Real Estate Contracts – Safeguarding The Legal Rights Of Contracting Parties

MK
Michael Kyprianou Law Firm

Contributor

The firm, based in Cyprus, has an international presence. Its services include Dispute Resolution, Property, Shipping, Immigration, Commercial and Corporate Law. It is highly ranked by leading legal directories, including Legal500 and Chambers and regularly receives accolades from the Cyprus Government and international bodies, in recognition of its excellent service and commitment to the values of integrity, efficiency and professionalism.
Before addressing the reason that the drafting and reviewing stage of a contract in the Real Estate field is so crucial, it is important to outline, in simple terms, that a contract is a set ..
Cyprus Real Estate and Construction
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Before addressing the reason that the drafting and reviewing stage of a contract in the Real Estate field is so crucial, it is important to outline, in simple terms, that a contract is a set of promises which the law will enforce. Thereby, a contract should be carefully negotiated as to have clear and sufficient provisions that meet the contracting parties' intentions.

For a contract to be effective, it must accomplish numerous things. Firstly, it should protect the interests of the parties involved in order to ensure that they can be protected by law. Secondly, apart from clearly outlining the agreed terms, it must also stipulate what each party is committed to do. Also, as a security, every promise should be written down in the contract in a way that cannot be misinterpreted in order to exclude the possibility of opting out from a commitment. Undoubtedly, a vague contract or an ambiguous provision could be challenged in court.

It is of essence for people to be confident that the contract will be binding, justly drafted and the terms of the contract will cover any event of violation of rights. Importantly, the contract should outline from beforehand the consequences of all events of non-compliance by the other party.

The fact that anyone may assist in the drafting of legal documents of real estate frequently leads people into 'traps' owing to a lack of real understanding of the law, insufficient expertise or inadequate knowledge of their rights and obligations.

Lawyers can draft, negotiate and review the agreements of immovable property, carry out an immovable property's legal due diligence check and assist in the acquisition of immovable property by non-residents in Cyprus. Furthermore, they can offer advice on obtaining the necessary permits related to properties. 

The underpinning idea of entrusting a lawyer in the sector of Real Estate is that high protection will be offered to buyers or sellers and, in practice, it could close the floodgates to real estate disputes. Undoubtedly, violations of the buyers' and sellers' rights could be diminished, and unfair terms could be eliminated.

Recently, there have been attempts in Cyprus to provide lawyers with exclusivity on the matter. On 2nd April 2021, the Cypriot House of Representatives passed a Bill amending, the Advocates Law, Cap 2, regarding a review of contracts of sale for real estate. The amendment suggested that the drafting, review and amendment of sale agreements of real estate and other relevant documentation relating to property transactions should only be completed by registered lawyers. The particular amendment could be viewed as a positive development in the sector of real estate in Cyprus as it could enhance diligence and protect the contracting parties' legal rights. Yet, the amendments to the Advocates Law, Cap 2, adopted just over a month ago have been annulled. It remains to be seen if any further actions will be taken, but nonetheless, the emphasis placed on safeguarding the legal rights of contracting parties in Real Estate contracts is a great turning point. The Cyprus Bar Association has expressed its intention to work closely with the Parliament in order to successfully introduce the desired amending law.

All in all, entrusting people with the appropriate expertise in the Real Estate field could safeguard the contracting parties' rights and mark the end of an era of unbalanced construed agreements with unpredictable consequences. If professionals equipped with the required expertise and knowledge undertake the particular task, there could be a decrease in contract violations and favourable contract terms.

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.

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