Cyprus Property - exchanged but failure to complete - what are the implications - Printable Version
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- BD - 20-04-2010 04:18 PM
I am a new investor and purchased (naively) an apartment in Cyprus (near Larnaca). We have exchanged and documents have been registered at Land Registry. But now I am not in a financial position to complete.
During this period the developer has been receiving staged payments from the bank. What are the implications now if I fail to complete - I have been told as documents have been lodged I would be in breach of contract.
I am in the UK, so does this simply mean the developer keeps the 10% deposit that was used to exchange, and takes back the property. Or can they take further action back in the UK.
I would appreciate any advice.
- Vanessa Warwick - 20-04-2010 04:43 PM
There are no hard and fast rules here as it really depends on how the developer and the bank want to handle it.
You will be in breach of contract if you fail to complete. Technically, your mortgage has already started in Cyprus, so the bank have the possiblity to come after any U.K. assets you hold (worst case scenario). The developer will have acted as a guarantor for you, so they may come after you as well.
The best thing to do is speak to the developer and see if you can come to an arrangement with them, maybe to pay the remainder of the deposit in instalments.
Or you could find someone to JV with you to pay the rest of the deposit. It may be that you can find someone who would not get a mortgage in Cyprus, but who would be interested in contributing some money to get part ownership.
I can direct you to a very good barrister in Cyprus if you would like to get an independent legal opinion. His name is George Kouma and his email is: firstname.lastname@example.org (Tel: +357 24 818 817 )
I also recommend speaking to Helen Eade who is a member here and helps people with problems with overseas property deals.
- Ahmwaah Charles - 21-04-2010 09:24 AM
I know developers in the UK are being very litigious and 'forcing' investors to complete. Not sure how it works over there or under which jurisdiction you'd be viewed.
Talk to the developer, but also try to find a JV partner. If it's a good investment then it won't be too hard to find somebody to put in the cash.
You could try Googling 'Cyprus investment' note the investment companies, give them a call and see if they have anybody on their books who may like to take over your investment.
Let us know what you do.
- Louise Reynolds - 21-04-2010 10:03 AM
Vaneesa and Amwaah's advice is good. I think it depends on what is in your contract and what, as Vanessa says, the developer wants to do, but technically it is likely it is a breach of contract.
As Amwaah says, it may be better for you to try and get someone else interested in putting money in, but the level of attraction for another investor will be how good an investment it is and I would add what the status is on the Title Deeds. Did you use the developer's solicitor or your own independent one? This may affect the length of time it takes for the Title Deeds to be processed and therefore shape your options.
I am an Overseas Property Agent and help people buy Overseas. If you wanted to tell me more off-ine then I can see if I can help. All contact details are on my site and louise@property-venture is my e-mail
- Vanessa Warwick - 17-08-2010 03:54 PM
Could you come back on this thread and let me know what is happening? Have you come to any resolution?