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Property Due Diligence in Cyprus: Essential Legal Checklist Before Buying Real Estate

Purchasing real estate in Cyprus is a significant financial commitment that requires careful legal and financial consideration. To avoid unforeseen liabilities and safeguard your investment, prospective buyers must conduct thorough due diligence on any property prior to acquisition. This checklist outlines the essential legal and regulatory steps to ensure a secure and compliant transaction.

Legal Due Diligence

• Search Certificate from the Land Registry: Request an official search to confirm the property is free from encumbrances such as mortgages, charges, liens (MEMO), or any deposited Sale Agreements.
• Registered Owner’s Legal Status: Confirm that the owner is not subject to personal restrictions like bankruptcy, a company dissolution decree, or a court order prohibiting the sale.
• Expropriation Check: Ensure that the property is not subject to expropriation by the state.
• Planning Restrictions: Verify with the Department of Town Planning and Housing that there are no future development plans (e.g., new roads) affecting the property.
• Title Deed Verification: Confirm that the property has a separate title deed. If it does not, inquire into the reasons and risks involved.
• Leases or Tenancies: Check whether the property is currently leased or occupied under any tenancy agreements.
• Ensure that there are not any other notes, or restrictions on the property.

Planning and Construction Compliance

• Building Permits: Ensure that all structures on the property were constructed with valid building permits and comply with applicable zoning laws.
• Certificate of Final Approval: Confirm that the property passed all municipal inspections and conforms with approved architectural plans.
• Architectural Plans: Review these for any unauthorized alterations or extensions that may affect the legality or usability of the property.

Financial Due Diligence

• VAT Liability: New properties may be subject to VAT at 19%. Eligible first-time buyers may apply for a reduced rate of 5%. Resale properties are exempt from VAT but are subject to transfer fees.
• Outstanding Obligations: Obtain written confirmation (clearances) that all common expenses, property taxes, municipal fees, and utility bills have been settled by the seller.
• Transfer Fees: Verify the applicable transfer fees based on the market value of the property at the time of the title transfer.

Other Considerations

• Title Transfer: Once due diligence is completed and no legal or financial issues are outstanding, proceed with the immediate transfer of the title deed into your name.
• Sale Agreement: If issues are pending (e.g., Tax clearance or minor outstanding fees) and you have decided to buy the property you may have the option to enter into and Sale Agreement (ΠΩΕ) with the seller, which you should submit to the Department of Land Registry to secure your legal interest in the property.

For further information on this topic please contact AMG MYLONAS & ASSOCIATES LLC by telephone +357 25101080 or via email [email protected]

Our Services

At Mylonas Law, our experienced property lawyers are here to protect your interests at every stage of the transaction. From the initial due diligence to the final title deed transfer, we provide comprehensive legal support tailored to Cyprus real estate law.

Contact us today to schedule a free initial consultation and ensure your property purchase in Cyprus is secure, compliant, and stress-free.

The information provided by Mylonas Law is for general informational purposes only. It does not constitute or should not be read as a legal or tax advice. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice. No responsibility can be accepted by the authors or the publishers for any loss occasioned by acting or refraining from acting on the basis of this publication.