Cyprus: How safe is it to invest in Cyprus - Louise Reynolds, Property Venture

So How safe is it to buy property in Cyprus?

Cyprus has been a traditionally popular holiday spot and a great country to choose for a holiday home. Just recently there have been a number of newsworthy stories, that may have ruffled a few feathers, among the more cautious buyers.

North - South Divide
North Cyprus has been split from the Greek Cypriot South of the island, since the Turkish intervention in 1974 and is recognised as a state only by Ankara, Turkey.

There were hopes that talks were starting to make progress between the Greek Cypriots and the leaders of Northern Cyprus. However reunification looks more of a distant dream, with the Turkish Cypriots’ election of a nationalist leader, Dervis Eroglu, as president in northern Cyprus.

Eroglu does not appear willing to concede much in order to reach an agreement with the Greek Cypriots and this could spell an end to hopes of reconciliation, that were being bandied about, up until recently. He favours two independent States.

The outcome of the talks is crucial to Turkey’s European Union membership bid. Greek Cypriots, could veto Turkish accession while the island remains divided.

The divided country has raised issues with “refugee estates” as the Orams ruling indicated. The Orams bought a £160,000 holiday home in Lapithos, an area of Cyprus that has been occupied by Turkish troops since 1974. A Cypriot court ordered them to raze the property, return the land and pay damages to Meletis Apostolides, who was one of thousands of Greek Cypriots who fled his home when Turkey invaded. The latest action to the UK Court of Appeal upheld the previous Cypriot ruling, that the house must be demolished. This means anyone wanting to buy in Northern Cyprus, should take care. The only country that recognises TRNC (Turkish Republic of Northern Cyprus), is Turkey, the Greeks don't and neither does any other country to date.

To be safe, it is best to stick with the Republic of Cyprus (also referred to as Southern Cyprus) for your ideal holiday home. The lack of international recognition of the TRNC (Turkish Republic of Northern Cyprus) makes it difficult to predict how things will turn out. Buying in Northern Cyprus would be considerably more speculative than buying in the Greek-controlled South.

Title Deeds
There are rumblings of unease over the buying process in Cyprus, which has been unsettling for some. So whilst there is not much we can do about the politics in Cyprus, there are some things buyers can do to help themselves over Cyprus title deeds.

Generally speaking Government services in Cyprus are slow and paperwork can take a while, in the cogs of bureaucracy. During the time that the Title Deeds have not been registered, the buyer can be vulnerable, dependent on how they have gone about registering their “Title” to the property

So it is best to ensure you are well- positioned.

There are some things that can be done to reduce the risks associated with Title Deeds:

• Ensure your legal advisor conducts a full search at the Land Registry Office to make sure the Title is clean and that no existing mortgages exist on the property or land

• Use an independent Lawyer who can then deposit the agreement at the Land Registry office immediately the sales contract is signed. Things can take longer and become a bit confused when the Developer’s lawyer is used, as it may be in the Developer’s interest to have a slow registration process

• Include in the contract of sale, a paragraph that gives the buyer the right to sell on, so that the developer cannot object at a later stage

• Get a Companies Registry check done, to establish the financial standing of the developer in question

• “Specific Performance“ clause inserted in the sales contract, before it is deposited at the Land Registry, should help the change in Title to be registered more quickly.

So how safe is it to buy property in Cyprus? As with any property purchase overseas, it is far safer when you are aware of what you ought to be doing to protect yourself, in advance of doing it. No perfect antidote exists, but you can do some basic, common-sense, things to protect your hard-earned money.

This is pretty much the same principle as if you were to buy property in the UK.

Louise Reynolds

Louise Reynolds is Director of Property Venture, an independent, UK-based agent, who helps time-strapped investors and holiday home purchasers, buy abroad by guiding through the buying process, so reducing the hassle. They visit the countries you buy in, so they can offer common-sense, grounded advice. Overseas members of NAEA.