Some greedy developers try to take advantage of owners of property in Cyprus who wish to re-sell their property purchased without a separate title deed. Some of them rely on their dominant position to gain unlawful profit.
Not only are cancellation fees illegal, but also some of the developers claim an enormous amount which cannot even be justified to cover their administration expenses. They even claim cancellation fees near to the amount of the transfer fees and they refuse to discuss their claim.
This issue must be examined by the Cyprus Commission for the Protection of Competition since it appears that there is an understanding and an agreement between many of the developers claiming cancellation fees and the buyers, as consumers, suffer. The issue must also be examined by the governmental authorities with an aim to end this illegal practice.
This situation is exacerbated by the fact that the developers fail to issue separate title deeds on time, creating problems to the purchasers who cannot exercise their property rights; they cannot dispose freely their property purchased and they are stuck. The developers take advantage of this and instead of facilitating the buyer to re-sell his property, they take the good opportunity to reap money they are not entitled to.
It makes no difference if the buyer is an investor or purchased the property for holidays or for residence purposes. The issue is that the cancellation fees are illegally claimed without any consideration.
In most of the sale contracts there is a clause giving the buyer the freedom to re-sell his property, placing an obligation on the vendor to sign a cancellation agreement and a new contract of sale with the new buyer. Consequently, a customer who wishes to re-sell his property should refuse to pay cancellation fees and make the developer undertake his responsibilities under the sale contract and the law. If the developer keeps asking for cancellation fees, the initial owner (buyer) should warn him in writing that if the re-sale is not concluded, he will be kept responsible for damages for breach of contract and for the buyer’s losses and damages. The buyer must consider the re-sale clause as an essential term of the sale contract and rely on it.
Good advice to new buyers is to refuse to sign a sale contract without a clause stating clearly that the developer will not be entitled to claim cancellation fees if the buyer re-sells his property at any time.
Such a clause indicates the credibility of the developer regarding his future intentions of claiming cancellation fees or not.
A developer who refuses to include such a clause in the sale contract should be avoided.
The real estate market offers a great deal of properties adequate to meet the needs of any individual new buyer.
The current economic crisis should have made the developers think professionally and be worried of the situation instead of being short-sighted and looking to gain a temporary and unjust profit. Many developers correctly spend a lot of money on marketing and promotion and some, instead of being firm, protecting their reputation and the property market, later behave arrogantly and greedily claim more money by way of cancellation fees. The issue must be examined seriously by their associations, an action must be taken so that no member of them will claim cancellation fees and furthermore, to undertake at any time to facilitate the buyer to re-sell his property before the issue of the separate title deeds.
A buyer will know from the outset that by purchasing a property in Cyprus, apart from making a good investment, he / she will always be free to re-sell it and the non-issuance of the separate title deeds will not be a problem.
If you are having problems in Cyprus please do not hesitate to contact us.