Cyprus Property Lawyers: Due Diligence

Due Diligence

Due Diligence, Land Searches and Specific Performance

Before you sign any contracts, before any money is paid to a developer, there is one more specific action which you should instruct your independent Cypriot lawyer to perform on your behalf.

You should instruct him to perform a search in the district land registry office, to check the land and the property you are purchasing for loans, memos and encumbrances.

Your lawyer should do this as a matter of course but you as the purchasing party should insist that this is done and that no funds are released to the developer until the search has come back… in the event any funds are paid to the developer, these should be refundable in the event that the due diligence shows that the purchase cannot proceed.

The reason due diligence is performed is to ensure that no previous loans, memos or encumbrances on the property or loan will cause you the purchaser as an issue.\

It is common in Cyprus for such loans as developers might have taken a loan to purchase the land or to finance the construction. However just before delivery the search must be clear of all of the above and if there is still a loan then the developer must give a waiver to the client on delivery.

If a loan / memo or encumbrance is identified on the property then steps should be taken to ascertain who the ‘owner’ of this is. Once this has been identified if this is belonging to the developer, a waiver from the mortgaging bank should be obtained prior to your purchase to ensure that this loan will not be able to effect your rights to your property.