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By Antonis F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
The main market driver in housing is the resales sector, that is individuals who wish to sell their homes. If a title is in hand this is simple because you just transfer the title deed and all is finished.
In this case the seller must bear in mind that he has to clear his dues prior to any transfer.
- All property taxes, municipal and sewage taxes must be paid prior to transfer.
- Common expenses due must also be cleared. Also pay all outstanding utilities (water, EAC, telephone) charges up to date of the resale.
- Capital gains, if any, must be settled and a clearance certificate from the Tax Authorities secured (a simple process). Having said that, it is a simple job and in order to minimise your tax burden, you must have the cost of acquisition, any additions you have done (with receipts), make particular reference to furniture and equipment (not taxed) if included in the sale price, etc. Refer to one of my previous articles on Capital Gains tax regarding exemptions and limitations.
- If mortgaged, you must secure a mortgage release or now that loans are difficult to come by, negotiate with the bank to have the balance of the loan due passed on to the new buyer. This should help your sale.
- If no title is available the procedure becomes more complicated, but not impossible. It requires, however, the cooperation of the registered owner/ developer to an extent.
- Enter into a cancellation agreement with the registered owner, who will then enter into a new sales agreement with the new buyer.
- Cancellation fees required by developers range depending on whether the procedure is to be undertaken by the developer/registered owner, or by the original buyer or the new one. We estimate that anything between EUR 1,500 to 2,500 is reasonable (but there are thieving examples).
- Make sure again that what we have referred to before are settled (property taxes, common expenses, capital gains etc).
- Under a new law, if the original developer/owner is not cooperating, you can assign your original agreement to the new buyer and deposit this assignment with the Lands Office. This is only possible if the existing buyer has deposited his sales contract before. The Lands Office will require a capital gains tax release, but I remind you that all other matters referred to above are settled. If you opt for this procedure, include in the agreement various matters – e.g. required maintenance period, outstanding EAC/water/telephone charges (as in all cases).
Both resales and assignments do not (as we are informed by the Lands Office) bear double transfer fees. So, the original buyer stands to gain a considerable sum in terms of transfer fees.
If I was the buyer I would opt for the cancellation and new sale option, since it is an established procedure, whereas the assignment option has been recently introduced and we are not aware of any possible would-be complications. But other than my own, non-legal opinion, the assignment is simpler and less costly for the original buyer.
As a tip, many banks have prepared catalogues of properties for sale which they have repossessed or for those with which they have a problem in collecting the installments or even the bank try to accommodate a resale in order to assist its clients. So, why not refer to your bank, if they have such a scheme? It is another source of sale since the banks appoint registered agents to handle, do not intervene in the sale (if not problematic) and we suspect that they have a certain inclination to finance the new buyers.
I would recommend you hire a lawyer for your property deals notwithstanding the fact that using a solicitor is a problem in some cases. Several readers have written to us asking for a recommendation referring to disappointing (to say the least) solicitor’s behaviour. We do refer readers from time to time who have a solicitor’s problem, recommending a number per area, who we know (there are many other good ones who we do not know mind you). We are sticking our neck out but someone has to do it, whereas some law firms are using young graduates well qualified on paper but with very little experience or practical knowledge. There is a list of “recommended” advocates issued by the British High Commission which is available on request.
Once you have sorted out all the above, refer to my previous article on “Preparing your house for sale”.
