(in accordance with the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224)

Pursuant to the powers vested in it by virtue of s.69(1) of the Immovable Property (Registration, Tenure and Valuation) Law, Cap. 224 (henceforth the “Law”), the Council of Ministers may, for the purposes of obtaining an up to date and uniform valuation of immovable property situated in any municipality or community, issue a decree ordering the conducting of a general valuation of such immovable property, carried out at such time periods which shall not, in any case, be further apart than three years from the date of the most recent general valuation, with the first three-year period commencing on January 1st 2018 (being the date of the last general valuation).

Going further, it is worth mentioning that the Council of Ministers reserves the right, to order, at its discretion, the conducting -within the said three-year period- of a general valuation in respect of any specific part of immovable property situated in any municipality or community, notwithstanding whether or not a general valuation was conducted in respect of the immovable property in question.

Importantly, for the purposes of calculating the general valuation of immovable property, the immovable property comprising the subject of calculation is deemed as being vacant.

For the purposes of the Law, a “general valuation” is defined as the valuation of immovable property irrespective of whether or not any valuation or re-valuation was conducted in relation to the said property and irrespective of the date on which such valuation or re-valuation was conducted.

For the sake of clarity however, the general valuation is not equivalent and does not correspond to the “market value” of the immovable property in question. In practice, a general valuation is “general” in that it is carried out en masse, and is calculated by taking into account, not the particular or specific characteristics of each individual immovable property, but rather groups or clusters of real estate with similar natural and legal characteristics.

The update of the general valuation at regular intervals results in the fair and uniform taxation of immovable property and is utilized by authorities such as municipalities, community councils, sewerage boards etc, for the calculation of the fees and levies imposed on real estate. In its press release following the new general valuation of 2021, the Department of Lands and Surveys labelled the general valuation as a “pillar of transparency in the real estate market” in that it offers an indication of the market value and return of immovable property and guidance to prospective sellers and prospective purchasers of real estate, as well as investors in such a significant sector of the economy. 

In accordance with the provisions of s.70 of the Law, where the Council of Ministers has ordered the conducting of a general valuation, the Director of the Department of Lands and Surveys (henceforth the “Director”) must publish in the Official Gazette of the Republic (and in such other newspaper as he shall deem necessary) and post a notice, informing the public that a general valuation shall be conducted, such notice containing details pertaining to the region in respect of which the notice is being given, as well as with regards to the date on which the general valuation shall commence, and shall summon all affected registered owners  to provide the valuer with such information, or written report including such information concerning the immovable property comprising the subject of the valuation as the valuer may require, and to present for inspection by the valuer any document in their possession or control as the valuer shall determine.

Following the completion of the general valuation the Director shall see to it that a notice in the Official Gazette of the Republic is published and/or transmitted by mass communications media, informing that the catalogues (in printed and/or electronic form) have been submitted to the office of the mayor or the relevant municipality or the office of the municipality of the relevant community as the case may be, and send a notice in writing to the owner informing him of the value of the general valuation of the immovable property in respect of which he is the registered owner.

Any person having an interest in any immovable property to which the notice relates may inspect the abovementioned catalogues at reasonable times and the mayor or mukhtar responsible for safekeeping these catalogues must allow, at reasonable times, any such person to receive any extract therefrom or copies of the same free of charge.

In accordance with the provisions of the Law, a valuation carried out by a valuer is rendered final unless any affected person submits before the Director, an objection against such valuation, within six months from the date of publication of the general valuation in the Official Gazette of the Republic (in which case the Director must examine such objection), or unless the Director applies to the Court asking for the valuation to be revised.  

In view of the above, following a relevant order to this end issued by the Council of Ministers, the new general valuation for the year 2021 has been completed by the Department of Lands and Surveys. Prior to the relatively recent amendment to the Law which dictates that general valuations are to be carried out every three years, previous general valuations were carried out much more sporadically, specifically in the years 1920, 1980, 2013 and 2018.

According to the records of the Department of Lands and Surveys, in the context of the new general valuation 1.093.495 plots of land and 566.53 units (including flats, maisonettes and shops) were valued. Interestingly, the aggregate value of the real estate valued is in excess of 186 billion euros, compared to approximately 182 billion euros, being the aggregate value of real estate on 01.01.2018 (being the date of the previous general valuation). As the Department of Lands and Surveys notes, there does not seem to be a great fluctuation between the values of the general valuation dated 01.01.2021 and the values of the general valuation dated 01.01.2018. Modest increases in value were observed in respect of houses and apartments; on the other hand, there was a decrease in value in respect of certain plots of land. More notable increases in value (albeit, as the Department of Lands and Surveys observes, inconsequential) were noted in apartments and houses in the district of Limassol.

Introduction

The extent of property rights with regards to an apartment, and the obligations of the owner thereof in respect of the jointly-owned multi-storey building of which the apartment constitutes a unit, are matters which concern a great number of citizens in the course of their participation in the co-ownership of the building, particularly over the last few years in light of the rapid growth in the construction of multi-storey buildings in and around urban areas.

From our professional experience it would appear, however, -and this is something we can confidently attest to- that, not a lot of apartment owners will take the time to research and identify their rights and obligations in the jointly-owned building, prior to the purchase of an apartment.

The present article seeks to provide the reader with the basic knowledge which every owner or interested purchaser of an apartment should possess in order to safeguard his rights, as well the knowledge that must be possessed by the members of management committees in the exercise of the legal responsibilities, powers and obligations they undertake for the administration of a multi-storey building.

The relevant legislative instrument on the matter is the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224 (hereinafter the “Law”), and more specifically, sections 38A – 38ΛΒ thereof.

Structures considered as jointly-owned

A building is deemed to be jointly-owned, if it comprises of at least five units, notwithstanding that the building itself may be owned by a single person. Whether a building which fulfils the said condition shall be characterised and registered as a jointly-owned building in the land registry, is not a matter for its owner or owners to decide, but rather a legal obligation. Conversely, a building comprising of two and up to four units, is not automatically considered as a jointly-owned building, although it may be so registered in the land registry at the election of its unit owners.

Jointly-Owned Building – Nature of Ownership

The form of horizontal ownership of immovable property created by undivided co-ownership of a jointly-owned building (being the legal terminology used to characterise a building comprising of numerous floors and units – in other words a multi-storey building) is idiosyncratic and dual in nature.

On the one hand it is idiosyncratic as it deviates from the principle of immovable property law enshrined in the latin phrase ‘superficies solo cedit’, meaning that anything situated above the land’s surface belongs to the owner thereof (section 5 of the Law) and has at its core the horizontal division of the building and not of the land. The plot of land on which a jointly-owned building is erected continues to be the subject of undivided co-ownership between apartment owners in perpetuity, depending on the percentage of the share held by each apartment owner in the jointly-owned building, while the provisions of the Law pertaining to the division of ownership of a plot of land owned in undivided ideal shares – which provide for the vertical division of the plot, the right of pre-emption or option afforded to a co-owner for the purchase of a share in the undivided immovable property being for sale etc – are not applicable in the case of a jointly-owned building.

On the other hand, it is dual in nature in that it confers upon the owner of an apartment comprising a unit of the jointly-owned building, exclusive and absolute ownership of the private unit in respect of which he holds a separate title deed, and also undivided, ideal and proportionate share in the jointly-owned property, which is determined by the owner of the plot on which the jointly-owned building is erected (usually a land development company), depending on the value of the unit relative to the total value of all units in the jointly-owned property.

Apartment – Nature of Ownership and Area

Each apartment or unit in a jointly-owned building, belongs to, is occupied and enjoyed by, the owner thereof as private property, in respect of which a separate certificate of registration of immovable property (title deed) is issued following its registration, in the land registry, which includes the details of the unit (usually including, the parking space or spaces and the storage area corresponding to each unit, and the area thereof etc), any limited jointly-owned property exclusively allocated as part of private property (for example roof for the creation of a roof garden or swimming pool), the share in the jointly-owned property corresponding to the unit, as well as the joint rights of co-owners in relation to the jointly-owned building.

The area of an apartment, consists of the covered area surrounded by the apartment’s exterior walls, including covered and uncovered verandas. Common walls between adjoining apartments or between an apartment and the jointly-owned property, are evenly distributed between them. The caselaw of the Supreme Court repeats the provisions of the Law and expressly asserts the position that the exterior walls of an apartment, constitute jointly-owned property and, as such, fall under the administration (but not ownership) of the management committee of the building. For instance, according to caselaw, the installation of a smokestack on the exterior walls of a building, does not constitute trespass on the property of the apartments on the walls of which it was installed. Such an installation would, however, constitute trespass on the jointly-owned property, if it was placed without the previous approval of the management committee, and it would be up to the management committee to commence legal proceedings in case of non-compliance, for the purpose of obtaining the necessary court orders for the trespass to stop.

Each apartment owner may carry out amendments, additions or repairs to his unit without the approval of the management committee or of the other co-owners, provided that the said works shall not in any way affect the functionality or enjoyment of the jointly-owned property by the co-owners thereof, and shall not infringe the rights of the owner of any other apartment.

Jointly-owned property – Rights of Co-owners

Whilst the jointly-owned property is administered by a management committee, it belongs to, is occupied and enjoyed by, all apartment owners in undivided ideal shares. In this respect, any act by the management committee or by a co-owner, pursuant to which the expulsion or exclusion of another co-owner of his property is sought, or the deprivation of his right to occupy his property, constitutes a trespass in his jointly-owned property rights, giving rise to a cause of action against the wrongdoers. The installation of a smokestack on the exterior wall of a multi-storey building was held not to be equivalent to expulsion or deprivation of a right to occupy property. On the contrary however, the installation of stakes on a pavement in a manner as to obstruct the free passage of a co-owner to the building’s parking area, was deemed to be a violation of the said private rights of a co-owner to a multi-storey building, thereby recognising that the latter had a cause of action as against the trespassing co-owner. Of course, in such a case, the management committee in its capacity as the administrator of the jointly-owned property, would also have a cause of action since the trespass would occur on jointly-owned property.

The insurance of a jointly-owned building against the risk of fire, thunder and earthquake is imposed and mandated by law. The responsibility for insuring the jointly-owned building rests with the management committee which decides for the insurance amount in relation to the value of the building’s replacing in case of total loss. In respect of the jointly-owned property’s insurance against any other risk (in addition to the ones referred to hereinabove) the consent of a simple majority of its owners is required, that is a percentage in excess of fifty per cent (50%).

Jointly-owned property – Regulation and Management of its Affairs

It is well known that the regulation and administration of the affairs and matters of a jointly-owned building, fall within the scope of the responsibility and duties of the management committee, the election of which is mandated by the Law.

The control, operation, administration, management and use of the jointly-owned property as well as the relationships between the apartment owners and their rights and obligations in respect of the jointly-owned building, are governed and regulated by regulations which may be registered in the land registry.

Template regulations for the management and regulation of the affairs of jointly-owned buildings are contained in the Law, which apply automatically and are regarded as registered in respect of jointly-owned buildings not having registered custom regulations. In most cases, management committees elect to adopt the template regulations which are included in the Law since the said regulations are quite comprehensive and detailed with regards to the regulation of the affairs of the jointly-owned building, and in so doing, avoid engaging in a time consuming and burdensome process of discussing and drafting custom regulations. The regulations of a jointly-owned building may be amended, revised, replaced or repealed, by a decision of at least seventy-five per cent (75%) of apartment owners.  

Management committee – Election

The first management committee of a jointly-owned building is elected, and the number of its members determined, at the first annual general meeting of apartment owners of the jointly-owned building. With regards to the manner of calling of the first general meeting in the absence of a management committee, (since its composition is determined at the first general meeting), the Law does not provide express guidance. Nevertheless, the Law allows for the appointment of a stand-in or temporary management committee, if so requested by the apartment owners who applied for the registration of the jointly-owned building (the number of owners required for such an application is not prescribed in the Law). It is submitted, that this may be the most legally sound and appropriate process for convening and attending the first general meeting for the purpose of electing the first management committee.

In practice, however, the convening of the first owners’ general meeting, which must take place within three (3) months from the date of registration of the jointly-owned building to the land registry in accordance with the template regulations, is arranged and coordinated by the land development company which constructed the building, or by the first owners thereof following an understanding to this end between them or with the assistance and guidance provided by external consultants (such as lawyers or companies offering building administration services etc). At this juncture, the care and diligence which must be exercised by the persons taking the initiative to convene the general meeting cannot be overstated, since the unlawful convening or calling of a general meeting, may result in the invalidation from the outset of the appointment of the management committee and of the actions or decisions taken by the management committee following its appointment. It therefore follows that it is imperative that apartment owners be provided with sound advice and guidance in respect of the actions which they must undertake for the calling and convening of the general meeting.

Management committee – Legal status and task

In the course of managing and regulating the affairs and matters concerning the jointly-owned building, the management committee, which constitutes a body recognised by Law, always acts on behalf, and for the benefit of the owners of the apartments comprising the jointly-owned building, having extensive responsibilities the scope of which is determined by the Law and the regulations concerning the regulation and management of the jointly-owned building.

The main objective, mission and obligation of the management committee is to control, operate, administer and manage the jointly-owned property, taking decisions and doing any deeds or acts which are necessary for the purpose of ensuring conformity with the provisions of the Law and of the regulations governing the management and operation of the jointly-owned building.

Management committee – Powers, responsibilities and obligations

The management committee has the power to bring a claim against any owner, occupant or third person in respect of matters or issues regarding the jointly-owned property, including cases relating to the causing harm or damage to the jointly-owned property, or in respect of overdue contributions towards common expenses owed by an owner. The management committee also possesses the power to enter into contracts in respect of any matter relating to the maintenance and management of the jointly-owned property. In the context of its obligations, the management committee must implement measures and ensure that the jointly-owned property remains in good and functional condition, undertaking the maintenance thereof and of any part, component, fixture or fitting thereof, as well as to enter into an insurance contract for the benefit of the jointly-owned building with a licensed insurance company.

Additionally, the management committee may establish and maintain a fund, which is, in the management committee’s opinion, sufficient for the purpose of covering the expenses relating to the control, operation, management and administration of the jointly-owned property for the payment of insurance premia and for the performance of the responsibilities, duties and obligations of the management committee. The fund maintained by the management committee, is financed by the apartment owners, usually in the form of monthly contributions imposed by the management committee.

Management committee – Management of expenses and owners’ contributions

One of the most important issues arising in the context of the management of jointly-owned buildings, relates both to the obligation of owners to make financial contributions towards covering the necessary expenses regarding the jointly-owned property for the security, maintenance, repair, restoration and management thereof, and to the extent of the said obligation.

It should be noted from the outset, that the proportion of each owner’s share in such expenses, is determined on the basis of the area occupied by each apartment. As has been recognised by caselaw, the obligation of an owner to contribute towards the necessary expenses pertaining to the management of the jointly-owned building in general is absolute and DOES NOT cease to exist nor is it extinguished merely because the expenses in question relate to services or facilities of the jointly-owned building not being used or enjoyed by an owner. To take an example, the owner of a ground floor shop is not released from the obligation to contribute to the maintenance of the building’s elevator, notwithstanding the fact that the elevator is not being used by the said owner or by his customers. In addition, all owners of a building complex being entitled to use a swimming pool located within the building complex, are under an obligation to contribute towards the expenses regarding the maintenance of the swimming pool, despite the fact that they may not, in fact, be using it. Conversely, in the case of co-owners not having a right to use the swimming pool, or in the case of a swimming pool which has been constructed illegally, the owners are under no obligation to make contributions.

The obligation of an apartment owner to contribute towards the necessary expenses regarding the jointly-owned building, continues to apply even in the case where the apartment is occupied and used by a third person, residing in the apartment. Importantly, the fact that an apartment remains unused or vacant for any period of time, does not absolve the owner of the said apartment from the responsibility to comply with every obligation emanating from the regulations governing the regulation and management of the affairs of the jointly-owned building, including contributing towards necessary expenses.

Management committees should be especially cautious when taking decisions resulting in the creation of expenses for the performance of construction works in the jointly-owned building. This is attributable to the fact that not all expenses concerning the maintenance or restoration of the jointly-owned building are recoverable from apartment owners. Any such expenses should be necessary for the maintenance, repair or restoration of the jointly-owned building. For instance, the construction of a swimming pool would not constitute a necessary expense for the purposes determined by the Law.

Similarly, the cost for the performance of refurbishment works in the jointly-owned building in such manner as to satisfy the aesthetic preferences of certain owners, would not be considered as necessary for the purposes of maintenance, repair or restoration of the jointly-owned building.

Management committee – Administration of common areas

A matter which often arises and relates to the administration and management, by the management committee, of common external or underground areas within the jointly-owned building, which, in most cases, are being used as parking spaces, also falls within the same context pertaining to the powers vested in management committees. The issue that arises relates to cases where there are no pre-determined parking spaces assigned for each apartment (this is especially prevalent in old apartment buildings) or where there is additional open space which the owners or occupants of the jointly-owned building are using as parking space for additional vehicles either of themselves or of their guests. In such a case, whilst the management committee does have the power to regulate the manner in which the available open space comprising part of the jointly-owned building under its administration shall be utilised by owners or occupants, the terms of use that shall be imposed must strike a balance between the rights of the owners and must not, under any circumstances, have the effect of limiting, or intervening with the exercise of, the property rights in the jointly-owned building, that all owners without exception are entitled to enjoy, whilst they must not be more favourable for certain owners to the detriment of the remaining owners and be proportional to the purpose they are seeking to attain. Ideally, and by way of advise to management committees, such terms which may potentially affect the enjoyment or interests of co-owners -and the imposition of which cannot be safely assumed as falling within the powers of the management committee- would be preferrable and safer to be incorporated in the regulations of the jointly-owned building by means of a special amendment, following a decision to this end of 75% of the owners.

Management committee – Term and Financial Reporting

The term in office of the management committee extends to about one year; more specifically its duration spans between the annual general meeting at which it was elected, until the following annual general meeting during which a new management committee is elected. It is worth noting that the annual general meeting of the owners of the jointly-owned building is convened once every year and in any event, within fourteen (14) months from the previous annual general meeting. The decisions of the management committee are taken by a simple majority, whilst the president of the administration of the management committee does not hold a casting vote.

The management committee is under an obligation to maintain statements of income and expenditure and submit them, together with all receipts and supporting documentation, before the annual general meeting of the jointly-owned building for approval. The statements of income and expenditure are subject to inspection by any owner who submits a request to this end, provided that he does so within a reasonable time.

Property Management Companies

In accordance with the template regulations governing the administration and operation of jointly-owned buildings, the management committee may employee persons or representatives and pay to them reasonable remuneration, as the management committee shall deem necessary. It is on the basis of this regulation that, especially in the last few years, management committees resort to the appointment of property management companies, which possess both the experience as well as the means and requisite personnel to enable them to manage the affairs of a jointly-owned building in a more organised, efficient and effective manner.

In certain cases, a false impression or understanding is created among apartment owners, that property management companies essentially replace the management committee in the control, management and administration of the jointly-owned building. In this respect, it ought to be stressed that, property management companies ONLY act as service providers and representatives of the management committee and the extent of the powers vested in them, is exclusively derived from the agreement they have entered into with the management committee. For example, property management companies have no power to bring a claim against an owner of an apartment who has not paid his respective contribution to the jointly-owned building’s fixed fund. This power as well as the right to the cause of action, is solely and exclusively vested in the management committee. In other words, any act undertaken by a property management company, is done for and on behalf of management committee under the instructions of which it operates.

Opinions and Suggestions

To sum up, we are of the opinion that the legislation relating to jointly-owned buildings must be reviewed and updated, having regard to the obvious increase in citizens seeking housing and accommodation in apartments and apartment buildings, many of which now comprise of multiple storeys and a plethora of apartments.

A crucial matter that warrants legislative regulation relates to the stricter supervision of management committees and/or companies providing property management services, for the purpose of ensuring that -in exercising their duties, powers and responsibilities- they conform with and/or act diligently towards the faithful observance of, the building’s regulations, particularly, for the purpose of confirming the structural safety and integrity of the building for the avoidance of accidents, and additionally, towards ensuring that the contributions of owners are not subject to mismanagement or abuse. Yet another matter of grave significance which requires legislative intervention, is the omission or intentional avoidance of payment, by certain owners, of their contributions towards covering the expenses of the jointly-owned property, who often seek to exploit to their advantage, either the fact that they are residing abroad, or the fact that the resources of management committees may not always be sufficient to cover the expenses associated with the commencement of legal proceedings against any such owner etc. Management committees would like to see the Law containing provisions allowing for the imposition of effective enforcement measures on the owner or owners refusing or omitting to pay their corresponding contribution without justification, such as conferring on the Management committee the power to restrict, via the Land Registry, the right of the owner or owners refusing or omitting to pay their corresponding contribution without justification, to dispose of their apartment unless and until all outstanding contributions pertaining to the said apartment are settled in full. Unfortunately, however, at this moment in time, Management committees cannot rely on any legislative provisions to this end.

Suggestions for the updating and improvement of the legislative framework governing jointly-owned buildings are as frequent as they are interminable. Whilst this is an issue that warrants the kind of meticulous analysis that falls outside the scope of this article, our intention is to offer our views on the subject in subsequent articles.

Like all of Cyprus, the capital city of Nicosia is rich in history; but Nicosia is unique in the fact that it is Europe’s last divided city. Whilst East and West Berlin was once again reunited with the fall of the Berlin wall in 1989, Nicosia has remained split.

Nicosia has been the capital of Cyprus since the 10th century AD and it is such a diverse city. It has a certain charm that you simply cannot find anywhere else in the world. Around every corner it’s as if you’ve been thrust into another world. From the ancient and quaint old town, to ultra-modern buildings befitting any European capital city, delightful coffee houses and boutique shops to derelict buildings left untended since the war in 1974. Nicosia is a city you could easily love, despite its peculiarities.

A city of two halves

Part of the strangeness of this city is of course due to the division. When Turkey invaded Cyprus in 1974, around 38% of the island came under Turkish occupation. Hundreds of thousands of Cypriots suddenly found themselves homeless, becoming refugees in their own country.

Where the Greek Cypriot zone ends and the Turkish Cypriot area begins, happens to be right in the middle of the city of Nicosia, dividing the city into the Greek South and the Turkish North. To begin with, a physical wall was built to clearly delineate the two sectors, but in 2008, by mutual agreement, parts of the wall were removed to allow movement between the two areas, however, the division between the zones is still very clear. It is though, easy to pass from one zone to the other, and many tourists do take the opportunity to cross the border and experience both sides of Nicosia.

Today Nicosia is a fascinating place to visit

These days, Nicosia has everything to offer that you’d expect from a modern city. Many big Cyprus corporations house their headquarters in the city so you’ll see some stunning ultra-modern buildings, state of the art malls and great restaurants. When these modern structures sit side by side with beautiful ancient architecture and the city walls, it truly is an eclectic mix that’s incredibly photogenic and a truly intriguing and compelling place to spend your time.

A thriving business environment

The business world is flourishing in Nicosia, as more companies become established in this blooming city. If you’d like to learn more about Cyprus, and living and working on the island, then do contact us for more information and our invaluable advice. It could be the first step on an amazing journey.

A title deed (or certificate of registration of immovable property) is an official document issued by the Department of Lands and Surveys, evidencing ownership of the legal title in an immovable property in the Republic of Cyprus. The title deed contains a description of the property in question, including, among others, its registration number, details of the registered holder and of his share in the property, as well as any notes or remarks relating to the existence of any encumbrances, charges, or rights of third parties burdening the said property.

Usually, the title deed reflects the current state of the immovable property, however, it is conceivable that, following some form of development which occurred after the issuance of the original title deed, the property has acquired certain characteristics which render it substantially different from its previous state. That would be the case where, for example, the owner of a plot of land decides to construct a residential unit within the said plot. The intended development would clearly alter the status of the property from a ‘plot’ to a ‘residence’. In such a case, the title deed originally issued would no longer reflect the status of the property. In order to proceed with the construction of any building within the plot, the owner would be expected to apply to the competent authorities for the issuance of a planning and building permit.

Provided that abovementioned planning and building permits have been issued and that the construction of the building is completed in accordance with the terms of the said permits, a certificate of approval is issued by the competent town planning authority following a relevant application to this end by the owner of the immovable property. A certificate of final approval attests to the compliance of a recently completed building or construction with the terms of the approved planning and building permits that have been issued in relation to a proposed development within the immovable property in question; it serves as a confirmation that there are no material derogations, inconsistencies or disparities between the information provided to the competent authorities with regards to the manner of construction of the buildings (by reference to the architectural plans that have been submitted in the context of the application for the issuance of a planning and building permit) and the manner in which the buildings were actually constructed. In this respect, it is worth mentioning that the issuance of a certificate of approval is a prerequisite for the issuance (or update) of a title deed relating a particular immovable property within which any building or construction has been erected.

The certificate of approval assumes particular importance where the purchase in question relates to immovable property consisting of a house or apartment comprising part of a larger building complex to be constructed, or which has only recently been constructed, and in respect of which a title deed has not yet been issued by the Department of Lands and Surveys. To take an example, let us assume that ABC Constructions Ltd, a land development company, proceeds with the purchase of a plot of land for commercial exploitation purposes. At the time of the purchase of the plot by ABC Constructions Ltd, the description contained in the title deed refers to a plot of land. Let us now assume that ABC Constructions Ltd has decided to proceed with the construction of a building project within the plot, which shall comprise of a block of flats each consisting of several apartments for residential use. Following the issuance of the relevant planning and building permits relating to the building project, ABC Constructions Ltd begins to advertise the properties for sale. John decides to proceed with the purchase of one such flat and enters into a sale agreement with ABC Constructions Ltd to this end.

At the time the sale agreement between John and ABC Constructions Ltd is signed, there is no title deed with regards to the property purchased by John. In this respect, pursuant to the terms of the sale agreement, ABC Constructions Ltd assumes an obligation towards John to arrange for the issuance of a certificate of final approval upon completion of the property and the issuance of a separate title deed in respect of the property shortly thereafter. To this end, following the construction of the project and the submission of an application to the town planning authority for the issuance of a certificate of approval by ABC Constrictions Ltd, an inspection shall be carried out at the plot by the competent town planning authority to ascertain that the construction of the project adheres to the terms of the planning and building permits and the approved architectural plans.

A certificate of approval may be issued without any notes, indicating that the construction of the building corresponds to the terms of the approved architectural plans and permits. At the same time, it is possible that following the inspection, the competent town planning authority is of the opinion that whilst the construction generally adheres to the terms of the planning and building permits, it also contains certain insignificant or inconsequential discrepancies. In such a case, a certificate of approval with notes shall be issued, stating the discrepancies in question and requiring that these be rectified within a prescribed timeframe. In the event, however, that the competent town planning authority is of the opinion that the construction is not in conformity with the terms of the approved architectural plans and planning and building permits, it may proceed to issue a certificate of non-authorised works, in which case, the owner’s right to dispose or mortgage the property shall be restricted.  

From the perspective of an interested purchaser, it is therefore essential -in the absence of an updated or new title deed- to ask the seller to provide, among other documents, copies of the approved architectural plans and building and planning permits relating to the development in question. Assuming that the property comprising the subject-matter of the sale agreement is not completed at the time the sale agreement shall be signed, it is imperative for the agreement to contain a clause imposing on the seller the obligation to procure, within reasonable time following the completion of the property, the issuance of a certificate of approval and the issuance of a separate, new or updated title deed, as the case may be, with regards to the immovable property comprising the subject-matter of the sale agreement. On the other hand, when the subject-matter of the contact concerns the purchase of a property which is already constructed and in respect of which the title deed has not yet been issued, the purchaser should always ask the seller to provide the certificate of approval to make sure that there are no discrepancies pertaining to the construction of the building.