Cyprus proposes private valuations and new rules for forced property sales

Nicosia, Cyprus. Cyprus is preparing changes to the rules governing forced property sales, including privately commissioned valuations, a fixed 15 per cent reduction after an unsuccessful auction and measures to close cases that remain unresolved for years.

The Department of Lands and Surveys opened a public consultation on August 7, saying the proposals would modernise reserve-price calculations and shorten procedures following repeated unsuccessful auctions.

Proposed valuation process

A reserve price is the lowest amount that may be accepted for a property at auction. It is intended to prevent a property from being sold at an exceptionally low price when offered outside the normal market.

Forced sales can result from an unexecuted court judgment, the exercise of a mortgage lender’s legal rights, or another court or statutory procedure. The proposed rules would also apply to indivisible properties held by co-owners who cannot agree on their future.

Under the bill, applicants would no longer wait for a district lands officer to conduct a valuation. After notification by the officer, applicants would commission a private property valuer to determine the property’s value and prepare its reserve price.

Only individuals or companies registered in the valuers’ register of the Cyprus Scientific and Technical Chamber (Etek) would be allowed to carry out the work.

Fees and professional assessments

Fees for private valuation reports would be set under a schedule approved by the director of the Lands and Surveys Department and the association representing property valuers. The schedule would be reviewed every five years, unless an earlier adjustment was justified.

The bill does not specify how much applicants would pay under the proposed system.

The proposal follows a warning by the Cyprus property valuers’ association that online and automated estimates cannot replace a professional assessment. The association said on-site inspections, knowledge of the local market and professional judgment were necessary to establish the value of a particular property.

Current charges

The department currently lists a €100 valuation charge for each affected plot in applications involving the forced sale of indivisible co-owned property.

Its current fee schedule also includes a €51.26 charge when an auction is unsuccessful, as well as separate fees for accepting an application, preparing notices, notifications, local inspections and travel expenses.