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Cyprus Real Estate Agents, Advertisers & Tourist Agents

By Antonis Loizou, FRICS
Antonis Loizou & Associates Ltd
Chartered Surveyors
Property Valuers - Project Managers

May 2006

The new law regarding Estate Agents (12/2004) has been approved and determines specifically that anyone who exercises this profession without a licence is subject to a lawsuit (with imprisonment of up to one year and a fine of Cy£2,000).

At the same time, the law also determines that anyone who 'acts as an estate agent', will be subject to the provisions of the above mentioned law. The ‘cowboys’ though have found a way to present themselves as undercover estate agents, referring to themselves as 'property advertisers', with a similar approach being made by taxi drivers and even tourist agents and tour operators.

So we notice the following strange occurrences that also constitute a provocation to the Cyprus police force, the District Attorney's office and to every law-abiding citizen in Cyprus.

(a) Advertisers: Various illegal estate agencies appear to be advertising; and have prepared catalogues of properties for sale. Despite this however, they advertise that they are not estate agents, but rather 'advertising agents'. They publish brochures, visit properties and express their opinion on the value of property (which based on ETEK's law, is also illegal). They meet interested buyers whom they show around the property for sale and at the end they receive 5% on the sale price, which is called 'advertising expenses' and not commission!

This is a joke. Due to this, the income tax, is not deducted from this advertisement “as it is an expense”. Don't you think it is time Mr. Chief of Police and Attorney General to take some action? There is a challenge for you.

(b) Tourist Agents: Other 'cowboys' have created undercover estate agencies, which they call 'tourist agencies'. They claim that they advertise Cyprus to the tourist and are organising - 'property inspection trips' for prospective foreign buyers paying their air tickets and other expenses. Should they buy properties in Cyprus (through their associate developers in Cyprus) they receive 10% commission on the sale price. They claim that they do not consider themselves estate agents, since the selling of properties is based on trips/visitors from abroad and the 10% is a touring expense!

(c) Taxi drivers: Another up and coming category of 'cowboys' is certain taxi drivers. This category claims that simply as taxi drivers they drive the interested client to various projects and if a foreigner buys a property, the owner-vendor in order to thank them, gives them a 'bonus' that coincidently comes up to 3-5% on the sale price (even Cy£5,000-10,000). Is this not a great show of appreciation towards the taxi driver!

(d) Restaurants and Hotels: The next stage is the creation of 'Hotel Property Outlets' (that is, hotels, that will host foreign prospective buyers for 3-5 days “free of charge” and this (in combination with foreign tour operators, advertisers and taxi drivers) who will provide the basic 'springboard' for visits, sales etc to foreigners in Cyprus. The hotel will be converted into a type of “mafia headquarters”, since all of them will be working as estate agents, but each one will be named differently with any title apart from the one of 'estate agent'. So the hotelier will also take his own percentage on the 'commission' and because he cannot charge it as commission, he will claim that it covers charges for the hospitality!

(e) Registration Board of Estate Agents: Based on legislation, the above board exists; does it exist in action though? Where are the public announcements of this board regarding the above and their letters of protest to the police? Where are the private criminal measures? Let's hope that in the near future we will see some sort of action on their behalf.

Is this ultimately a laughing matter? We do not think so, because the amounts mentioned are great. From the total value of property sales abroad of Cy£700,000,000, these 'cowboys' sell around 30% with a commission of 5-12%. So the value of illegal returns is in the region of +Cy£18 million each year.

So after drug trafficking and possibly prostitution, in the illegal handling of millions of pounds we can say that illegal estate agents should be classified as the third category. If the illegal estate agents in the Republic of Cyprus continue undisturbed and are allowed to continue with their illegalities, in the near future they will have moved up into second place.

www.aloizou.com.cy

ala-HQ@aloizou.com.cy

 

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