A Recent Significant Court of Appeal Decision on Property Purchases: Legal Insights for Buyers
June 5, 2024
By Neophytos Hadjiloizou (Managing Director – Partner)
In a recent landmark case reviewed by the Court of Appeal (dated 04.06.2024), the buyers of an apartment in a building in Larnaca – Cyprus succeeded in overturning a first Instance Court decision that had dismissed their claim for damages due to an alleged breach of the purchase agreement.
Case Background
The Appellants entered into a purchase agreement in 2006 for apartment 104, located on the first floor of what was described as a two-story building. They paid €31,779.99 and lodged the agreement with the Land Registry. In 2008, they discovered that a third floor had been constructed on the building. After unsuccessful attempts to negotiate an exchange for another apartment, they terminated the agreement, citing a material breach of contract by the sellers, and demanded a refund of their payment.
The first instance Court ruled that there was no breach of the agreement, interpreting that the purchase pertained solely to the apartment and not the entire building structure. The Appellants appealed this decision, and the Court of Appeal found that the construction of a third floor did indeed constitute a fundamental breach of the contract terms.
Legal Insights for Buyers
This decision underscores the importance of thoroughly understanding and scrutinizing the terms of property purchase agreements. Buyers should be mindful of the following legal considerations:
Architectural Plans and Technical Specifications: Ensure that all architectural plans and technical specifications are explicitly incorporated into the agreement. Any deviations or modifications should require prior written consent from all parties involved.
Definition of the Property: Analyze the contractual definition of the property in detail. In this case, the Court of Appeal determined that the agreement encompassed not just the individual apartment but also the shared common areas of the building.
Co-ownership Rights: Be aware of your legal rights concerning common and jointly-owned areas. Any unauthorized changes to the construction can impact your proportional ownership and related rights.
Legal Advice: Engage a specialized lawyer to review and negotiate the terms of the agreement. This ensures your legal rights are adequately protected and can help prevent adverse consequences from ambiguous or unfavourable contract terms.
Site Inspections: Conduct regular site visits during the construction phase to verify compliance with the contractual terms and ensure that no unauthorized alterations are made.
The Court of Appeal’s ruling highlights the critical need for buyers to conduct a comprehensive review and obtain precise legal interpretation of property purchase agreements to safeguard their legal rights and interests.
For further information and clarifications please contact info@hhlaw.com.cy
Important Note: The information contained herein does not constitute legal advice and should not be relied upon as such. Always consult with a qualified legal professional regarding specific legal issues or concerns.
