sure you are happy about the amount that you will receive per month for
    compensation. If you have planned to relocate for instance it will need to cover the
    cost of alternative accommodation …
    If you buy an apartment, ‘completion’ means that your flat must be in a liveable
    condition but it also includes completion of communal facilities such as the swimming
    pool and landscaping of the gardens.
    Also make sure that you don’t have a clause that stipulates that you, the purchaser,
    may NOT hold back any portion of the total purchase price, so if the developer is late
    you have the freedom to withhold payment.
    For example, you could state in the contract that if the developer is 3 months late on
    the completion date, they are obliged to pay you 30 CY£ (€51.30) per day as a
    penalty charge. This means a total of 1,800 CY£ (€3,078) which you may deduct on
    the last payment, allowing for the 1 month period of grace.
    Also within this particular clause, you’ll want to stipulate that you can sue the
    developer for compensation if they are making you wait too long.
    3. Protection against no-approval from the land registry:
    After you have bought your property, the developer has to make a deposition of your
    agreement to the Land Registry for approval. If it is NOT accepted you need a
    clause in the contract to state that the developer needs to repay any amount
    previously paid by you IMMEDIATELY.
    4. Guarantee:
    You need to ensure that your contract has a 1 year guarantee for the
    installations and area which directly affect the normal and proper functioning
    occupation. More than 1 year would be better but developers will usually not
    guarantee that. You’ll also want to stipulate a 10 year guarantee on the structure.
    5. Freedom to sell any time:
    Your contract needs to state that you can sell the property any time after signing the
    sale contract, without penalty. This allows you to sell prior to completion. If you’re
    buying property to sell for a profit, this allows investors the ability to sell before the
    final payment is due. It is also helpful to have this freedom in the event that your
    circumstances change.
    6. Stipulation of the date of the delivery:
    In your contract, you want to specify a date when you will get the title deed. Here I
    suggest no more than 4 years, and if it does not happen you want to have an option
    to get your money back with interest of no less than 9%.
    Also the sale agreement should stipulate that you are going to hold back 1,000 CP£’s
    (€1,710) which will be released when you will get your title deeds. This is KEY – byholding back 1,000 CP£’s (€1,710) you’re preventing the developer from
    disappearing on you, never to be seen again!
    7. Protection in case the developer cannot get the planning and building
    permission:

    If for any reason the developers are not able to obtain the planning and building
    permit you MUST ensure that you have the option to terminate the agreement. In
    such an event the developer will be obliged to return any amount received
    immediately with interest (around 9%) back to the purchasers.
    8. Insured during the construction:
    You MUST make sure that your contract states that as long as the building is under
    construction the developer will insure the said property against fire, earthquake and
    any foreseeable risk. The developer will bear this cost and the insurance will be in
    effect until the day, the developer will deliver the property to the purchasers.

    For full Cyprus Buying Guide visit:

    Untitled Document

    or
    send me an email

    Good luck!
     
  2. grumpy001

    grumpy001 New Member

    AND, most importantly, this information is available for free on the internet and various formums without paying money, so its worth checking yourself.
    But the above was good and informative.
     
  3. Janoulaki

    Janoulaki New Member

    You are right and therefore I put it here for free,
    but there might be people who would like to read a guide and wouldn't mind paying very little for information which is put together

    Not everybody has got a time alongside work to sit hours online to research, some people might work hard enough to be tired enough to do the research and rather read a guide (book) in their bed or in sofa comfortably with strong information.

    The charge is not to earn money the charge is for printing the guide (hard copy)

    I am happy to help anybody even for free!!!!!

    That is why I do post on the forum
     
  4. grumpy001

    grumpy001 New Member

    Absolutely Janoulaki, I accept that, and much of the information I have seen is good and informative (in my opinion), however ONE guide only gives the reader One perspective and interpretation, so I would advise prospects to research further from several sources.
     
  5. Janoulaki

    Janoulaki New Member

    Our guide is not the agents guide, we are not selling properties and Cyprus Buying guide is not about any specific developments and doesn't answer the reader's question type:

    Do I need solicitor?
    "yes and we will provide you one!" These are type of answers that nobody should even continue reading

    And this is what in our guide isn't

    Clear answers and information

    Will send you one
     
  6. grumpy001

    grumpy001 New Member

    Janoulaki, Many thanks I accept your offer, I dont mean to offend, and am not accusing you of being a developer (theres nothing wrong with being a developer, ahent reseller etc etc, as long as truth is used) or anything else. What I am saying is the info I have read is accurate and helpful, however people should take information from more that one source, be it free, paid for, donated or personal experience.

    It would be an ideal situation if a good solid guide were supported by the Cyprus government or EU, therefore holding weight with accuracy that can be used to support a potential court case.
     
  7. Janoulaki

    Janoulaki New Member

    It is very difficult in Cyprus

    might happen later in a few years but not soon

    :)

    World is not ideal and therefore people who want to purchase safely should raise the hand and say yes I want to know before I lose.

    Unfortunately this is not happening and people love bargain prices love the fakeness of the agent, love the hard sale, well ....

    :)
     
  8. grumpy001

    grumpy001 New Member

    I agree, I like nothing less than seeing planes full of victims (sorry customers) who are taken in by these Prison Trips and end up buying a wholly inappropriate property in the wrong place at the wrong time and over budget.
     
    Last edited: Nov 23, 2007
  9. grumpy001

    grumpy001 New Member

    Hi Jana,
    I have not forgotten you, I am making my way through your guide, slowly but surely and would tend to suggest that the bulk of the information is accurate and helpful, but I will continue and give you final opinion later,
    thanks
     
  10. medseA

    medseA http://www.turkish-property-world.com

    we've heard those horrible rumours in Turkey... gees
     
Loading...
Thread Status:
Not open for further replies.

Share This Page