Selling real estate in Cyprus without an official title deed is a common but controversial practice. Many properties on the island lack this crucial document, often due to the actions or inaction of the buyers themselves. Let’s explore the risks and consequences of such situations.
Contents
Why the Absence of a Title Deed Can Be a Problem
Obtaining a Mortgage
If you plan to secure a mortgage using your property as collateral, the bank will require a title deed. Without it, financial institutions are likely to reject your application. Banks are unwilling to take on the additional risks associated with the lack of official ownership documentation.
Selling a Property Without a Title Deed
It is possible to sell a property without a title deed, but the process becomes much more complicated. Buyers are likely to approach such a deal with caution, asking critical questions such as:
- Why hasn’t the title deed been issued?
- What challenges might the new owner face when obtaining the title?
- Is it worth the risk when properties with complete documentation are available on the market?
These concerns can deter potential buyers or lower the value of your property.
Renovation and Modifications
If you wish to renovate or expand your property, the absence of a title deed will complicate the process. Modifications require official approval, and a commission must confirm that the property adheres to its original plan. Without a title deed, this can be a lengthy process. In contrast, properties with title deeds often undergo renovations without additional approvals, even if such actions contradict regulations.
Reasons for the Lack of a Title Deed
Delays by the Developer
Developers may delay issuing a title deed, especially if the property has been fully paid for. Without pressure from the owner, the developer might postpone the process indefinitely.
If you have made changes to the property without approval, such modifications might violate the original architectural plan. For example, adding a veranda or constructing a carport can hinder the issuance of a title deed.
Restrictions for Foreign Buyers
Foreign nationals must obtain permission from the Council of Ministers to purchase property in Cyprus. If you purchase more properties than allowed by law or fail to secure this permission, a title deed will not be issued. The law limits the number and size of properties foreign nationals can own.
Restrictions for Non-EU Buyers
Non-EU nationals are permitted to own no more than two properties in Cyprus. These can include:
- Two houses or apartments
- One house and one shop
Additionally, there is a limit on the size of land plots—no more than 4,014 square meters. Sellers and real estate agents may not always disclose these restrictions, focusing instead on closing the deal. It is therefore essential to independently review the regulations and consult a lawyer.
How to Overcome Restrictions and Obtain a Title Deed
Registering a Company in Cyprus
One way to own more than two properties is to purchase them through a Cypriot company. As a legal entity, the company can acquire and own real estate without these restrictions.
Seeking Legal Advice
Consulting a professional lawyer ensures proper documentation and compliance with legal requirements. An expert can provide optimal solutions tailored to your situation.
Selling property in Cyprus without a title deed is possible but comes with significant risks and challenges. The absence of this document can lead to difficulties with selling, obtaining financing, or modifying the property. To safeguard your investments, it is recommended to:
- Secure a title deed promptly
- Avoid unauthorized changes to the property
- Understand and comply with applicable laws and restrictions
With the right approach and professional support, you can avoid complications and successfully manage all real estate transactions in Cyprus.
