REAL ESTATE
30.03.2024
A pig in a poke with a pool for
€1,000,000
How we stopped a client from buying a problematic villa in Limassol priced at €950,000
The situation
In May 2023 a family from Astana came to WhiteWins for a consultation. Sergey and Dinara had been to Cyprus many times as tourists and finally decided to buy property here.
They settled on a magnificent villa with a pool in a suburb of Limassol. The property was being sold on the secondary market, but the seller had no title deed.
The realtor explained to Sergey and Dinara that an investor had bought the house from the developer at the off-plan stage in 2017, never intended to live in it, never registered it in his name and was selling it by assigning his claim against the developer.
According to the realtor, after the deal the buyers could register ownership of the villa under the standard procedure provided for by Chapter 224 of the Immovable Property Law.
During the negotiations the seller also said he was ready to cut the price from the original €1,170,000 to €950,000, because he urgently needed money for new investments.
A title deed (certificate of registration of immovable property) is the owner's main document, confirming that their rights to the property are registered with the Department of Lands and Surveys of the Republic of Cyprus.
A title deed (certificate of registration of immovable property) is the owner's main document, confirming that their rights to the property are registered with the Department of Lands and Surveys of the Republic of Cyprus.
The request
The offer looked tempting, even though the seller had no title deed. Sergey, as an entrepreneur, was used to making decisions with a degree of risk and was ready to proceed with the deal.
Dinara decided to be cautious and check the property before the deal. A reliable lawyer was recommended to her by an acquaintance who had lived in Cyprus for 4 years and invested in real estate.
The offer looked tempting,
even though the seller had no title deed. Sergey, as an entrepreneur, was used to making decisions with a degree of risk and was ready to proceed with the deal.
even though the seller had no title deed. Sergey, as an entrepreneur, was used to making decisions with a degree of risk and was ready to proceed with the deal.
The checking process
A WhiteWins lawyer contacted the seller, requested his contract with the developer and made an inquiry to the land registry about the status of the property.
It turned out that the land registry had not issued the title deed to the developer because of deviations from the approved architectural design. The certificate of completion listed the non-conformities, and until they were fixed the villa could not be registered in anyone's name.
This is exactly why the seller never registered the property in his own name.
The lawyer then made inquiries about the developer and learned that its licence had not been renewed since May 2021 and the company was in liquidation. Getting it to fix the defects at the property would be difficult or impossible.
The realtor did not try to deceive Sergey and Dinara: the law he referred to really does allow selling property through an assignment of claim. But for the buyer to register ownership successfully, the developer had to remedy the violations.
In this case there was nobody to do it: the developer was no longer operating and would be fully liquidated within a few months.
Trust, but verify! A superficial check of the documents could have cost the buyers dearly, but common sense and caution told them to ask for a "second opinion".
The result
Sergey and Dinara received a legal opinion stating that they would not be able to register ownership of the property.
They could live in the villa and bequeath it, but selling it without a title deed would not be possible.
The clients decided to walk away from the deal and continue their search, but now with a mandatory check of the property's legal status.
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