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Indifferent buyers and distressed sellers

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It is often that we are informed through the media or otherwise, of Cyprus developers and sellers not being in a position to have the title deeds issued and thus transfers of titles to the rightful owners.  Yet looking on the other side, that of the sellers, it seems that the latter have their problems also.

If a contract of sale is deposited with the Lands Office, the buyer can seek a court order to secure a specific performance against the seller (provided all dues are paid) so there is some sort of a solution against these “bad” developers.

What about the buyers, however, who are not abiding by their contract?

A major issue is that even if the titles are issued and the developer invites the buyer to attend a transfer, what happens when the buyers do not attend to affect the transfer?  This is quite serious since the developer, the property on whom it is registered (until transferred out of his name) is burdened with property taxes, common expenses, municipal charges etc.

If not paid, the developer stands to become the subject of legal action against him, including the placing of a memo on all his properties, until such dues are paid (the legal cost, interest charges etc).  In addition, the developer must carry out the administration of the property until the buyer decides to come forward for the transfer.

We have raised the matter with the Lands Office who informed us that in such events, the developers should sue the buyer, obtain a court order for the developer to pay the transfer fees, any capital gains and other taxes due of the buyer and then sue the buyer for his costs.

So, in these cases of buyers, some of which can take 10-20 years to come along, the developer has to bear all the costs, until such court decision is implemented ?

Indifferent buyers

Having spoken to some developers, we were informed that they charge the non-abiding buyers with administration fees, which could come up with a lot of dues (say €2,000-3,000 per annum). And if the buyer dies or is under administration, even if the buyer does not live in the property/or leaves the country to return back home (I refer to foreign buyers) or his address has changed, what does one do?

In one case, the developer informed us that his company will close down, but he cannot do it until he has registered the sold properties to the buyer, who do not show up for the transfer, so he has to sustain the cost of running his company until and if the buyer attends the transfer.

Among other problems that the developer faces is when existing buyers sell their property to third parties (through assignment of their rights) so that the developer is in the dark of what is going on.

This state of affairs may be “bearable” for 1-2 properties, but if the developer has numerous properties that remain non transferred, he is in trouble.

At the end and if he runs into financial troubles, then quite often other buyers, even if they abide by their contract, may be also blocked on their transfer (in addition to the non-payment of the common expenses etc).

 

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