How to check a Cyprus developer before paying a reservation deposit

1. Identify the recipient

Record the recipient's full legal name, HE registration number and bank details. Compare them with the reservation agreement, receipt and proposed contract of sale.

The marketing brand, contractual seller, landowner and building contractor may be different companies. That is not evidence of a problem, but the documents should explain the relationship.

• Who owns the receiving bank account?
• Which company promises to return the payment?
• Why is that company authorised to accept money for this property?
• Does the HE number match across the documents?

2. Define the property and reservation terms

• The unit number, project, plot and agreed plan.
• The full price and the period for which the property is taken off the market.
• Whether the payment is credited against the purchase price.
• Every circumstance in which the money is refundable or retained.
• The refund deadline if legal or mortgage checks are not satisfactory.

Do not rely on a verbal promise that the payment is refundable. The signed document should state the refund conditions before money changes hands.

3. Check the company and property before payment

• Find the company in the official register and check its status, address, directors and registration date.
• Ask for evidence of the registered landowner.
• Ask about the planning permit, building permit and Certificate of Final Approval where applicable.
• Request an explanation of mortgages, prohibitions and other encumbrances.
• Compare claims about completed projects with independent sources and archived pages.

4. Give the documents to an independent lawyer

The buyer's lawyer should review the document before payment, especially where the money is described as non-refundable. Useful due diligence concerns the particular land, unit and agreement, not only the brand's reputation.

For contracts concluded from 12 December 2023, the seller must attach a Search Certificate for encumbrances and prohibitions dated no more than five working days before the contract. This rule applies to the Contract of Sale and does not replace a review of an earlier reservation agreement.

Warning signs before payment

• The recipient is not identified by its full legal name.
• Payment is requested to an individual or unexplained third-party company.
• The document does not identify the property precisely.
• Refund terms are left to the seller's discretion or stated only verbally.
• The buyer is pressed to pay before their lawyer can review the documents.