A recent investigation by Property News Cyprus has issued a stern warning to property owners and Management Committees: relying on AI like ChatGPT for legal advice on communal fees can lead to “rubbish” results and potential legal disputes.
While AI is a powerful tool, it is currently prone to “hallucinations”—generating factually incorrect information that sounds authoritative but has no basis in law. In the complex world of Cypriot property legislation, these errors can be costly.
The Common ‘AI Trap’: Title Deeds vs. Reality
The primary error identified occurs when AI models are asked how to calculate communal fees for jointly owned buildings (apartments and complexes with shared pools or lifts).
ChatGPT and similar models often suggest using the “percentage share” found on an owner’s Title Deed. However, experts warn that this is a fundamental misunderstanding of the law. In Cyprus, the share on a Title Deed represents ownership of the common land, not the recurring maintenance obligation.
The Legal Standard: Unit Area (Cap. 224)
According to the Immovable Property (Tenure, Registration & Valuation) Law, Cap. 224, the only legally sound method for determining fees—unless specific registered regulations state otherwise—is based on the relative size of each unit.
The calculation is straightforward but specific:
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Enclosed Area: The main living space of the unit.
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Verandas/Balconies: Both covered and uncovered areas must be included.
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The Formula:
The calculation – (unit’s area ÷ total units’ areas) = percentage contribution to the communal budget set by the Management Committee.
Using the Title Deed share as a “convenient proxy” has no legal standing and can be challenged in court by dissatisfied owners.
The High Risk of ‘AI Hallucinations’
The danger isn’t just theoretical. A Stanford University study recently highlighted that state-of-the-art AI models hallucinate or provide false information in 69% to 88% of responses to specific legal queries.
AI doesn’t “know” the law; it predicts the next word based on patterns found on the internet. If it scrapes incorrect information from a real estate agent’s blog or an outdated forum, it will repeat those errors with total confidence.
“I can’t blame ChatGPT; it doesn’t know if the information it finds is factual, ‘fake news’ or just plain rubbish.” — Nigel Howarth, Property News Cyprus
How to Use AI Safely
The investigation proved that AI can be accurate if properly guided. By uploading the actual text of Cap. 224 (even in Greek) and asking the AI to answer solely based on that document, the model provided the correct legal interpretation.
The takeaway for Management Committees:
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Never use a general AI prompt for legal or financial calculations.
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Always verify AI output against primary sources, such as official government gazettes or the Land Registry.
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Consult reliable media outlets and legal professionals who specialize in Cypriot property law.
Source: Property News Cyprus