The terms of purchasing an immovable property are a decisive factor as well as its price

Entering into a sale contract that is tailor made for the benefit of the vendor who imposes the terms of sale of an immovable property, especially an apartment without an individual title, should be avoided. Potential purchasers should be careful and must consult legal counsel in a timely manner to avoid unnecessary troubles.

Sellers who promote either themselves or through an estate agent a problematic property, at a lower price in order to get rid of it, advertising it to buyers as a bargain, should raise suspicion that such property is not a bargain. The biggest problem that could arise is that such a property is an apartment for which a separate title deed will not be issued soon or easily, and if it is ever issued, it may contain a note due to the existence of building irregularities during construction, stating that its sale is prohibited. In other words, the buyer will be trapped since they will not be able to sell it in the future, whether the apartment is registered in their name or not.

Every interested buyer, in addition to obtaining legal advice, must also visit the land registry to request information about the condition of an apartment they are considering buying.

Under the excuse that the apartment does not have a title deed, such sale contracts usually include a condition that the seller does not assume responsibility for issuance of a title deed nor does guarantee its issuance.

The seller does not accept the inclusion of a condition for the issuance of a separate title deed by the land registry and when asked for explanation in the context of due diligence, they verbally discloses that a title deed will never be issued or, if issued, will contain a note that the future sale of the apartment is prohibited. At this point due to the reluctance of the potential buyer, the real estate agent comes in, who expresses the opinion that there is no problem, that other buyers bought apartments in the same complex with the advice of a lawyer who found the seller’s sales agreement sufficient.

A copy of the permits and architectural plans is presented along with a search certificate from the land registry, without any explanation of the planning irregularities and encumbrances, with the promise that bank waivers will be issued for the mortgages, while there is no mention for the existing memos which will remain as an encumbrance.

Also included in the sale agreement is a condition that the buyer declares that they have obtained independent legal advice, performed due diligence, studied and reviewed all documents and declares full satisfaction to the seller, fully aware of their rights and obligations.

With reference to the seller’s obligations related to tax exemptions, the buyer is referred in the future, after the completion of the purchase agreement and the deposit of the sales contract at the land registry, with the excuse that the tax department is delayed in issuing the tax exemptions.

In the meantime, the apartment does not have electricity or water meters and the buyer is not informed that they must commission a licensed electrician to prepare plans and submit them at their expense for approval and installation of a meter and connection of the apartment to electricity from the EAC, as well as with water from the water board.

The utilities have been unpaid since the completion of the apartment and while proof or a statement from the management committee is requested that no common expenses are owed, this fails because they were never paid.

Once the sales agreement is signed, the seller collects a significant amount as a deposit and an additional amount to cover all their taxes and obligations. In fact, the buyer is asked to become responsible for any damage to the apartment even though the sales agreement was not filed with the land registry and neither was possession handed over to them, that is, before they even acquired it. In the meantime, if memos are registered, the seller does not assume responsibility for getting a waiver.

It is clear that a buyer which purchases an apartment under the above circumstances is exposed to many risks and may end up in a legal dispute. It is better to avoid these pitfalls and buy property with a title deed rather than without because the price is lower. The terms of purchase are a decisive factor as well as price. The most important thing is for buyers to avoid exposure to the above risks.


George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: [email protected], tel: 24818288