Article.. Buyers AND Sellers beware

Buyers sometimes avoid appointments to carry out the transfer of properties into their names

You often hear about developers, property sellers in Cyprus not being in a position to have the title deeds issued and thus transferred, creating problems for the buyers. Less talked about, however, are the problems that the sellers can face.

If a contract of sale is deposited with the land registry, a buyer can seek a court order against the seller, provided all dues are paid. So there is some sort of a solution when it comes to dealing with problematic developers. What about the buyers, however, who are not abiding by their contract?

A major issue is that even if title deeds are issued and the developer or seller invites the buyer to an appointment to carry out the transfer, some buyers do not attend. This is quite serious since the developer, on whom the property is registered until it is transferred out of their name, is burdened with property taxes, common expenses, municipal charges and so on.

If not paid, the developer stands to become the subject of legal action against them, including the placing of a memo on all their properties, until such dues are paid. In addition there would be the legal costs, interest charges and so on, as well as having to carry out the administration of the property until the buyer decides to come forward for a transfer.

My office raised the matter with the land registry, which informed us that in such cases, the developers should sue the buyer to obtain a court order. The developer should pay the transfer fees, any capital gains and other taxes the buyer owes and then sue the buyer for the costs.

Some of these court cases can take 10-20 years to be resolved, meaning in the meantime, the developer has to bear all the costs.

In one case a developer informed us that his company will close down, but he cannot do it until he has registered the sold properties to the buyers, who do not appear for transfer, so he has to sustain the cost of running his company indefinitely.

Another problem that developers face is when existing buyers sell the property on to third parties, through assignment of their rights, and the developer is left in the dark about what is going on.

This state of affairs could be bearable for some for maybe one or two properties, but if a developer has numerous properties waiting to be transferred, they are in trouble. In the end if they run into financial troubles, quite often other buyers, even if they abide by their contract, may also have their transfer blocked.

Source Cyprus Mail

Article by

Antonis Loizou & Associates