The House of Representatives announced on the 2nd of April a new amendment regarding contracts of sale for real estate. The bill refers to the meaning of practising the profession as defined in the Advocates Law Cap.2. It states that only registered lawyers should draft sale agreements of real estate or other documents relating to property transactions. The suggestion was made by a member of the House and 32 other members voted in favour of it.
The New Bill
This step constitutes a big development in the sector of Real Estate. Up until now, any person could offer advice or draft legal documents regarding renting or buying immovable property. It was often the case that people lacked a clear understanding of the law and were wrongful in its application. This resulted in violations of the rights of the contracting parties. The amendment intends to prevent people who do not possess the necessary expertise on the subject from appearing as professionals.
Lawyers are considered to be experts and have the necessary knowledge and experience to prepare sale agreements or relevant documents. They have the expertise to provide clients with specialised advice on property matters. The lawyers who draft the agreements for tenancy or other transactions of real estate bears the legal responsibility as professionals.
The members of the House highlighted the distinction between a person who seeks professional services and someone who does not. In other words, people can seek friendly advice or gather information from anyone with knowledge of real estate. However, only the documents drafted by a registered lawyer will be regarded as binding.
The members of the House of Representatives are confident that this amendment offers protection for the buyers of real estate. In effect, it saves the buyers from violations of their rights and prevents unfair transactions in favour of the sellers.
Our Expert Team of lawyers
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We can assist in a variety of real estate matters, such as purchase or sale of residential or commercial property, tenancy, mortgages and property transfer or disputes.
Contract of Sale
As a rule, the purchase of property in Cyprus is executed after the interested parties sign a Contract of Sale. The contract terms of such transactions should be negotiated by experienced lawyers acting on behalf of both parties if necessary. When the buyer agrees with the terms of the sale contract, there is no need to involve a second lawyer.
Prior to the enactment of this Bill, the sale agreements were usually drafted by a developer or seller. The terms of such agreements could be modified later. Buyers would often sign the developers' standard contract without taking expert legal advice. This was considered a grave mistake of buyers in Cyprus, as the agreements would often benefit the sellers or developers. The new law amendment purposes to prevent unfair transactions in regards to immovable property.
There are some general points to check before signing a sale contract to make sure the transaction is fair. These include:
- 50% deposit paid on the signing of contracts
- 49% on delivery of property or in stages if under construction
- 1% on transfer of title deeds
To ensure that the buyer is legally protected, the following actions must take place:
- The buyer must sign a valid contract of sale for property free of any legal and financial commitments.
- The contract must be signed, stamped and registered with the Land Office. This prevents the seller/developer from reselling or mortgaging the property before the transfer of title.
- The buyer is entitled to take possession of the property prior to the title transfer.
Originally Published 12 April, 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.