In recent years many apartments in Northern Cyprus, an area under Turkish control since 1974, have been marketed to Israelis. Prices there are much lower than in the south, but the legal risk is entirely different.
Why the legal position is different
The Republic of Cyprus, the recognised state and an EU member, does not recognise land registration by the entity in the north. Much of the land in the north belonged to Greek Cypriots who left in 1974, and they and their heirs are still considered the owners under the law of the Republic.
The Orams case
A British couple built a house in the north on land belonging to a Greek Cypriot refugee. A court in the south ordered them to demolish the house and return the land. In 2009 the Court of Justice of the European Union ruled that the judgment could be enforced in the United Kingdom, then an EU member state. In other words, a buyer in the north may be sued and face a judgment enforced against his assets in EU countries.
Criminal exposure
Under the law of the Republic, selling, buying or marketing Greek Cypriot property in the north without the owners’ consent is an offence. In recent years foreign property developers and agents have been arrested in the south on suspicion of involvement in such deals.
Questions to ask before buying
- What was the status of the land before 1974, and who is the registered owner under the Republic’s records?
- Does the land have an original “Turkish” title or an “equivalent” title, and what does each mean?
- Will you be able to sell the property in future, and to whom?
- How will you transfer the money, and which bank will finance it?
The bottom line
A deal in Northern Cyprus is not only a matter of price. It carries a risk of litigation, difficulty in reselling and criminal exposure in the south. Before any commitment, obtain an opinion from a lawyer who knows the situation there. If you are considering buying in the south of the island, see our guide to buying property in Cyprus.
Where do you go from here?
At Paz Israel & Co. Law Office we accompany real estate investors in Israel, Israelis buying property in Cyprus and foreign investors buying in Israel: checking the property and the seller, negotiating the contract, accompanying you through registration and coordinating with tax advisers. In Cypriot transactions we work in coordination with a local Cypriot advocate. For more information see our real estate investor services page, or contact us to schedule a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information, is correct as of the time of writing, and does not constitute legal or tax advice. Cypriot law is checked in every transaction with a local advocate.