“If required”

The purchase permit of a buyer from outside the EU is not only the buyer's business. When your final payment depends on registration, it is your business too.

The link arrived on Friday, October 23, at ten past seven in the morning. An article from the Cyprus Mail about a session of the Cypriot parliament's Interior Committee, which discussed restricting real estate purchases by foreigners from outside the EU. Below the link Assaf wrote: “Does this affect me?”

Assaf is forty-six, a civil engineer from Haifa, and he is building his third project in Larnaca: twenty-two apartments in a residential neighbourhood in the north of the city, with handover expected in summer 2027. Seventeen apartments have already been sold, thirteen of them to Israelis. He manages the project closely, flies to Larnaca twice a month, and every contract is signed with a local lawyer. He drafted the sale contracts with that lawyer on his first project, and has not changed much in them since. They worked.

I asked him for the contract template. In clause 14 I found the sentence: “The purchaser shall obtain a purchase permit, if required, at the purchaser's expense.” And clause 9, the payment schedule, stated that the last 12% of the price is paid upon registration of the apartment in the purchaser's name.

Each of these clauses looks reasonable on its own. Together they create a problem.

Under the Immovable Property (Acquisition by Aliens) Law, Cap. 109 of the laws of Cyprus, anyone who is not a citizen of an EU country needs a permit to register property in their name. The application is submitted to the District Officer. The permit is required for registration, not for signing and not for depositing the contract at the Department of Lands and Surveys. So an Israeli can sign, pay and deposit a contract without a permit, and discover what is missing only when the time comes to register. The law speaks of one apartment for residence, and in practice permits have also been granted for more.

In other words, Assaf's “if required” was always required. And thirteen times over, 12% of the price depends on a decision of the District Officer, under a law that parliament is now discussing changing.

October 26. A call with the lawyer who works with me in Larnaca. She reviews the files and finds that only four of the thirteen Israeli buyers have applied for a permit. The rest were waiting “until closer to registration.” Two of them bought a second apartment in the building, “for the kids.” She also tells me about a message Assaf's agent sent to two prospective buyers: “You can buy through a Cypriot company, without a permit.” “That's exactly what the committee wants to close,” she says. “And I wouldn't rely on it even today.” Assaf asked the agent to stop offering it that same evening.

October 27. A Cyprus Mail editorial says the committee will discuss the matter again the following week, and that it is waiting for a comprehensive bill from the government. The proposals on the table include a ban on agricultural land and on areas near the ceasefire line and critical infrastructure, size-based restrictions, and a discussion of purchases through companies. There is no approved text. And so there is also no answer to the question Assaf asked in our next call: “What happens to an application filed under the old law if the law changes before it is decided?”

I told him I don't know. And that the lawyer in Larnaca doesn't know either, because there is no text to read yet.

October 28. The decision. Assaf sends the nine Israeli buyers who have not applied a letter asking them to apply now, under the existing law, and offering to have his lawyer prepare the forms for them free of charge. An annex is added for the five apartments not yet sold: the buyer applies for a permit within thirty days of signing, and if the permit is not granted because of a change in the law, the parties may transfer the contract to another buyer who is eligible for registration, or cancel it and refund the money under a mechanism set in advance.

By Thursday, seven of the nine had applied. Two said they would wait. One buyer, who was about to sign for an apartment on the fourth floor, read the annex and said he “needs to think about it.” He has not been back since.

12% of the price, on thirteen apartments at an average price of 268 thousand euros, comes to about 418 thousand euros. It still depends on the permits, and now on parliament as well. “I sold the apartments,” Assaf said. “I didn't know I hadn't yet sold the registration.”

Israeli developers who sell to Israelis tend to see the purchase permit as the buyer's paperwork, something the buyer's lawyer will take care of before registration. But when the final payment depends on registration, the buyer's permit is a line in the developer's cash flow. And a line like that, in a year when parliament is discussing changing the law, needs a date, not “if required.” You sold the apartment to the buyer. The registration still has to be approved by someone else.

The question I would ask in your place

• How many of my buyers are from outside the EU, and how many of them have actually applied for a permit, in practice and not as a promise?
• What part of the price do I receive only upon registration in the buyer's name, and what is the total amount that depends on other people's permits?
• If the law changes before registration, what does my contract say, and if it says nothing, am I willing to add a clause that might scare off a buyer?

Stories are based on real situations, with identifying details changed. Not legal advice.

Translated from the Hebrew original. עברית

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