Buying to Build in Cyprus

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Buying to Build in Cyprus

Buying Land

All buyers are strongly advised to seek independent legal advice. 

• Do not sign any papers or hand over any money until obtaining advice from an independent lawyer with effective communication skills
• Under no circumstances should a lawyer be used who has been introduced or recommended by a vendor or an estate agent

These lawyers occasionally represent the interests of the vendor and the advice they provide to buyers may sometimes be incomplete or biased in favour of the vendor.

Government Approval

Nationals of EU member states who are resident in Cyprus may buy as much property as they wish. To confirm their residency, they need to take their passport and Temporary Resident Permit to their local District Administration Office where the officers will issue them with a certificate confirming their status. This process takes a matter of minutes and a Certificate of Permanent Residence will be delivered by post, usually within a week.

Non-resident EU nationals are permitted to buy as much land as they wish. However, if they want to buy any other sort of property, their purchase is restricted to one house or one apartment for which approval is needed from a Government body known as the Council of Ministers. The approval process may take between six and twelve months, possibly longer in some cases. But on a more positive note, it is unusual for the Council of Ministers to refuse permission to bona fide EU nationals.

Nationals of countries outside of the EU are required to seek approval from the Council of Ministers before they can own any type of property. Furthermore, their ownership is limited to:

• An apartment
• A house
• A building plot or land of not more than approximately 4,000 square metres

Since Cyprus’ accession to the EU its property laws have been revised to conform to the provisions of the acquis communitaire; further revisions are anticipated.

Land Registry

Cyprus maintains an effective Land Registry system in which all "immovable property" (a term that includes both land and property) is registered.

Each piece of immovable property has an associated:

• Registration Certificate (also known as a Title Deed) containing information such as the owner(s), its size and location and the Lands' Office reference.
• An accompanying Site Plan that locates the land on a map.

The Land Registry is administered by a number of District Lands' Offices where records of immovable property ownership are issued, kept and maintained. The offices are located in Limassol, Paphos, Larnaca, Paralimni and the capital city of Nicosia.

Planning Zones

For planning purposes, the island is divided into various planning zones. These include residential, agricultural, animal rearing, industrial, green belt, and tourist zones. You must ensure that the land you intend to buy is in an appropriate zone. If you do not:

• You may be denied permission to build a dwelling.
• It may prove prohibitively expensive to get electricity, water, and the telephone to your land and/or you may have to wait many years.
• You may have to give up part of your land for roads, pavements and amenity areas.
• There may be no right of way for access to the land.
• If the land is more than 300 feet from a public road, permission to build a dwelling on it will almost certainly be refused.
• Your neighbours may turn out to be a herd of goats - or something worse.

It is also possible to buy land designated as a building plot - in Greek οικόπεδο (pronounced ikpedo). The advantage of buying a building plot is that the utility services (water, electricity and telephone) will be available on the land and there will be a right of way allowing vehicular access. Such land is usually more expensive to buy as its owners will have undertaken its division into building plots and paid for the installation of the utility services.
There are a number of other aspects to be investigated regarding planning zones. These include: building density, site coverage, usage, height and number of floors; and define the overall parameters and constraints of any structures that can be erected. Investigation of these aspects may reveal that the building density is too low to build a reasonably sized domestic dwelling or that the zone prohibits the construction of dwellings designed for human habitation.

Finding land

Much of the available land is in private hands, usually owned by one or several members of the same family.

Estate Agents (a profession that was virtually unheard of until 15 years ago in Cyprus), may be able to provide you with details of land for sale and the local newspapers sometimes contain advertisements for land.

But in Cyprus, the majority of local people do not use estate agents or advertise in newspapers. Most land is sold through word-of-mouth and so the direct approach is by far the best way of finding out what's available in the area. 

Visit the area in which you are interested and ask the local residents if they know of any land for sale. You can ask at the Community Office, the coffee shop, the local supermarket and drive around the area keeping an eye out for roughly made "For Sale" (ΠΩΛΟΥΝΤΑΙ or Πωλούνται) signs and noting down telephone numbers.

Inspecting Land

When viewing land, be certain that the land you are shown is the land being sold. Ask the vendor for a copy of the Title Deed and the Lands' Office Site Plan and:

• Check that the sheet/plan/plot/references shown on the Title Deed agree with those on the Site Plan.
• Look at the Site Plan and from its boundaries, shape and location, look around you and identify roads, buildings, and other features shown on the Site Plan.

If the vendor is unable or unwilling to provide you with a copy of the Title Deed or the Lands' Office Site Plan, find yourself another piece of land. Amongst other pieces of information, the Title Deed will show the area of the land and the planning zone in which it's located.

Searches

Having found a piece of land you wish to buy, instruct your lawyer to carry out a land and title search. The land search will identify the size and scope of any dwelling you are allowed to build, while the title search will uncover any 'encumbrances or prohibitions' (liens or charges) against the land.

It is perfectly legal in Cyprus to sell land and other 'immovable property' that has charges, such as a mortgage, outstanding against it. However, you will not own the property until the present owner has cleared the debt. Should he not clear the debt, the creditor(s) may pursue their claim against the land, which may be enforced in a court of law.

For obvious reasons, buying land or property in Cyprus that is 'encumbered' by a mortgage or any other claim is not recommended; you may end up with nothing.

Contract

Once you are satisfied that the land has a "clean" title (i.e. there are no outstanding claims against it) and you have negotiated an acceptable price and payment terms with the vendor(s), your lawyer draws up a contract of sale. As there is no "contract cooling off" period in Cyprus, once you and the vendor(s) have signed the contract, you are committed to buy.

Within two months of signing the contract, your lawyer must deposit it at the local District Lands' Office for what is known as "specific performance". This protects your rights as a buyer by creating an encumbrance against the land that prevents its current owner selling the land to someone else, using it as collateral against a loan, etc.

Conveyancing

The final stage of your purchase is conveyancing title to your name. This is the day when you finally become the owner of a plot of land in Cyprus and time for celebration!

The conveyancing process is carried out by the District Lands' Office. You need to complete the appropriate form and your lawyer can take care of the rest. Non-resident EU citizens and other foreign nationals need to provide a certified copy of the Council of Ministers' permission to acquire the property, while resident EU citizens need to provide the 'Certificate of Permanent Residence' supplied to them by their local District Administration Office.

Property Transfer Fees are payable at the time of conveyancing. The fee scale varies from time to time; your lawyer will be able to advise you accordingly.

The District Lands' Office issues a new Registration Certificate (Title Deed) bearing the name of the new owners.

Building a Property

All property built in Cyprus needs to comply with strict government anti-seismic regulations. If you are building a property, the responsibility for its lawful and successful construction will normally rest on the shoulders of your architect.

• Do not be tempted to take on the task of building the property yourself; this is illegal in Cyprus.

Planning Applications

Planning permission needs to be obtained for virtually all types of development from the Town Planning Authority, which is usually co-located with the District Lands' Offices. Planning Applications must be submitted to the Town Planning Authority by architects or construction engineers who are registered to practice in the Republic of Cyprus. When an application is approved, it remains valid for three years. If substantial construction work is not started with this three year period, the Planning Application must be submitted again for consideration.

Should the architect or owner consider that a planning application has been unjustly refused, they may appeal the decision of the Town Planning Authority. A planning appeal must be lodged with the Council of Ministers within 30 days from the date of notification of its refusal. As the appeal process involves consideration by various bodies, the appeal process may take several months.

Building Permits

Although the land can be cleared and prepared ready for work to start a Building Permit must be obtained before any construction activity can start.

The applicant, or the architect working on his behalf, completes an application form (E.D.6) that must be signed by the owner(s) shown on the Registration Certificate (Title Deed). The architect completes paragraph 18 of the form and submits it together with a copy of the professional license issued by the Cyprus Scientific & Technical Chamber (ETEK).

The Planning Permission Plans and Conditions as issued by the Town Planning authority, the architect's drawings, static estimates and plans, and Registration Certificate (Title Deed) must accompany the application.

The application is submitted to the District Administration, which is usually co-located with the District Lands' Office.

Tendering and Contracting

Your architect will invite tenders from registered building contractors to build your property and will help you to evaluate the tenders.

Having selected your contractor and negotiated the price, you will need to enter into a contract with him for the construction of the property. The standard form of contract used in Cyprus is that published by ΜΕΔΣΚ - Μικτή Επιτροπή Δομικών Συμβολαίων Κύπρου (The Joint Committee of Architects, Engineers, Quantity Surveyors and Building Contractors of Cyprus). These are in Greek and are based on the UK Joint Contracts Tribunal models published in the United Kingdom by the Royal Institute of British Architects.

Building your Property and Payment

Your architect will pay regular inspection visits to the construction site to monitor progress and ensure that everything is going to plan.

Every month or so, the building contractor will claim payment for work he's completed. Your architect will check to ensure that the payment request is appropriate and raises an "Inspection Certificate" that he passes to you for payment. You pay the building contractor and he issues you with a receipt.

Completion

On completion of the building work, your architect obtains a "Certificate of Approval" from the District Administration. Representatives visit and inspect the property before issuing the Certificate.

Once the Certificate is issued, you file an application at the District Lands' Office to update the Title Deed together with:

• Certificate of Registration (Title Deed) of the property.
• Building Permit with all plans and terms attached thereto.
• Certificate of Approval Building.

When the District Lands' Office is satisfied that the property has been built in accordance with the permits and plans, it updates the Title Deed showing that a building now occupies the land.

• Do not make any changes to the property until it has been inspected by the representatives from the District Administration. Even small changes might result in a delay in issuing the "Certificate of Approval".

Related Information

• See the AngloINFO INFOrmation Page, How to Buy a Property in Cyprus
• See the AngloINFO INFOrmation Page, Conveyancing in Cyprus: Cyprus Property Purchase Laws

Information supplied by Nigel Howarth
Cyprus Property Buyers, Measham, Derbyshire, DE12 7HZ, UK
 e-mail  / Website: www.cyprus-property-buyers.com
Extract adapted from: Buying a Home in Cyprus: A Practical Guide to Successful Real Estate Purchase 
ISBN: 0-9548621-0-4
Available from amazon.co.uk
Copyright © 2005 Nigel Howarth All Rights Reserved