Related Topics:

Property Investment in the TNRC

Sample Documents- updated 22/10/08

Re-sale or Re-assignment

Engaging an Advocate

Permission to Purchase

HBPG Do's & Don'ts

Baro Guidelines

Property Tax

Estate Agency Law

Estate Agents Union

Tel 00 90 (0)392 227 3673

fax 00 90 (0)392 227 7492

e-mail: cteaa@cteaa.org

Construction Association

Tel: 00 90 392 228 8061

Registered builders

Property Information Office

Tel: 00 90 392 227 7793

www.trncproperty.eu

"People should not buy houses until and unless their construction has been completed, final approval has been obtained for them and separate title deeds issued by the relevant authorities" Former Chief Justice Metin Hakki April 2008

Estate Agent

All estate agents must be certified by the Interior Ministry and must also be registered with the Estate Agents Union.  Their certificate to operate must be displayed in a prominent position in their office.  Please take a note of the Certificate number and the name certified to operate and contact the Estate Agents Union on 00 90 392 227 3673 to validate the certificate. 

When an estate agents gives you the marketing details for a property by law you must also receive a copy of the associated legal documents for each property (and site if applicable).  If they are unable or unwilling to supply these very important documents please do not waste your time viewing it.  If the property is 100% legal they will readily supply you with all the necessary documentation. 

It is also advisable to disregard any properties being built on land that is not owned by the Construction Company or Developer, or one of their directors.  You should contact the Construction Contractors Union to ensure that the construction company is registered with them 00 90 392 228 8061.

Remember an “artists impression” of a completed property and site is just that – an impression – and is not a legal document.  The VIZE stamped plans are. 

If you intend to engage a lawyer please do not use one that is recommended by the estate agent and DO NOT sign any documents in the estate agents office. Please read Engaging an Advocate.

This document is an “intent to buy” only. The Vendor is the legal registered owner of the land and property.  Please ensure that the Vendor named on the sales agreement is the person named as the current owner on the Koçan.  If this owner is different from the construction company or developer there will be an agreement, (and most probably a Power of Attorney) between the landowner and Construction Company or developer.  The lawyer should prepare a summary of the terms of such agreement, sign it and attach it to your sales agreement. The Turkish agreement and power of attorney must also be referred to in your sales agreement and attached as an appendix. 

If you decide to purchase a property built on land not owned by the construction company or developer please insist on a clause in your sales agreement that states if your landowner cancels the agreement with the original construction company he/she must immediately employ an alternative constructor to complete the property and site in accordance with the terms of your sales agreement. 

The Contract Sales Price should be quoted in Turkish lira as this is the official currency of North Cyprus. The sales price should include the cost of the land, all building work, all building licences, full infrastructure, sub-division or parcellisation, the vendor’s capital gains tax and the vendor’s estate agency fee.  Unless you request additional items in writing and receive confirmation in writing with a full breakdown of costs for each additional item DO NO pay any more than the agreed contract sales price. 

By law full infrastructure (roads, electric, water, telephone) must be in place before any work begins on the properties.  Therefore the cost for such services can and should be included in the agreed sales price.  The purchaser should only be liable to pay for the Kib-tek electric meter connection and Belediye water meter connection to their own property.  You should not agree to pay any extra for infrastructure services. 

Completion date.  If you are buying off-plan in stage payments it is advisable to engage the services of a qualified surveyor to inspect the work at every stage and advise you if such work has been completed on time and to a satisfactory standard.  Only on confirmation of such information should you pay your next stage instalment.  If for any reason you are in disagreement that the next stage payment is due you must advise the Vendor immediately in writing stating reason(s) for non-payment.

Late Completion Penalty Clause.  If you engage a surveyor this should not be applicable.  If this clause is included it should also state that any accruals for late completion penalties will be deducted from the Contract Sales Price.

Payment Schedule. Except for the initial agreed deposit no payments should be made in advance of the work being carried out to your satisfaction.  80% of the contract sales price should allow you to take possession of a fully completed property, retaining 7.75% for completion of snagging and 12.25% for title transfer time.  This will ensure that the vendor has sufficient funds to pay the capital gains tax and the estate agents fee. 

Taxes must be paid before title can be transferred and all are quoted and payable in Turkish lira.

• Stamp duty (currently 0.5% of contract price) is payable immediately upon signing the agreement.
• VAT (KDV), if applicable, (currently 5% of contract price) is payable by the purchaser to the Vendor upon taking possession of the property or at title transfer time, whichever is the soonest.  You must receive an official Fatura from the vendor immediately upon making the payment.
• Transfer tax (currently 6% of contract price with a one-off option of 50% discount making it 3%) is payable by the purchaser any time prior to title transfer.
• Municipality tax of 1% of the transfer tax amount (0.03% or 0.06%) is payable by the purchaser at title transfer.
• Capital gains / stopaj / withholding tax is payable by the vendor.  This is currently 6.25% for professional sellers and 3.5% for amateur sellers.
• Property Tax which is payable to the local Belediye by the vendor must be paid up to date before title can be transferred.  This is currently calculated at 1 ytl per square metre covered space of the property and an extra 25% of the total for a swimming pool

Re-Assignment of Contract:  This clause must stipulate that you can re-assign the agreement to another person at any time and that all terms must be transferred to that person. There should be no cost to either person for such re-assignment.

All parties to the agreement must be present to sign three copies of the agreement and all signatures must be witnessed by two independent persons.  The vendor’s kimlik number, the purchasers passport number and the witnesses passport or kimlik number must be stated alongside the names.  If the vendor is a registered company all pages must be stamped with their official company stamp and all pages must be initialled (top and bottom) by all parties. 

Three original signed copies of the agreement – one for the vendor and 2 for the purchaser.  If your lawyer requests one for his file please give them a copy and never part with your originals. 

The following documents form part of your agreement and must be attached and labelled “Appendix n”.  Where any of these documents are mentioned in the Agreement the relevant appendix number must by quoted. 

• Agreement and Power of Attorney between the landowner and construction company (if applicable) and an English summary of the contents of both these documents signed by lawyer.
• Kocan (front and back)
• Certified District Site Plan (front and back)
• All project plans (construction, electrical and mechanical) that bear the Chamber of Architects & Engineers VIZE stamp
• Full specification in accordance with the project plans
• Building permit/licence
• Confirmation from the relevant authorities that the infrastructure has been inspected and approved by them.
• Copies of all parties passport or kimliks and for a limited company their MS form xxxxx

The Next Stage

By law the sales agreement and all appendices must be registered at the District Land Office by either the vendor or estate agent within 21 days of the date on the agreement.  Before registration takes place stamp duty must be paid to the local tax office.  You must receive the official tax office stamp, duty paid receipt, the DLO registration N34A form and the DLO receipt, as these now form part of your legal documents. 

Permission to Purchase the property must be applied for.

copyright © 2006 HomeBuyers' Pressure Group.