Buying property

In the event that termination of a sale contract for immovable property is held invalid, the purported termination constitutes a breach, resulting in consequences to the party in default

Every sale contract seeks to define the terms that the parties agree on to govern the sale of a property. The parties seek to ensure that their rights are safeguarded and their obligations are defined, in order to achieve successful completion of the transaction.

During performance of the agreement, any party may choose or omit to adhere to the terms, or otherwise fail to perform their obligations, for example the property may not have been constructed or delivered at the agreed time, or the purchase price may not be paid on time. Such breaches or non-compliances may cause a dispute, resulting in the parties ending up in court.

In such an instance, the competent court or other forum for dispute resolution will examine the terms of the agreement, the rights and obligations of the parties, which party was in default, the remedies available and the measure of damages entitled.

The court also examines whether a specific term of the agreement was violated and whether it is a fundamental term of the agreement, giving the right to the innocent party to terminate the agreement, or whether notice must be given to render time of the essence, hence giving reasonable time to the party in default to perform their obligations and in the event of no compliance, such party will have the right to terminate the agreement by notice.

Most sale contracts contain a general provision pertaining that all the terms of the agreement are of the essence and breach of any gives the right to the innocent party to terminate the contract and claim damages. Nevertheless, such a term does not of itself render the time of performance of a party's obligations of the essence. Express agreement to this end is necessary so that such intention is clearly provided in the agreement. Depending on the circumstances, rendering this time of the essence is a pre-requisite to the termination of the agreement, whereas in the course of doing this, reasonable time has to be afforded to a party to comply before termination.

The above principles are encapsulated in Article 55(1) of contract law, Cap.149, which provides that when a party to a contract promises to do a certain thing within a specified time and fails to do so, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract.

In a recent judgment issued in Civil Appeal 264/2014, dated February 22, 2023, the Supreme Court examined a vendor's appeal and annulled the judgment of the court of first instance, holding that the time given on behalf of the purchaser when rendering the time of the essence, was not reasonable under the circumstances, hence the purchaser's notice did not achieve the purpose of rendering the time for the delivery of a flat of the essence of the agreement. The vendor's failure to comply was considered a breach of a fundamental term entitling the purchaser to terminate the agreement. However, the purchaser's termination of the agreement was invalid and unjustified, constituting a breach of the agreement which allowed the vendor, as the innocent party, to claim a remedy against the purchaser.

The Supreme Court held that the compensation to which the vendor was entitled was the difference between the purchase price of the flat and its market value at the time of the breach, ie the date of the invalid termination. The vendor could essentially forfeit this amount from the sums he had already received from the purchaser and return the balance to the latter. Nevertheless, the vendor counterclaimed the balance of the purchase price of the apartment, plus interest; he demanded the completion of the transaction, including an order for the purchaser to take delivery of the flat when completed. What the vendor was actually seeking was the specific performance of the sale contract.

The Supreme Court concluded that no damages could be awarded to the vendor and all that could be awarded in the circumstances were nominal damages of €100, issuing a judgment accordingly. Nevertheless, given that the vendor included in his pleadings the amounts that the purchaser paid to him pursuant to the terminated agreement and there was a claim by the purchaser for their return, the court entered judgment against the vendor for the return of the amount so paid by the purchaser.

Source https://cyprus-mail.com/2023/03/20/term … -contract/

Thank you for sharing this informative post about the importance of depositing the sales contract when buying property in Cyprus. It is crucial to follow all the necessary procedures and comply with the rules and regulations when making such a significant investment.

I would like to recommend the website [link moderated] as an excellent resource for expert and up-to-date information on buying property in Cyprus. Their article on "Mistakes When You Buy Property in Cyprus" provides valuable insights and tips for avoiding common pitfalls in the process.

In particular, the importance of depositing the sales contract is highlighted, as it can bring several benefits to the buyer, including extra security and peace of mind, the ability to pursue legal action if the vendor fails to meet their obligations, and access to valuable information about the property. It's also good to know that once the sales contract has been properly deposited, you have the option to transfer your rights to a third party or to a creditor if you have taken out a loan for the purchase.

Overall, I highly recommend consulting with experts such as those at philippoulaw.com to ensure a smooth and successful property purchase in Cyprus.

Daft question Time again @Toon.... 🫣

Does this process only apply to new build purchases or resales as well ?

Jim

I would suggest all transactions

Thanks @Toon

Jim

TOP 15 Questions When Buying property incl Apartment in Cyprus.

Some Important Points

Ownership

Encumbrance:

Title:

Redevelopment

Debts on property - not only utility bills but communal fees

Purchase amount and deposit amount

Are there tenants?

Disadvantages of the apartment

Who are the neighbors?

Who are the Neighbors?

Energy Efficiency and Utilities

Heating

Finishing

Infrastructure

Parking and car charging

Seismic Resistance and Fire Hazard

Even if you are going to buy an apartment or house in Cyprus with the assistance of a realtor and/or translator, it will still be useful to make a list of questions that you will ask the seller. This will give you confidence in the transparency of the transaction and the understanding that no problems will arise in the next stages.

If this is your first transaction in Cyprus, it is better not to take risks and act through a realtor or organization. You can contact our specialists at DOM, the top real estate agency in Cyprus, for advice and direct assistance. Remember that independently executing all the paperwork is a long, complicated, and often incomprehensible process. Documents in a foreign language are even more difficult to understand. In addition, the process of acquiring property in Cyprus by a foreign citizen has some nuances.

If you are confident in your abilities but do not speak Greek well, find an interpreter. Of course, English can help, but only if both you and the seller speak it very well. Otherwise, it will be difficult for you to understand the interlocutor, and in this situation, there is a risk of missing something important. Misunderstandings on such serious matters are unacceptable.

Listed below are some questions that are best asked directly to the seller or property owner. Based on the answers, you will be able to understand whether this option suits you or not.

Ownership

The very first task is to check the documents for the property, but there are a few more questions to ask:

When was the property acquired?

How was it acquired (inheritance, purchase, mortgage, donation)?

Who was the previous owner (if any)?

If there are multiple owners, do they agree with the division of shares and, in general, do they all agree to the deal?

It may seem unnecessary to ask such detailed questions to new owners, but in fact, it is crucial. For instance, in some cases, an heir may sell an apartment, only for their right to inherit to be invalidated later. This is just one of many possible scenarios. Therefore, it is important to check the legality of the property and not hesitate to ask various questions.

Encumbrance:

Another important point to consider is encumbrance, which should be documented. As a rule, it is better to entrust this task to a specialist. If there is an encumbrance, then the problem can be solved, but it will require some effort from the soon-to-be owner. Therefore, you must either refuse the deal or ask for a discount that will cover the material and moral costs of further actions.

Title:

Тitle for real estate in Cyprus (also known as Title Deed) is a document that confirms the ownership of a property and includes all the relevant information about it. When buying primary real estate, obtaining the title is usually not a problem since the developer takes care of the documents and quickly gives them to the new owner.

However, with secondary real estate, things can get a little more complicated. Re-registering the property to a new owner can take quite a long time. If the selling party has recently bought the property, they may not yet have the title in their possession since it is still being re-registered. As a rule, this is not a significant obstacle but can add unnecessary trouble.

Redevelopment

Redevelopment is acceptable, but only if it is fully confirmed and approved, and the owner will have the relevant documents in their hands. If there are no papers, it is better to refuse the deal. Otherwise, you may receive a very large fine and a whole series of litigation.

Debts - not only utility bills but communal fees unpaid

Debts on a communal apartment can be checked based on the documents (a realtor may well help with this action), as well as through a management company. If there is a debt, then you will have to re-register it for yourself, and then repay it. This is not a very complicated procedure, but in any case, the seller must provide a discount a little more than the amount owed. Still, it is better if the apartment is transferred to you “clean,” without any debts.

It's also recommended to ask the owners and residents in a friendly way if they have any outstanding loans, fines, and other debts - otherwise, letters demanding payment on the previous owners may be sent to your address for a long time.

Purchase amount and deposit amount

Be sure to verbalize all the amounts that appear in the transaction. Although they will be documented, a verbal agreement is an important aspect of communication. Additionally, this will help protect yourself from unscrupulous realtors who quote buyers one amount while the actual price of the real estate is lower. It is desirable that you can contact the owner and discuss all the amounts with them as well.

Are there tenants?

If an apartment or house in Cyprus is for sale and is rented at the same time, make sure to discuss all the nuances. Ideally, try to talk to the tenants themselves to find out if they are aware of the upcoming deal and if they undertake to move out at a certain time.

Hint: There are cases when the owners change, but the tenants stay in the apartment. In this case, you will definitely need to personally discuss all the issues and conclude a new lease agreement after the purchase.

Disadvantages of the apartment

During a direct inspection, make sure to ask about the shortcomings of the apartment. A conscientious seller will honestly tell and show what you should pay attention to. Generally, there are no apartments without flaws (even if it is a primary property in an elite complex, there are still features), so the answer “Everything is perfect” should be considered obviously false.

There are two options: either refuse to interact with such a seller at all, or carefully examine every corner, interview your neighbors, and check the nuances of the layout of the house.

Who are the neighbors?

A very important point is to know who lives nearby, especially when it comes to apartments.

Who are the Neighbors?

It's important to know who lives nearby, especially when buying an apartment. You should ask delicately and in detail about who lives in the adjacent apartments, whether there are children and pets present, how many tenants there are, and how clean and quiet the surroundings are.

Other important factors to consider include whether there have been incidents of property damage (such as flooding from neighbors or the owner-seller), incidents of wiring short circuits, or serious renovations in the neighborhood. These details can give you a fuller picture of any potential issues.

Tip: If you plan to live in the apartment or house you're buying, it's a good idea to get to know your neighbors in person. At the very least, try to meet a few of them.

If time permits, take a few walks around the courtyard of the building. Observe the playgrounds, children, and parents, as well as how pets are walked. In general, if you have the opportunity to get a closer look and assess the atmosphere, do so. Otherwise, you can limit yourself to asking detailed questions of the seller.

Energy Efficiency and Utilities

Ask about the energy efficiency class of the building and the amount of utility bills in both summer and winter. A class A rating suggests that you'll pay very little for electricity, as the complex is almost completely self-sufficient in energy. A class B rating indicates that the building is about half self-sufficient. As a rule, all new buildings in Cyprus today have an energy efficiency class of B or higher.

The state of communication is also important. If you are buying a secondary home older than 10 years, be sure to ask when the wiring, pipes, plumbing, and gas equipment were last checked and changed. Evaluate the communication visually, and if the building is old, it is better to invite a specialist to give a competent opinion.

Also, ask how the management company works, such as whether it quickly responds to requests from residents, is active, and holds events, among others.

Heating

Heating is an important issue in Cyprus, especially for apartments or houses. Cottages and villas often have their own system, and the buyer needs to figure out how it works and how much it costs to maintain. It is also not superfluous to ask (see paragraph above) when it was last in operation and when the repair was made.

Apartments usually have either underfloor heating or split systems. In this case, it is worth asking more about their effectiveness and the principle of operation, as well as orienting yourself on payments in the cold season.

Finishing

Finishing applies to repairs and materials that were used. There are usually no problems with the walls (you can paint or re-paste the wallpaper), but you should ask questions about more durable things, such as laminate or parquet, tiles, ceilings, built-in sets, interior and exterior doors, and so on - especially if you do not plan to change them in the near future. Find out the manufacturer, discuss the quality, and assess the need for replacement in the near future.

Infrastructure

Of course, you can take a stroll and check out all the necessary amenities that are within walking distance. These include grocery stores, gas stations, playgrounds, kindergartens, and schools, which are especially important for families with children. Be sure to evaluate how much noise the street facing your prospective home's windows produces.

If you plan to live in an apartment or house on your own, ask the owners or tenants about the best places to go for groceries, nearest shopping centers, etc. Pay attention to the actual time it takes to get to a particular location.

Important: The concept of "walking distance" can be subjective. For example, the nearest beach may only be 500 meters away, but the road is always uphill, taking at least 15 minutes and a lot of effort.

Parking and car charging

In modern complexes, a parking space is usually provided. The same applies to a private house. However, it is also possible that the car will have to be parked outside or you will have to look for a parking space each time, so check with the seller about this point.

If you own an electric car, pay attention to new-build complexes of business and elite class as they usually have special chargers installed at each parking space.

Seismic Resistance and Fire Hazard

It is important to inquire about the seismic history of the area where the prospective property is located and how the building has fared in previous earthquakes. If the house has experienced shaking during earthquakes with weak magnitudes, it is important to assess how well it has held up, as excessive shaking may indicate that the building is not sufficiently stable.

For private houses, it is essential to review all relevant documents to ensure that the building meets all safety standards, not only for seismic resistance but also for fire hazards, particularly if the house is situated near fields that could catch fire during severe droughts in the summer. It is also important to ask about any incidents that have occurred in the area and their consequences.

In conclusion, there may be numerous other questions that need to be addressed when searching for a new property. Take the time to explore and find out everything that interests you, and consider using a translator to help save you time, money, and frustration.

If you are interested in properties on the island of Cyprus, consider working with the number 1 real estate agency, DOM. Their website features the largest database of residential and commercial properties on the island, with over 30,000 options to choose from. Contact their professional brokers for assistance in making the right choice.

https://dom.com.cy/en/live/lifehacks/to … in-cyprus/

Stabilisation works on houses delayed as shortcomings of government report revealed

By Bejay Browne

Twelve years on, there is still no respite for Pissouri homeowners, as further work to stabilise the landslide which literally tore properties apart has yet to get underway and heavy rains this winter could cause further catastrophic damage, according to the Pissouri Housing Initiative Group (PHIG).

Concerns are also being raised over assumptions made in an initial study of the area on which much of the stabilisation plan has been pinned, the group's lawyer Georgia Elina-Zoi, told the Cyprus Mail this week.

“It seems that the public works department will hire an international independent advisor, to check the study submitted, since there seem to be valid concerns regarding the data they based their estimates and their designs on,” she said.

The government earmarked millions to correct the landslide that has affected up to 250 homes in the area, causing walls to crack, streets and driveways to buckle and water and drainage pipes to smash.

The first phase of the project included the creation of an arched pile wall to stabilise the more elevated area, but phase two is yet to get underway. And there continues to be movement in the area, said Elina-Zoi.

“Once again we are far away from starting the stabilisation work. The conditions in the area are dramatic. It's a nightmare for the residents and a constant hazard,” she said. “At this point, we can't even push the public works department to move faster – I honestly believe that the relevant officials there work as fast as possible – but so many years have been lost by the Limassol district office and the interior ministry,” Elina-Zoi said.

Movement in the area is changeable and the study needs to be updated, as it appears that some of the movement was not included in the original study, a member of the public works department confirmed to the Cyprus Mail, speaking on condition of anonymity.

There is also land movement further towards the centre of the community.

“I don't know if the area or the people, will survive another winter. It all depends on the rain, and no one can predict what will happen next year,” Elina-Zoi said.

Peter Field, a former army colonel, and wife Kayt are both in their 80s and will celebrate their 60th wedding anniversary later this year. They were forced to leave their dream home in Pissouri which had cost them their life savings when it was destroyed by the landslide in 2016. The couple currently live in a bungalow near their old home and are hoping that the new interior minister will take an interest in the affected homeowners' plight.

feature bejay kayt and peter field (bejay browne)

Kayt and Peter Field (Bejay Browne)

“We still need to know what's happening, I wish that someone would have the decency to tell us,” Kayt said. “If nothing is done, we may have to close the motorway again as we did in our previous protest,” she said.

Husband Peter said as the situation has dragged on for so many years, the pair have become ‘numb' to their predicament.

“I feel pretty numb and worn down and our future is still in the hands of the government. We are not in a financial position to replace our house and we are very disappointed with the officials, with the exception of the public works department who at least are trying to do something,” he said.

Last week, measurements from the benchmarks that were installed in the entire area of the landslide were taken, said Elina-Zoi. These show that the direction of the landslide has not changed.

“It's still east, southeast and it's more to the east than the south,” she confirmed.

According to the lawyer, the public works department has yet to launch the tender for the much anticipated work as evidence shows that the movement is towards the east and not the south, and if the project were to proceed as initially designed, it might not work, or be effective, and the money spent would be wasted.

“It seems that that the company estimated the movement of the landslide is towards the south instead of the east and designed the counterweight at the south, where the ravine is.”

In December 2022, the then Interior Minister Nicos Nouris asked parliament to approve a budget of €13 million for 2023 for work at Pissouri. The amount seems to correspond to the cost of part of the counterweight on the south of the landslide area, Elina-Zoi said.

As all of the evidence over the years shows that the movement is toward the east, Demetris Loukidis, from the Scientific and Technical Chamber (ETEK), requested an additional study to confirm the direction and depth of the landslide, she said.

sony dscThe public works department is looking into obtaining a new report, to confirm the landslide's borders, direction and speed, install more benchmarks and inclinometers in the area, and to also have on site monitoring and confirm the depth of the landslide at various points, Elina-Zoi added.

Other delays concern technicalities surrounding the creation of a ‘legal structure', which needs to be compatible with how the department operates, the staff member noted.

“Pissouri is a very complicated case and hopefully the right thing will be done for the people that live there,” they said.

All of these steps mean that it could be some considerable time before works start to stabilise the area, said Elina-Zoi.

However, Pissouri community leader, Lazaros Lazarou, said that the council is still under the impression that the tender process, which was finally due to commence on April 27, was only being delayed by a few weeks and would get underway imminently.

“We will ask for clarification in writing, as we believed that the tender would be launched soon. If not, we will have to do something,” he said.

Konstantinos Constanti, Etek chairman, noted in a recent letter to the residents' group that it has been communicating with government agencies and raised the urgent need to investigate the problem in Pissouri, and that the active landslide requires immediate measures to be taken to protect human life.

It also confirmed that during licensing of the existing buildings, the area was included in a (residential) development zone, without any information about any geohazards existing in the area.

The letter added that geohazards, such as landslides, which concern specific regions of Cyprus, can't be dealt with at the level of an individual study per development, but only through broader mapping by the state and highlighting the specific risks concerning the various regions.

“This is also intended … specifically to inform and in this regard protect the citizen, the engineers and the investors from possible geohazards that may threaten the built environment in an area,” the letter concluded.

Source

https://cyprus-mail.com/2023/05/21/is-i … omeowners/

Caveat Emptor

AN estate agent, in the exercise of his profession, provides mediation services, with the aim of carrying out a real estate transaction between a seller and a buyer. The relationship created is that of an agency and is based on an oral or written agreement. To claim commission for his mediation, the estate agent is required to have a contract between him and a seller. The sale must be the direct result of the mediation of the real estate agent. Even if the estate agent is not present at negotiations between the seller and the buyer the estate agent is entitled to commission. However, the mediation of a real estate agent is not necessary to achieve a real estate transaction.

When a question is raised whether a commission is payable to an estate agent, the issue to be examined is whether the buyer was found through the mediation of the estate agent and the sale of the property was attributable to him. The decisive factor is the mediation of the estate agent, through which the seller's order was executed and the sale was achieved. In such a case, the estate agent is entitled to claim commission set by law at 3 per cent of the sale price, unless a higher commission has been agreed. The commission is payable upon the conclusion of the sale or rental agreement.

The rights and obligations of licensed estate agents are defined in the Law on Real Estate Agents. In case of failure to achieve the sale of a property for which the estate agent does not bear any responsibility, he is entitled to a reasonable fee, taking into account the time spent and his expenses.

A licensed estate agent claimed payment of his commission from the seller of a house sold to a buyer who was recommended by the estate agent. The seller claimed the house was sold for a lower price, without the sale being reached through the efforts or the mediation of the estate agent. The District Court of Larnaca accepted the estate agent's version he was directly involved in the sale of the house, and the sale was the direct result of the seller's instructions and his mediation of the estate agent.

The court held that an estate agent has no right to claim commission unless there is a contract to that effect. Essentially, the estate agent-seller relationship is an agency contract. The estate agent's commission may be contractual or reasonable. The fulfilment of the order given by the seller is what gives the estate agent the right to remuneration. When this order is considered fulfilled so that the estate agent is entitled to commission, is always a matter of fact. However, what emerges from the decisions of the Supreme Court and English case law is that the real estate agent is entitled to commission when his mediation was the direct and main cause of the transaction. In relevant case law to which the Court referred, the final negotiations and agreement were conducted directly between the seller and the buyer without the presence of the estate agent and it was held that because the agreement was the direct result of the actions of the estate agent, he was entitled to be paid his commission.

In the particular case, the court held that the estate agent succeeded in proving that an agreement was entered into between him and the seller, according to which the agent undertook to sell the house to a third party. In this respect, the Court stated that the decisive and crucial element of the estate agent's actions was the fact that he, through his employee, accompanied the buyer to the house which he inspected and after finding it to his satisfaction, he decided to buy it. His decision was made up, after he asked the estate agent to mediate with the seller to reduce the sale price he was asking.

Source Cyprus mail.

https://cyprus-mail.com/2023/06/05/esta … uq51plSUlg