A true story about a developer in Cyprus, and a lesson every real estate developer must hear.
“Ilan, I need to talk to you urgently,” he told me on a video call, with an excavation site and a view of the blue sea behind him. “Everything is progressing, only one thing is stopping us - electricity.”
“What do you mean stopping?” I asked.
“The nearest transformer, the one of the neighboring village, isn't strong enough. They say it doesn't have enough power to feed our eight villas. And the distance between us and it is too great. We'll have to build our own station.”
A short silence. I already understand the story.
“Did you check this before the purchase?”
“I checked everything, registration, zoning plan, permit, even the height of the ground level. But electricity? Who even thinks to check whether there's enough power?”
An experienced developer, with three projects abroad, tripped on a small detail that seemed “obvious.”
Legal checks? Excellent.
Planning checks? Precise.
But no one asked the simple question:
Is there infrastructure capable of feeding the project?
“The cost of bringing a line from the existing transformer is almost 100 thousand euros,” he said.
“And they claim there isn't enough capacity even if we pay. So now we need to build a transformer of our own.”
“And that means,” I told him, “that you don't have only a real estate project, you also have a private power station.”
He chuckled, “Wonderful. I always dreamed of being an electric company.”
Together with the local engineer we sat down and examined the solution.
A new transformer was built, next to the plot boundary, to be connected directly to a high-voltage line from the main road.
Not cheap, not simple, but complete independence.
No dependence on the village, no delays, and with full control over the electricity supply to the project.
“It costs about double what it would have cost to bring a line,” I told him, “but think ahead.
If another project is built here in the future, you're the one who will be able to supply them with a connection.”
He smiled. “So my transformer could actually become an asset?”
“Exactly. A real due diligence doesn't only uncover problems, it creates opportunities.”
A month later I received a message from him:
“The station is approved. The project is connected.”
And he added: “This time I learned, you don't sign for land before checking how many watts there are around.”
A developer who doesn't dig into the ground before he signs
may discover that his problem is not in the approvals, but beneath the surface.
A real due diligence must include three layers:
1. Legal - registration and ownership.
2. Planning - building percentages and permits.
3. Infrastructure and engineering - electricity, water, sewage, access.
Developers tend to think that an engineer will discover everything, or that the lawyer will “check it already.”
But in practice, each checks only his own area of responsibility.
The developer is the only one who sees the full picture.
When we met again in Paphos, he stood next to the new transformer station, proud.
“Look,” he said, “if I had known then what I know now, I'd have saved half a year and a lot of money.”
I smiled at him and answered:
“Good development starts with the question not of how much you are allowed to build,
but of how much it costs to operate what you built.”
A closing line:
A real due diligence starts from the last page of the plans,
the one about electricity.
Stories are based on real situations, with identifying details changed. Not legal advice.
Translated from the Hebrew original. עברית