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Top 10 tips on what to do on discovering problems with your new property

Louise Zambartas
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EVERY week I receive enquiries from new clients who have bought a property in Cyprus, then encountered problems with their new home.

Here are my top ten tips on what you should do:

Tip 1 – Hold money back for “snagging”

“Snagging” is the term used for defects, mostly of a minor nature, often found in brand new properties. If you are able to hold some of the purchase price back for snagging, this can be a very effective method to ensure the property is finished to the correct standard. A professional should be appointed to prepare the snagging list – a surveyor may well pick up on points you do not notice.

Tip 2 – Do not sign a delivery acceptance form

Many developers will ask you to sign a form upon delivery of the property stating that you accept it in the state it is delivered. This can hinder any future claim that the property was not properly completed. Do not sign and (if pushed) consult your lawyer on the content of the form.

Tip 3 – If there are no essential utilities – the property is not completed

If the property is not connected to electricity and water then you should refuse to take delivery – the property is not completed. If you accept the property without electricity of its own, you may find yourself “borrowing” a supply for months or even years!!

Tip 4 – Do not stop paying

If you have problems during the build of your property, there can be serious implications if you stop making payments which are due to the developer under the contract. All contracts will contain a clause outlining the interest to be paid to the developer if you make a late payment. Unless the faults in your house are sufficiently serious to constitute a fundamental breach of contract, interest will run on your non-payments. Consult your lawyer if you do think the faults are sufficiently serious to warrant non-payment.

Tip 5 – Consider arbitration

If the developer will agree to the joint instruction of an independent surveyor (at joint cost) then this can be a very good way to agree on any outstanding work due.

Tip 6 – Don’t let it go on indefinitely

If the developer has tried to sort out the problems and is unable to put them right – don’t let him keep trying again and again to fix the issue. This could lead to you being deemed to have accepted the condition of the property. Get a quotation from an independent expert contractor.

Tip 7 – Never pay for repairs

Never agree to pay for any repairs which are caused as a result of poor build. If you do have to pay for an independent contractor to sort something out urgently then make it clear (in writing) to the developer that you intend to claim this money back from him and that you are in no way waiving your legal rights by paying.

Tip 8 – Document everything

Keep written records of everything that happens and never rely on what the developer tells you verbally – get any promises made to fix things in writing.

Tip 9 – Near the end of the contractual guarantee?

If it is getting close to the end of expiry your contractual guarantee and the problems have not yet been fixed, get it in writing from the developer that the defects identified will still be covered by the guarantee – even if it has expired.

Tip 10 – Get a good lawyer

If you have paid the full purchase price and moved in, and then serious problems emerge, you really need to get a good lawyer to sort it out for you. Do not enter into protracted (and fruitless) correspondence with the developer by yourself. It is amazing how many clients score an own goal by mistake during the course of the correspondence!

By Louise Zambartas LLB (Hons) Law

Louise is a dual qualified practising English Solicitor and Cyprus Advocate and has established The Law Offices of Louise Zambartas; she lives and works in Limassol. I am grateful to Louise for this and her other articles; I urge all those thinking of buying or selling property in Cyprus to follow her sound advice – Editor

Over the coming weeks, we’ll be publishing more hints and tips by Louise. In the next one, she’ll be giving us her top legal tips on avoiding problems with your lawyer in Cyprus.

The Law Office of Louise Zambartas is a specialist team of Cyprus Property Lawyers comprising English Solicitors and Cyprus Barristers dedicated to dealing with conveyancing in Cyprus and associated legal work.

Cyprus against the spoiling of its coastline

Nigel Howarth
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A petition has recently been started for the demolition of an illegally built pier in the Fig Tree Bay area of at Protaras on the eastern coast of Cyprus.

If you wish to support the campaigners in their endeavours to get this illegal construction demolished and removed, please visit the ‘Cyprus against the spoiling of its coastline’ website and add your name to the growing list of supporters.

I’ve included the text of the petition below for your convenience.

‘This is a campaign demanding from the authorities that they enforce the demolition of a pier which private individuals illegally and without any authority constructed over the rocks and well into the sea in the bay next to Fig Tree Bay (Protaras) towards the south and are using for the embarkation and disembarkation of passengers for Coastal Cruises with two ships which they moor there. Please sign the petition below to express your support and to pressurise the authorities to enforce the complete removal of this obstruction and to withdraw the permission which the Maritime Authorities granted for the performance of Coastal Cruises from the illegal pier.

Friends of Protaras were shocked to find an illegal platform being constructed in their very back yard to house a large ship and a catamaran.

The Jetty, which protrudes out into the beautiful and recently unspoiled coastline of Protaras (in the bay opposite Maistrali Hotel) by at least 15m, and is about 2m high, is not only illegally built but it is a monstrosity of a construction. Tons of concrete have been poured into the sea, rocks have been moved and concrete stairs spoil the shore.

This used to be a tranquil spot for the public to enjoy but now this platform has destroyed the environment.

Swimming is impossible as the sea often turns a milky colour from all the concrete seeping out through the white and pink sandbags which have been hastily and badly put around the concrete. It is also dangerous as there are metal spikes coming out of the water, again as a result of bad construction. This poses a serious health risk and the probability of an injury is high. Children and adults alike would swim in this part of the Protaras coastline.

The marine life has no doubt been severely affected as a result of this obtrusive and invasive procedure and it is impossible to know the long term effects this will cause.

We were especially disappointed to discover that even though the police and authorities were called during the construction by infuriated and frustrated residents desperate to put a stop to this before it was too late; they did absolutely nothing to stop it. The result is a twice daily arrival and departure of 2 large tourist filled buses, each paying 50 euros for a day trip, arriving to jump on the humongous catamaran awaiting them at the end of the jetty.

This is also very noisy and there is rubbish everywhere at the end of the day.

Please sign this petition and support the demand that the authorities force the individuals who illegally constructed the pier to pull this monstrosity down and return as much as possible this once beautiful beach to its former state. Please also send it onwards to your friends and family, or sign on their behalf if they have no e-mail address.

This will be sent to: The Minister of the Interior, the District Officer of Famagusta, the Minister of Communications and Works, the Director of the Department of Merchant Shipping, the Mayor of Paralimni and the Chief of Police, in order to achieve the maximum possible exposure and to make it very clear that we will not stand for this and allow our island to become spoiled and undermined like this any longer.

Thank you. Passionate action from the people is the only way to ensure the preservation of beautiful Cyprus’

Paphos marina coming soon

Nigel Howarth
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IN a hotly contested bidding contest between ‘Leptos‘ and ‘Aristo‘ (whose chairman is also the new chairman of the Bank of Cyprus), it appears that ‘Leptos’ has been awarded the contract to construct the new marina at Paphos.

Six marinas are planned at different parts of the island:

  • The Paphos Marina will be constructed at “Potima” area in Kissonerga and will have a capacity of 1,000 vessels.
  • The Ayios Raphael Marina in Limassol will continue to operate with a capacity of 250 vessels.
  • In Larnaca, the existing Marina will be extended so that its current capacity of 450 vessels will expand to 1,000 vessels.
  • The Ayia Napa Marina will be constructed at “Loumata” area and will have a capacity of 600 vessels.
  • The Paralimni Marina will be built near the fishing shelter and will have a capacity of 250 vessels.

The Ministry of Commerce, Industry and Tourism has said that the marinas will help enhance maritime tourism, which will serve strategic goals for enriching the island’s tourist product and improving seasonality.

The marinas of Cyprus are expected to have a comparative advantage over those of Greece, Turkey and Israel, due to the island’s geographic position.

No-one is interested in buying

Nigel Howarth
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WE have a small apartment in Kapparis on the east coast of Cyprus that we bought with the intention of renting to tourists. The property developer we bought it from promised us that we would get an annual return between 15% and 20% on our investment, but the only people who have rented it so far are our friends and family.

We have been trying to sell it for nearly a year and get our money back, but no-one is interested in buying. Can you suggest what we can do? It’s a two bedroom apartment about 100 yards from the sea.

Answer

I’m afraid there are many, many people in the same situation as yourselves. There is a huge over-supply of property on the market at the present time and finding a buyer for a run of the mill 2 bedroom holiday apartment may prove very difficult.

There are a number of websites where you can advertise your apartment free or for a small charge. I suggest that you ‘dress’ each of the rooms, take some photographs and put together a good promotional write-up.

Some time ago I came across a very good website called ‘Lay My Hat‘. It’s completely free (although they do accept donations) and is full of free advice, ideas and suggestions for holiday rental home owners.

I should also add that it’s extremely unlikely that you’ll achieve 15% – 20% ROI as ‘promised’ by your developer; if you manage to get 4%, you’ll be very lucky. Unfortunately, some of these people value money in the bank more than their good name and reputation and will lie through their teeth to achieve a sale.

No title deeds – no sale

Nigel Howarth
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LAST week, Jean Christou reported how an elderly woman, who has been waiting for the Title Deeds to her property since 1982, was being held to ransom by her developer who is demanding more than €25,000 in what he claims is ‘Immovable Property Tax’, using the threat of withholding her Title Deeds to elicit payment.

Everyone knows there are massive problems in Cyprus with property developers abusing property law to make huge profits for themselves. So why is the Government refusing to protect the rights of property buyers by stopping these cowboys and conmen?

IN OCTOBER 2005, the Cyprus Mail published an article ‘New Rights Planned for House Buyers’. This claimed that the Cyprus Government was going to plug loopholes in the law, introduce fines, and provide property buyers what it called ‘an arsenal of weapons against unscrupulous property developers’ such as Korfi Mountain Estates.

What has the Government of Cyprus done to implement these eagerly anticipated ‘new rights’? ABSOLUTELY NOTHING!

IN OCTOBER 2006, I took part in a round table discussion on the subject of Title Deeds. The discussion was broadcast live on the Cyprus Broadcasting Corporation’s second radio channel. During the discussion the MP for Limassol, Rikkos Erotokritou, stated that the “House of Representatives are worrying a lot about the situation”. (If you want to listen to the whole discussion, click here).

The Government has been ‘worrying a lot’ for the last 18 months, but what has it done? ABSOLUTELY NOTHING!

IN SEPTEMBER 2007, the Cyprus Mail published another article ‘Law Reform Hopes to clear up Title Deeds Trap’. This claimed that the Government was looking to provide greater security to homebuyers by enabling their Contracts of Sale to take precedence over the developers mortgages.

What has the Government of Cyprus done to implement these ‘law reforms’? You guessed it ABSOLUTELY NOTHING!

In today’s Sunday Mail, there is yet another article about the problems. This admits that the laws of Cyprus are designed to protect the lenders, i.e. the banks, and not the buyers, who are provided very little protection.

Under the current law, developers’ mortgages take priority over the buyer’s Contract of Sale. So if a developer goes bankrupt, the bank can auction the land to recover its loan and any extra money made goes to the buyer, which is no comfort to anyone who has paid for their property in full – like Roger Snelling and others like him.

The article goes on to say that the onus should be put on the banks by giving the buyer’s Contract of Sale priority over the developer’s mortgage.

“This would force the banks to be much more cautious in approving loans for developers, which would be no bad thing, as they would be performing an unofficial regulatory role. They would be more selective about whom they gave loans to and this would keep the cowboys out of the property development market”.

But in my opinion, giving the buyer’s Contract of Sale priority over the developer’s mortgage will not resolve the problem. Consider what will happen if the buyer wants to sell the property. The developer’s mortgage will have priority over the new Contract of Sale and the banks could well step in and auction the property to recover the developer’s debt!

There is only one solution to the problem. The law must be changed to prevent the sale of mortgaged property – and it must also be changed to prevent property developers mortgaging property once it’s been sold.

Until the Government takes assertive action to stop the cowboys and conmen, and assuming that you don’t want to end up in the same unenviable position as the 83 year-old woman, Roger Snelling and many others like them:

DO NOT BUY PROPERTY IN CYPRUS
unless it has a Title Deed that is NOT ‘encumbered’ by a mortgage or any other claim.

If you buy property that is mortgaged or that could be mortgaged
YOU RISK LOSING EVERYTHING!

Top 10 tips on buying land in Cyprus

Louise Zambartas
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Every property purchase has individual factors which make it unique and in the case of buying land in Cyprus there are some special considerations which need to be carefully examined during the purchase process.

Here are my top ten hints on buying land in Cyprus.

Tip 1 – Ensure the person selling to you owns all the land

Particular care needs to be taken when buying a share in a plot of land – unless all of the owners have agreed to the sale. If you want to buy a share in an undivided plot of land great care must be taken to ensure you purchase the part you wish to.

Tip 2 – Carefully examine the title deed and topographical plan

You need to carefully look at the boundaries, shape and location. You will need to identify the roads, buildings and other features. Check to ensure that the sheet/plan/plot/references on the Title Deed are the same as those on the topographical plan. You have to be certain that the Land you are looking at, is the Land in the documents provided by the Seller.

Tip 3 – Carry out searches

Your lawyer should advise you of the most important and appropriate searches to carry out. Certainly an encumbrances search at the Land Registry is required in order to establish that the title to a plot of land is ‘clean’. The search will also tell you if your Land is subject to the rights of other persons, e.g. a right of way or a right to pick olives from the trees!

You may also carry out searches at the Town Planning Office and bankruptcy/company searches against the Seller.

Tip 4 – Check out the zoning

For planning purposes Cyprus is divided into various planning zones. The zones determine what can or cannot be done with a piece of land and they are: residential, agricultural, animal rearing, industrial, green belt and tourist.

Tip 5 – If it is a restricted zone – take particular care

If the zone has restrictions, this can affect the granting of planning permission for what you wish to build and you should seek expert advice.

Tip 6 – Think about amenities

If the land is not connected to electricity, phone lines and water it can prove hugely expensive to connect to these amenities and it may take many years before this can be done! Do not accept the sellers word for it, get the authorities and find out for yourself.

Tip 7 – Consider access

There may be no access to the land or any right of way over other Land may be insufficient to make full use of the land. You can apply to get a right of way from neighbouring plots but you may need to compensate the owners of that land and this can cause substantial delays at the Land Registry. It is better to insist on the seller sorting the access before you buy.

Tip 8 – Check the ground conditions

A Geological and/or civil engineer’s survey can assist here. The ground conditions (steep, rocky hills are common in Cyprus) may prevent building or there may be a seasonal water course running through the land. Retaining walls and Land fill may be needed.

You need to be certain that you will be able to build what you want to build on the Land.

Tip 9 – Get the land checked out by an architect

You certainly don’t want to discover that the plot of land you have just purchased is totally unsuitable for the house of your dreams; get an expert to check it out!

Tip 10 – Get a good lawyer

So many clients are under the (false) impression that buying land is simpler than buying a property with a house. However, as with any transaction involving land, the financial stakes (for most people) are high! A good lawyer will protect you through out the process and ensure that you don’t make a mistake that could be expensive!!

By Louise Zambartas LLB (Hons) Law

Louise is a dual qualified practising English Solicitor and Cyprus Advocate and has established The Law Offices of Louise Zambartas; she lives and works in Limassol. I am grateful to Louise for this and her other articles; I urge all those thinking of buying or selling property in Cyprus to follow her sound advice – Editor

Over the coming weeks, we’ll be publishing more hints and tips by Louise. In the next one, she’ll be giving us her top legal tips on what to do if you discover problems with your new property.

The Law Office of Louise Zambartas is a specialist team of Cyprus Property Lawyers comprising English Solicitors and Cyprus Barristers dedicated to dealing with conveyancing in Cyprus and associated legal work.

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