25.02.2024
Cypriots are often informed through the media or otherwise that Cypriot developers and sellers are unable to obtain title deeds and thus transfer title to the rightful owners. However, if you look from the other side, from the side of sellers, it seems that the latter also have their own problems.
If the contract of sale is deposited with the Land Office, the buyer can go to court to enforce certain performance against the seller (subject to payment of all fees) so that there is some judgment against these “bad” developers. What about buyers who don’t honor their contract?
The main problem is that even if the title is issued and the developer invites the buyer to attend the handover, what happens if the buyers don’t show up? This is quite serious, since the developer, the property on which it is registered (not yet transferred to his name), is burdened with property taxes, utility costs, utility bills, etc.
Failure to pay may result in the developer being subject to legal action against the developer, including a lien against all of his properties until such fees (legal costs, interest, etc.) are paid. In addition, the developer must manage the property until the buyer decides to transfer.
The issue was raised by the Land Registry, which advised that in such cases developers must sue the buyer, obtain a court order that the developer pay the transfer fee, any capital gains and other taxes due to the buyer, and then sue buyer for his expenses. That is, in such cases with buyers, the developer must bear all expenses until such a court decision is executed?
Some developers charge non-complying buyers with administration fees, which can result in large fees (say €2,000-€3,000 per year). What if the buyer dies or is convicted, does not reside in Cyprus or leaves the country to return home (meaning foreign buyers) or their address has changed?
In one case, the developer said his company would close down, but he could not do so until he registered the sold property in the name of a buyer who failed to show up for the transfer, so he would have to cover the costs of running his company until the buyer attended in transmission.
Other problems faced by the developer include the situation where existing buyers sell their properties to third parties (by assigning their rights), leaving the developer in the dark about what is happening.
This state of affairs may be “tolerable” for 1-2 objects, but if the developer has many objects that remain untransferred, he may have serious problems.
