Reservation agreement and deposit
📘 Basic information
A Reservation Agreement (or Booking Form) is the first binding step when buying property in Cyprus.
It is used to block the chosen unit and fix its price while legal checks (Due Diligence) and preparation of the main Sales & Purchase Agreement (SPA) are carried out.
The reservation deposit confirms the buyer’s serious interest and protects the developer from losing the sale during verification.
1️⃣ When the reservation agreement is signed
- After selecting a specific property
- After agreeing on price and terms
- Before starting legal due diligence
- Sometimes even before arriving in Cyprus – remote signing is common (email + scanned signature)
2️⃣ Contents of the reservation agreement
Each developer or real estate agency uses its own template, but the agreement should include:
| Item | Description |
|---|---|
| Parties’ identification | Buyer name, developer/seller |
| Property description | Project, block, apartment number, size |
| Price and currency | Final price in EUR, including/excluding VAT |
| Deposit amount | Usually €2,000–5,000 |
| Payment details | Developer’s bank account or lawyer’s escrow |
| Reservation period | Typically 30 days (until SPA signing) |
| Refund conditions | When deposit is returned or forfeited |
| Declaration of blocking | Developer withdraws unit from sale once deposit is paid |
| Signatures of both parties | Confirms validity of agreement |
💡 In some cases, a standard payment plan is attached, especially for new builds (off-plan).
3️⃣ Deposit amount
Depends on the type of project and developer:
| Project type | Deposit (approx.) |
|---|---|
| Apartment / villa under construction (off-plan) | €2,000–5,000 |
| Finished property (resale) | €3,000–10,000 |
| Luxury project or investment unit | €10,000–20,000 |
The deposit is deducted from the purchase price when signing the SPA.
4️⃣ Where the deposit is held (Safety)
- It is recommended that the deposit is placed in a lawyer’s account (escrow), not directly to the developer
- The lawyer confirms receipt and releases the funds only after contract signing
- Some developers accept deposits directly, but they must always issue a receipt
💡 Never send money before signing the agreement or receiving confirmation from the lawyer.
5️⃣ Reservation validity
- Standard validity: 30 days from deposit payment
- During this period, the developer cannot offer or sell the same property to another buyer
If the SPA is not signed within the agreed period, the deposit may:
| Situation | Result |
|---|---|
| ❗ Buyer withdraws without a valid reason | Deposit is forfeited |
| ✅ Purchase is completed | Deposit is deducted from price |
| ⚖️ Buyer withdraws after negative Due Diligence | Deposit is fully returned |
6️⃣ Recommended clauses to protect the buyer
The agreement should also include:
- “Subject to satisfactory legal and technical due diligence” – if legal checks reveal a problem, the deposit is returned
- “Non-transferable / refundable only by written agreement” – clearly defines refund or transfer of deposit
- Date by which the SPA must be signed
7️⃣ Common buyer mistakes
❌ Sending the deposit directly to the developer without a lawyer
❌ Not requesting confirmation of receipt
❌ Ignoring refund conditions
❌ Letting the reservation period expire without signing the contract – deposit is forfeited
