A property developer organises the creation and development of a property, from the initial concept and rights to the land through to financing, design, construction and sale. The developer may appoint a contractor to carry out the building work and an estate agent to arrange viewings. The company whose logo appears on the brochure, the construction company and the seller named in the contract may therefore be separate legal entities.
Start by identifying who has committed to each specific promise in the contract. The law and the circumstances of the transaction may create additional duties and liabilities. A company's obligations depend on both the agreement and the applicable rules. Establish who must hand over the apartment, who can approve changes to materials and on what basis payments are accepted.
This guide is for homebuyers in the areas of the Republic of Cyprus controlled by its government. It will help you assess a new-build offer and prepare questions for the seller, your lawyer and your technical adviser.
Who does what in a development
An advertisement may use the word “developer” to describe the landowner, the business organising the development or the seller. Check the documents to establish the company's actual role. The developer, landowner, contractor and seller may be separate parties, or one party may perform several functions. As a buyer, you need to know who each participant is and the basis on which they act.
The people and companies behind the Garden development
Imagine buying an apartment in Garden, a development marketed under a group brand. Follow the buyer's enquiries from identifying the participants to checking a payment request and the developer's track record.
- Company A—the landowner. It owns the plot, while Company B is named as the seller in the draft contract. Verify A's ownership and the basis of B's involvement.
- Company B—the developer and proposed seller. It defines the product and organises financing and delivery. The draft contract names it as the party taking on obligations to the buyer. Establish its basis for selling the apartment, check its full legal name and the signatory's authority, and review the obligations it accepts.
- Architect C and Engineer G. They design the development and carry out technical tasks commissioned by the project team. Clarify their scope of work and which versions of the plans apply to the apartment.
- Company D—the contractor. It carries out construction under an agreement with the project team. Confirm who is actually building the development and which registration and licence requirements apply to the work.
- Agent E. The agent arranges viewings and helps the buyer communicate with the seller, acting within an agreed remit. Establish whom the agent represents and which terms they are authorised to agree to on that party's behalf.
- Company H—the proposed payment recipient. Its bank details appear on a payment request, and it proposes to receive money in place of Company B. Check its authority to receive the funds, the effect of making that payment and how the arrangement fits the transaction.
- Independent lawyer F. The lawyer reviews the legal aspects of the transaction on the buyer's instructions and represents the buyer within an agreed scope. Clarify their independence, any potential conflict of interest, the checks they will carry out and the advice they will provide.
- Technical adviser I. This specialist assesses the property's condition and characteristics under a separate appointment by the buyer. Agree the scope of the inspection, access to structural elements and the limitations of the report.
Use this list to make sense of the offer. Your lawyer checks the legal basis of the transaction against the documents. Update the list if Company A becomes the seller or the contractor changes. A lawyer or technical adviser needs a separate appointment to act for the buyer.
The developer and contractor perform different functions. The developer organises the creation of the property; the contractor carries out the building work. Under the standard regime in Cyprus, a construction company needs registration and an annual licence, with the class and category of work also relevant. The licence concerns the contractor's eligibility to carry out the work. Assess the seller's financial position separately. Source: Cyprus government business portal—contractor companies.
Estate agency activity also differs from selling one's own property. The requirements depend on the activity actually undertaken and the exemptions provided by law. Check these against the company's role, whatever label it uses on its website. Source: Estate Agents Law 71(I)/2010, sections 17 and 33.
Turning an advertising promise into questions
The advertisement for Garden reads: “Apartment direct from the developer. Fully finished, parking space included, handover by the end of the year.”
Break this down into property specifications and a party's commitments. For the apartment, establish what the finish includes and the location and terms of use of the parking space. For the deadline, ask what event the seller treats as handover. Then establish whether Company B commits to providing everything listed and where those commitments are recorded. When comparing two offers, gather the same information for each.
How a developer brings a project to completion
A developer's work begins before construction starts. The developer defines the product and its audience: what kind of housing to offer, who it is for and where it can be built. They assess feasibility, arrange financing and organise delivery. Coordinating the team is part of this business role. Funding may come from the developer or external sources, while each participant's obligations need to be established individually.
A project manager or an appointed development manager carries out agreed management tasks. Clarify the scope of each appointment: management tasks and business decisions for the development as a whole may sit with different parties. Source: professional interview on the role of a developer.
For a buyer, it helps to understand what each stage should establish.
- Rights to the land. This stage establishes the basis on which the participants can proceed with the development. Ask: “Who owns the land, and how is the seller connected to the owner?”
- Concept and budget. This defines the housing, the scope of the development and the funding arrangements. Ask: “What is being developed, and who is organising its completion?”
- Design. This produces plans and technical solutions. Ask: “Which version of the plans applies to my apartment?”
- Permissions. This establishes which permissions have been obtained and what work they cover. Ask: “What has been granted, what has only been applied for, and which conditions remain outstanding?”
- Construction. This involves carrying out and supervising the work. Ask: “Who is the contractor, and who confirms that each stage is complete?”
- Sale and handover. This brings together the property to be delivered and the obligations to the buyer. Ask: “What will I receive, what will be included, and what steps will remain after I get the keys?”
Some of these processes may run in parallel.
In Cyprus, planning permission and building permission are separate procedures. Special arrangements and exemptions may apply depending on the work. Ask for specifics when someone says “all the permissions are in order”: which documents cover this plot, this building and this version of the design? Where a participant relies on an exemption, have its basis checked. Sources: planning permission, building permission.
An application and an issued permission have different statuses. Ask where the application stands. A photograph of the façade shows visible progress; the documents establish the property's legal status.
Receiving the keys and having ownership registered in your name are also separate steps. Deposit of the sale contract with the Department of Lands and Surveys provides a mechanism for protecting the buyer. Registration of ownership in the buyer's name is a separate action. Sources: Cyprus Department of Lands and Surveys—sale contract, Law 81(I)/2011, sections 2, 5 and 7.
What to check, from the brand to the payment recipient
Begin with three questions: which company is involved, which property is being offered and who accepts the contractual obligations? Answering them usually requires several documents.
An official company registry search provides identifying information about a legal entity. Use it to check the company's details, then investigate land rights, the signatory's authority and the seller's ability to perform the contract separately. Source: Cyprus Registrar of Companies—business entity search.
Use this checklist to assess the offer and prepare for the contract:
- Participants and authority. Record the brand separately from the seller's full company name or personal name. For a company, check its registration number and official registry details. Identify the landowner, the seller's basis for selling the selected property and who has authority to sign the contract.
- Apartment and specification. Match the plot, block, floor, apartment number and versions of the plans. Clarify finishes, equipment, parking and other included items, additional costs and the process for agreeing substitutions. Use the property's specific identifiers alongside the development's marketing name.
- Permissions and construction. Establish which permissions have been issued, what work they cover and what remains under review. Identify the actual contractor, check the applicable registration and licence, and clarify who supervises construction and confirms completion of each stage.
- Handover and changes to the timetable. Define the event that counts as handover, the deadline, the conditions for extending it and the consequences of delay. Establish which technical and registration steps will remain after you receive the keys and who will carry them out.
- Payments and reservation. Check the recipient, bank details, payment reference, the basis for each instalment and how the relevant construction stage is verified. Before paying, establish how the amount will count towards the price, when it is refundable and who must refund it. If the recipient differs from the seller or the land is mortgaged, have your lawyer review the full payment arrangements.
- Quality and defects. Agree the scope and limitations of an inspection with an independent technical adviser. Check the contract for who receives defect reports, how to submit them and the timeframes for reviewing and resolving them.
- Your representatives. Agree the scope of work and deliverables with your own lawyer and technical adviser. Establish which professionals are acting in your interests.
Use the checklist in discussions with the seller and your advisers. For each point, record the responsible party and the document supporting the answer.
One company sells the apartment; another requests payment
Return to Garden. The contract names Company B as the seller, but the payment request gives Company H's bank details. Agent E, who showed the apartment, remains the intermediary. Company H proposes to receive the money.
The different names mean you need to establish the recipient's authority. Even with written instructions from the seller, the full effect of the payment needs to be assessed. Before the transfer, your lawyer should establish why H is entitled to receive the money, how it will be credited under the contract with B and who must refund it if the agreed refund conditions arise.
If the property is mortgaged and the Form A mechanism applies, the prescribed payment procedure also needs to be checked. The law links it to a particular seller's account identified in the written declaration. Before paying a third company, establish whether the buyer protection available under this mechanism will remain in place. Your lawyer should check whether the mechanism applies to your transaction and verify the account details. Source: Law 81(I)/2011, section 5(2A).
Assess the extent of the bank's obligations and the arrangements for completing the development separately.
How to assess a developer's track record
A list of completed developments helps you understand what the participants have done before. To assess that experience, establish their roles: who organised the development, who built it and which company was the seller.
Look for experience relevant to the property on offer. A completed apartment building gives you more to discuss when assessing a similar scheme than an attractive rendering of a future development. Check the new development's permissions against its own documents.
- “We have already built homes like these.” Ask for addresses, dates and evidence of the specific parties' involvement. Review the documents and obligations for the current development as well.
- “Our finishes are high quality.” Look at the visible quality of completed homes and discuss the inspection needed with an independent technical adviser. Record the limits of the inspection and access to structural elements, as hidden defects may remain undiscovered. An inspection of an older building provides findings about that building and the elements accessible at the time. Check what is included with your future apartment against its specification and assess quality as work progresses.
- “We deal with defects after handover.” Ask who is responsible, how owners report problems and for anonymised examples of resolved cases. Review the commitments made by your own seller.
- “Buyers in our developments receive their ownership documents.” Ask for verifiable information about the properties concerned. Check the status of your selected apartment and the basis for the stated timetable.
- “A large group stands behind the development.” Examine the links between the companies and any documents supporting a claimed guarantee or other security for the obligations. Establish who is responsible to you and the extent of that responsibility.
When visiting an occupied building, ask residents about handover and how their concerns were handled. The current condition of common areas also reflects subsequent maintenance. Establishing the causes of defects and who is responsible may require both an inspection and a review of the documents.
A group's experience: a completed building and a new development
The group shows the buyer a completed building called Park. The entrance is well maintained, and residents speak positively about the service after handover. The buyer, however, is considering an apartment in Garden, where Company B is the named seller.
Park offers useful evidence of experience once the group's involvement has been established. Garden needs its own document review: the seller's identity, its basis for acting, the permissions covering the plot and the commitments in the contract.
If Company B was set up for Garden, connect the group's experience to the actual participants in the new development. Also establish who provides any security for the seller's obligations and check the separate contractual documents that may underpin it.
Turning answers into contractual commitments
The outcome of the checks should be a clear set of contract documents recording the agreed terms. A promise to deliver an apartment “fully finished” should specify the work, materials, equipment and process for making changes. Review the answers alongside the contract and its attachments with your lawyer.
Any warranty promise should identify who gives it, what it covers, when it starts and how to make a claim. Consider contractual warranties and statutory remedies separately. Establish the time limits and scope of protection for your transaction under the contract and applicable rules.
Refer unclear answers and unresolved relationships between participants to the relevant adviser before taking on commitments affected by them. Together, the participant list and checklist help you identify who is promising the result and the documents supporting that promise.
