Buying Property in Cyprus
‘Live the Dream’ the hoardings shout. Cyprus is covered in developer’s advertising and offices exhorting people to buy property in Cyprus. Get it right – and you can enjoy a dream lifestyle. But the sad fact is the majority of people experience a nightmare as they get ripped off to some degree along the way.
The advice here is based on our practical experience of buying property in Cyprus. Each point is covered in summary, click the links to dig deeper.
There’s a world of a difference between the hype and the reality
In England, people joke about the dishonesty of estate agents. You’ve seen nothing in comparison with what happens in Cyprus. The only things you can believe in Cyprus are those written down and signed. Nothing else counts, AT ALL. If they won’t agree to writing it down, don’t believe anything you’re being told.
It goes without saying, you must confirm every conversation also by email, and you must keep all the emails. Also copy your lawyer on every email.
Get a good lawyer, from a different town to the one you’re buying in
Don’t ever accept a developer’s or agent’s recommendation of a lawyer to use. Take the names they’ve recommeded to you, and then go somewhere else and choose somebody different. Preferably in a different town as far away as possible.
Legal recourse isn’t a practical option
There’s two dimensions to this one. Firstly, it takes years to bring any sort of case to court (by which time the developer will have long disappeared). Secondly, it’s a small country where everybody knows everybody. Somewhere along the line, there’ll be a connection, and as a foreigner the dice is immediately loaded against you.
Make sure the plot you’re being shown is in fact the plot you’re being sold
Sounds crazy, but it’s a fairly common practice to show purchasers one plot when it’s another that’s actually being sold. Or maybe a part of what you’re being shown. The only proof is to get the Cyprus Land Registry to mark out the actual plot you’re being sold.
Get Title Deeds or WALK AWAY
The Cyprus Title Deeds scandal has now reached the European Commission. And a scandal it is. It’s common practice in Cyprus for developers to retain the Title Deeds when they sell you your dream villa (and especially your dream apartment).
You may be living in a property you’ve bought and paid for, but without the Title Deeds, technically the developer still owns it. And they might well have used your Title Deeds as collateral to get a mortgage to fund their next development. So if they go bust, expect somebody to be knocking on ‘your’ door to claim ‘their’ house back.
This happens so much it’s become a time bomb waiting to explode. And explode it will. It doesn’t matter how good a deal you think you’re getting, if you’re not getting the Title Deeds, WALK AWAY NOW. And don’t hand over any money until you get them.
Don’t buy off-plan, only buy what you can see
It’s been common practice in Cyprus to buy off-plan on the promise of rapidly escalating prices leading to a guaranteed profit. The problem is you’ve no guarantee of what your villa or apartment will actually be like. Sure it’ll probably resemble the drawings you’re shown to a degree, and it’ll probably have most of the things loosely described on the couple of bits of paper that pass as the ‘Specifications’.
Trying to nail down detailed specifications is like walking through treacle carrying a fully grown ox. You’ll give up and accept long before the developer does.
It’s common for dimensions to vary significantly – like you end up with a significantly smaller villa than you expect. It’s common to show you features that are ostensibly standard – they’re not. Once you’ve signed a contract with the loose specifications or sketchy drawings attached to it, you’ve set yourself up beautifully for EVERYTHING to become an optional extra.
The only answer to all of the above is to buy a finished property. Where you can see exactly what is there and what isn’t there. (And don’t believe the ‘that’s going to be done next week story’. It won’t be unless it’s written down and signed).
Right now Cyprus is covered in property for sale. You don’t need to put your faith in some developer’s promises. Do a great deal on something you can see and has Title Deeds. Buy something that’s finished and liveable in. Anything else is Risk with a capital ‘R’.
Basic services must be connected
If you buy property in the UK, you expect it to be connected to electricity and water, gas too. You’re not going to believe this, but you can’t make that assumption in Cyprus.
We know of several people living in luxury villas with a generator roaring away outside night and day (at their enormous cost) because the developer hasn’t paid the Electricity Authority to have the electricity connected.
It’s another reason to only buy what you can see. If you turn the taps on and water comes out, it’s probably OK. If you flip the switch and the lights come on, ditto. You can’t turn the taps on or flip the switches on plans.
Construction standards are not what you expect
Property in Cyprus – especially new property in Cyprus – is built to standards that amaze people from the UK. Workmanship is shoddy, basic features (like damp-proofing) are missed.
We’ve seen plumbing under sinks held together with sticky tape. And electrical connections made by twisting wires together and then wrapping them in insulating tape. (That one was outside. A bit of rain and you’ll be electrocuted).
The winter of 2008/09 has been one of the wettest in recent years in Cyprus. We see lots of villas, and almost universally they have significant damp problems.
If you’re buying property in Cyprus, get a qualified surveyor (from another town) to check it over carefully. And if you can find a non-Cypriot surveyor, so much the better.
Watch out for the payment terms
If you go down the off-plan route, watch out for the payment terms. It’s normal in Cyprus to make stage payments as work progresses. Only ever agree to make stage payments AFTER the work has been done. And get the work signed off by your surveyor before you part with any money.
Build penalty payments into the contract for late delivery. (It WILL be delivered late. Often by years…) And insist that the penalties are paid to you by the developer as they’re incurred. Don’t agree to letting them roll up and be knocked off the final payment.
As a guide to the amount of penalty payments, legal precedents have been made at the amount of money it would cost to rent a similar property. So for a three bedroom villa, think in terms of €1,200 per month at the time of writing.
Don’t ever believe your villa will be finished on time. It won’t. Not ever.
If you want to live in your property in Cyprus, rent first
If you’re moving to Cyprus from the UK, you’re lifestyle in the sun will be very different to what you know and are familiar with. So rent a place. Decide what you like about the property. Think what you’d want in your own property. Check out the locations and the shopping. Take your time. When you know exactly what it is you want, you’ll find it.
Don’t try and buy property in Cyprus when you’re on holiday. You’ve got the deadline of the flight back, and that’ll make for a situation when you’re putting pressure on yourself. Believe me, the developers hard sell tactics will already be doing more than enough of putting pressure on you, so don’t do it to yourself as well.
In the same line of thinking, don’t ever let developers pay for you to make an ‘Inspection Trip’ – you’re lying down and asking them to walk all over you.
If you want to rent your property in Cyprus, think hard
There’s a glut of holiday villas and apartments in Cyprus. Go and do a Google search for holiday rentals, you’ll be stunned by the amount of unlet properties trying to find renters in the peak summer months.
Also don’t believe the ‘long season to make big profits’ line. Charter flights to and from Cyprus operate mainly from April to September. You need the flights for your customers to get to Cyprus. So when projecting the revenue you think you’ll get, expect a six month letting season. Then with turnover days and the like, expect at best a 75% utilisation during that period.
In basic terms, expect your property to be rented four and a half months a year. And are you planning to take a holiday in it too? If you are, that’s probably coming out of your four and a half months.
Make sure you know all the expenses coupled with your rental property. It’s surprising how all the bills add up. Cleaning, pool maintenance, gardening, maintenance – all go on whether or not the property is let. Agent’s fees, electricity bills (expensive in Cyprus) all add up too.
Remember too that letting in Cyprus is a very competitive business. If you want your villa to rent, it needs to be furnished and equipped to the highest standards. Cutting corners on the equipment you provide and the quality of the furnishings will be a bad move.
In summary, our advice is:
- Only buy something with Title Deeds. No Title Deeds? Walk away, and don’t look back.
- Only buy something that’s finished and you could move into tomorrow.
- Get solid advice from a lawyer and a surveyor every inch of the way. And get them from another town as far away from where you’re buying as possible.
- Take your time. There’s more property for sale in Cyprus than you could ever imagine. It’s a buyer’s market. Don’t let anybody hustle you into anything.
- If you’re planning to live in Cyprus, rent first. Figure out what’s important to you and then go looking.
- If you’re planning to make your property a holiday let, do your sums carefully and only after checking the cost of everything.
If you think the above is scaremongering, or anybody tells you it’s not true, check out the Cyprus Property Action Group and Lying Builder.
Don’t be put off by the above. Cyprus is a beautiful island with a wonderful lifestyle. Tread very carefully, believe nothing developers say, and you’ll be very happy ‘Living the Dream’.