Amended Law for Trapped Buyers
On 03/09/2015 the Parliament implemented the new amended law on The Immovable Property (Transfer and Mortgage) Law 2015 and issued relevant regulations giving the opportunity to thousands of ‘trapped’ buyers to finally receive title deeds for the property they purchased. The implementation of this Law was a requirement imposed by Troika in giving the next installment of €500 million. In order to resolve this situation, the trapped buyers are now eligible to apply to the District Land Office to initiate procedures to receive their title deeds.
According to the new law, all the purchasers who deposited their Contract of Sale at the Land Department until the 31st December 2014 are eligible to submit an application to the Director of the Land Department, accompanied with all the relevant evidence in relation to their property. In addition, the vendor, the potential mortgage lender, the borrower under the loan agreement with the purchaser and the Director on his own initiative has the right to apply for transferring the property in the name of the purchaser.
The new law covers situations where:
- The purchaser has fully paid the purchase price; or
- The purchaser has paid part of the purchase price and they will pay their balance into a special account kept at the Land Registry either immediately or in installments;
- The property is encumbered either with encumbrances or with memo imposed by the state;
- The property was bought through consideration or resale;
- An order for ‘Specific Performance’ has been granted by a Court.
In addition, the new law secures trapped buyers by freezing negotiations of alienation of immovable property based on the Bankruptcy Law and Companies Law and in any other regulation which relates to the alienation of immovable property.
In particular, the stay until full examination of the application will apply to the following circumstances:
- separate title deed has been issued for the subject matter of the contract (deposited in the Land Registry) and either the purchase price of the contract has been fully paid or part of the purchase price has been paid up to the date of submission of the application and the purchaser submits in writing that the balance of the purchase price will be deposited, according to the provisions of the contract, into a special account kept at the Land Registry as provided by Article 44K Section 2; or
- separate title deed has not been issued for the subject matter of the contract (deposited in the Land Registry) and either the purchase price of the contract has been fully paid or part of the purchase price has been paid up to the date of submission of the application and the purchases submits in writing that the balance of the purchase price will be deposited, according to the provisions of the contract, into a special account kept at the Land Registry as provided by Article 44K Section 2 and in addition the issuance of separate title deed will be possible according to the provisions of Part VIA of the Immovable Property (Tenure, Registration and Valuation) Law.
In cases where an application is successful, the purchaser will be requested to pay the Transfer Fees within 60 days’ notice to transfer the property. If the fees are paid by the purchaser in due time, then he will be entitled to a 10% reduction in the transfer fees or pay the transfer fees in 12 monthly instalments.
If a purchaser neglects, omits or refuses to pay the Transfer Fees within the specified period, the property will be transferred and registered in their name and the Director will lodge an encumbrance amounting to 50% of the unpaid Transfer Fees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought on your specific circumstances. For further information, please contact Marina Fiakka at marina.f@kyprianou.com.cy.
