Two types of property division in Cyprus: Vertical and Horizontal Property Division
The process of Vertical and horizontal division of the Property.
In Cyprus, there exist properties that do not belong only to one person, but to a group of people. The biggest factor is inherited wealth. A parent who has property frequently divides it equally among their children. Yet, dual ownership causes a number of issues and restricts the property’s future potential. If no owner is ready to sell their part to another co-owner, the only way for them to get complete ownership of their share is through vertical and/or horizontal split.
Investment purposes often involve purchasing a piece of land, developing it, and dividing it into individual units for sale. This approach can be lucrative for investors looking to make a profit through real estate development.
Property Vertical division in Cyprus
Vertical division refers to the separation of land and buildings on it into two or more new pieces, creating independent residences. This process grants the property owner a separate title for their portion of the land and any building on it. Examples include:
- agricultural land division,
- land division into lots
- and dividing an existing property into two halves
Vertical division creates more opportunities for independent home ownership and efficient use of land.
Division of a Field and conversion into Plots
When it comes to real estate, knowing the difference between a field and a plot can make a big difference. Fields are pieces of land that are typically cheaper than plots, but their building factor is much lower, usually ranging from 3%-10% of their total square meters. If you’re looking to invest in property, it’s important to understand the difference between these two types of land.
In real estate, a “plot” is a piece of land with significant building potential, boasting an impressive 90% building factor. But in order to meet this designation, a plot must also have essential amenities in place, such as electricity and water supply connections, as well as sidewalks surrounding it. Discover why these factors are crucial for unlocking a plot’s true economic potential!
Land parceling, or the process of subdividing a plot of land, is a necessary step in developing a piece of property, even if it is located in a residential zone. Without parceling, the land cannot be developed. This process involves giving up a portion of the land for public use, such as for road networks or public green spaces, which is often required by local building codes. Also there is a requirement to build a sidewalk with your own expenses.
The amount of land that must be ceded to the public can range from 30-35%, and this requirement is often included as a condition in the building permit. With new legislation in place, even a single plot of land must undergo parceling before it can be developed.
Dividing a Plot to 2-half plots
In Cyprus, it is possible to subdivide a larger plot of land into smaller ones, with 250 square meters considered a half-plot and 500 square meters a full plot. This can be an advantageous option for landowners, as it allows them for Example to split a 1500 square meter plot into either 3 full plots or 6 half-plots.
Vertical Division of Buildings
The financial constraints of most citizens do not allow them to own a whole plot of land. For this reason, the Building Department and the Land Registry allow the subdivision of an existing plot with Buildings, into halfs.
This process is approved based on article 29(8) of the Property Registration Law. The director of the Land Registry is responsible for approving the subdivision. In order to be approved, the building must have received a final approval certificate. Each owner has the right to use this right once in their lifetime.
For Example: Two individuals decide to buy a plot of 250 square meters together (50% each). They buy the plot as Co-owners, and then they build two houses inside the plot. After that, the Co-owners wish to issue a independent title deed for their houses. This is the case of Vertical Division of the Plot. So each Owner will have 125 square meters of plot and a title deed for the house.
Horizontal property division
Horizontal property division refers to the separation of buildings but not land. Property owners acquire ownership title for their unit, which is referred to as a “unit,” and a corresponding share of the common property, which is the unified plot. As a result, even though you are the exclusive owner of your residential unit, you are a co-owner of the land with the other owners. This creates several developmental restrictions and other issues.
To reduce these issues and better determine the property rights of each owner, we first should determine the following:
- How any unused building coefficient will be allocated.
- Who will be responsible for the common areas.
- Who will own the private spaces.
- In which areas there will be individual usage rights.
- How parking spaces for each unit will be satisfied for maximum autonomy.
The type of property division applied to a property greatly affects the property rights and should be carefully considered by potential buyers.
This is the classic example of a two or three floor house and each floor belongs to a different person.
Co-ownership of property is Dangerous
If a property is not separated, then any building located on the property is considered by law to belong equally to all the owners of the plot. This means that if one owner has built two apartments on a property while the other owner has one apartment, until these apartments are separated, either vertically or horizontally, the two owners have a share of one half in all three apartments.
In some cases, disagreements and misunderstandings between co-owners can prevent the division of property. This can sometimes be intentional, as some co-owners may want to claim rights to property they did not pay for themselves.
Fortunately, there are now processes that allow for the unilateral submission of applications for building construction or conversion under Article 90, as well as for unilateral applications for division under Article 91.
This means that interested property owners can request division without the signatures of their co-owners. However, co-owners can file an objection if they believe their rights are being affected. The responsible authority should work towards a solution that separates the property in any way possible, as delays can impact the property’s utilization, development, sale, or lease.
Property distribution agreement in Cyprus
A Property Distribution Agreement can serve as a stopgap measure until a property is formally separated. It’s a legal contract that can be submitted to the land registry and establishes shared ownership between property owners of land and buildings.
This agreement provides mutual recognition of who owns specific portions of the property, even if vertical or horizontal separation is still in progress.
Using a distribution agreement can offer legal protection while navigating the licensing process. It’s particularly useful for situations involving residential plots that can’t be divided by local authorities and for buyers who haven’t received a property title yet.
AVZ Law Office Cyprus
Contact our Law Office for efficient handling of the necessary procedures to divide your property and protect your ownership rights. We offer a wide range of services to help you through the process, including:
- Advising on efficient ways to protect your ownership rights
- Handling the vertical and horizontal property division process
- Drafting property distribution agreements
- Setting the boundaries of each plot
- Converting fields into plots
- Parceling plots into smaller plots
- Assisting with acquiring building licenses
- Obtaining final approvals
- Providing property administration services
Don’t navigate the property division process alone. Contact us today for expert assistance.