Alternative Resale Procedures
The main market in housing is the resales, that is individuals who wish to sell their homes. If a title in hand this is simple because you just transfer the title deed and all is finished.
In this case the seller must bear in mind that he has to clear his dues prior to transfer.
1. All property taxes, Municipal and sewage taxes must be paid prior to transfer.
2. Common expenses due must also be cleared. Also pay all outstanding water, EAC, telephone charges up to date of the resale.
3. Capital gains, if any, must be settled and a clearance certificate from the Tax Authorities secured (a simple job). Having said that it is a simple job and in order to minimize your tax burden, you must have the cost of acquisition, any additions you have done (with receipts), make particular reference to furniture and equipment (not taxed) if included in the sale price etc etc. Please refer to a previous article of ours on Capital Gains tax regarding exemptions and limitations.
4. If mortgaged you must secure a mortgage release or now that loans are difficult to come by, negotiate with the Bank to have the balance of the loan due passed on to the new buyer. This should help your sale.
5. If no title available the procedure becomes more complicated, but not impossible. It requires however the cooperation of the registered owner/ developer to an extent.
6. Enter into a cancellation agreement with the registered owner, who will then enter into a new sales agreement with the new buyer.
7. Cancellation fees required by developers range depending on whether the procedure is to be undertaken by the developer/registered owner, or by the original buyer or the new one. We estimate that anything between €1.500-€2.500 is reasonable (but there are thieving examples).
8. Make sure again that what we have referred to before are settled (property taxes etc, common expenses, capital gains etc).
9. Under a new law if the original developer/owner is not cooperating, you can assign your original agreement to the new buyer and deposit this assignment to the Lands Office. This is only possible if the existing buyer has deposited his sales contract before. The Lands Office will require a capital gains tax release, but we do remind that all other matters referred to above are settled. If you opt for this procedure, include in the agreement various matters – e.g. required maintenance period, outstanding EAC/water/telephone charges (as in all cases).
Both resales and assignments do not (as we are informed by the Lands Office) bear double transfer fees. So the original buyer stands to gain a considerable sum in terms of transfer fees.
If we were the buyers we would opt for the cancellation and new sale option, since it is an established procedure, whereas the assignment option has been recently introduced and we are not aware of any possible would be complications. But other than our own, non-legal opinion, the assignment is simpler it is and less costly for the original buyer.
Just as a tip, many banks have prepared catalogues of properties for sale which they have repossessed or for those with which they have a problem in collecting the instalments or even the Bank try to accommodate a resale in order to assist its clients. So, why not refer to your financing bank, if they have such a scheme? It is another source of sale since the banks appoint registered agents to handle, do not intervene in the sale (if not problematic) and we suspect that they have a certain inclination to finance the new buyers.
We could recommend to use a lawyer in your property deals notwithstanding the fact that using a solicitor is a problem in some cases. Several readers have written to us asking for a recommendation referring to disappointing (to say the least) solicitor’s behavior. We do refer from time to time to readers who have a solicitor’s problem recommending a number per area, who we know (there are many others good ones who we do not know mind you). We are sticking our neck out but someone has to do it, whereas some law firms are using young graduates well qualified in paper and with very little experience. There is a list of “recommended” advocates issued by the British High Commission which is available on request.
Once you have sorted out all the above, please refer to our previous article on “Preparing your home for sale”.