[BUYING AND SELLING REAL ESTATE IN CYPRUS]
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This amendment ensures that once contractual obligations are fulfilled, the property will be transferred to the buyer, with particular attention to cases involving properties with existing mortgages. Assignment Agreement . This is typically when the property is a resale, and the separate title deed did not issue yet. The assignment of a contract of sale has the purpose of assigning the existing legal and equitable rights of the property in question over to the new buyer. By assigning the rights to the new buyer, the ownership of the property is effectively transferred to the assignee, who shall henceforth have all rights, including the issuance of the title of the property in his name. The said assignment agreement must be duly stamped in accordance with applicable law and must be submitted to the relevant District Land Registry where the property is situated. Stamp Duty: The sale contract or the assignment agreement must be stamped by payment of the applicable stamp duty calculated on the purchase price (at a rate of 0.15% for €5.001 - €170,000 and 0.2% from €170,001 and over). Stamp duty is customary to be paid by the purchaser. C. Real Estate Agents It is common for real estate agents to be involved in real estate transactions. The estate agent profession is regulated in Cyprus and under the law the existing estate agents’ fee cannot exceed 5% of the sale price plus VAT. The customary is for the agent’s fee to be paid by the seller (except where agreement exists for other arrangement). D. Buyer’s Inspections – Property Due Diligence Prior to closing, buyers retain the right to inspect the property with their consultants. The buyers may also employ qualified engineers to carry out
structural or surveyor to verify the market value of the real estate. It is strongly advisable to conduct a due diligence on the ownership status of the property. Among other checks, the process includes review of a recent official Recent Land Registry search certificate, and copies of the planning and building permits. Where the property purchased includes a building, expert opinion (from architect or civil engineer), is also advisable to be obtained. E. Forms of Ownership Real estate in Cyprus may be owned by a single person, or more persons collectively, it may be leased, and it may be placed under a trust. Ownership of the whole Where one single person owns real estate property, that person is registered with the Land Registry as the sole owner of the whole of the property. The Land Registry issues a separate title deed in the owner’s name showing him as owner of the whole 1/1 share in the property. Ownership of shares Where real estate property is owned collectively by more than one person, they are registered with the Land Registry as co-owners of the whole of the property, with each of them as owner of a specified share in the property (e.g., 1/2, 3/4, 4/56 as they case may be Separation/allocation agreements are possible to be concluded, to designate and regulate the co-owners’ rights over the different parts of the property. The co-owners can together lease or sell the property. Each of them has the right to mortgage or sell his share, subject to the rights of first refusal provided under the law for the other co-owners. Leasehold Ownership Leasehold Ownership confers on the Leasehold title deed holder those rights which are provided in the lease which is deposited with the Land
ILN Real Estate Group – Buying and Selling Real Estate Series
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