Real Estate purchase agreement in Cyprus

To ensure a smooth transaction when buying or selling property, it’s crucial to have an experienced lawyer overseeing the process. The best way to ensure your property rights is through a Sale and Purchase Contract.  On April 2, 2021, the House of Representatives passed a bill that modified the Advocates Law, Cap 2, stating that only licensed lawyers can provide legal advice and prepare agreements related to real estate transactions. At our firm, we offer legal services and advice to guide clients through their rights and responsibilities when buying or selling property. Contact us today for expert assistance.

Why you need the Sales and Purchase of Real Estate Agreement:

• Ensure your ownership rights over the Property
• Prohibit the Owner from transferring the Property to a third party

Due Diligence

Before purchasing a property, it is important to conduct due diligence to avoid any unexpected surprises. This process involves investigating:

• Examining the property’s title deed
• Determining if there are any mortgages or encumbrances on it, including MEMOs and previous sale agreements
• Any outstanding expenses must be paid
• The property is the subject of a legal dispute
• There are more than one owner (the seller does not have absolute ownership of the property)
• It is not landlocked and there is regular access to the property
• If necessary permits (town planning, construction) can be issued for the construction of a house or other project within the property
• Any other characteristic of the property may affect its market value.

Mortgaged Property: Am I in trouble?

The property being sold is usually mortgaged. Before, in order for the property to be transferred to the buyer, the seller would have to pay out the mortgage obligation to the lender in order for the mortgage to be cancelled. Due to the mortgage, the buyer could not use his right of particular performance if the seller failed to meet his duties to the lender unless he paid off the mortgage debt himself.

When the subject of the sale is mortgaged, the buyer can pay the amount due each time, depending on the Sales Contract, to the mortgagor directly, i.e. to the Financial Institution, rather than to the seller, under the new Legislation.

When the buyer settles the portion of the mortgage obligation that is related to the property he has acquired, the Court might issue a Writ of Special Execution, directing that the property be registered in the buyer’s name, free of the mortgage burden. The buyer’s share of the mortgage debt is defined by the coefficient of value of each property in proportion to the total value of all mortgaged property.

If the property is mortgaged, the buyer should request that the seller notify him of the value coefficient of the property under consideration, so that he understands the portion of the mortgage obligation that corresponds to the property he will purchase.

The buyer may pay the sum straight to the mortgagee rather than the seller, and the mortgagee is required to collect it. If he pays it and the seller refuses or is unable to complete the transfer, the buyer has the right to petition the Court for the issuing of a Decree of Special Execution and to be registered as the owner, regardless of the presence of the mortgage and free of it.

Is my deposit for the Property guaranteed?

The sum paid by the buyer is guaranteed under the new Law in the event that the fulfillment of the Contract is impossible, either due to the seller’s incapacity to release the object of sale from Encumbrances, or due to the sale of the property for other reasons. A comparable assurance is granted if the Court issues a judgment for damages instead of an order of special execution. The sum is secured in each of these circumstances in the order of precedence of the Encumbrance generated by the deposit of the Contract of Sale.

Assignment of rights and obligations deriving from the Sales Contract

With the introduction of the principle of assignment in the new Law, it is now possible to file a Contract of Assignment under which the buyer (assignor), who has deposited his Contract of Sale in the Land Registry, may grant (assign) his rights to a third party (the transferee), either for free or in exchange.

Real Estate Lawyers in Cyprus – Services

• Draft and/or Review Sales and Purchase Agreement
• Conduct Due Diligence for your Property
• Provide legal advice about the property, structure factors, licenses, permits, architectural plans
• Negotiate terms of Contract, price, deadlines etc
• Find and negotiate with contractors
• Find the appropriate property that suits your needs