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Remaining planning amnesty bills passed

Yesterday Parliament passed the remaining two ‘town planning amnesty’ bills aimed at tackling the estimated 130,000 properties in Cyprus without Title Deeds.

PARLIAMENT yesterday concluded discussions on the remainder of the “town-planning amnesty” legislation, completing the legal framework that aims to put an end to the title-deeds fiasco.

Cyprus MPs unanimously approved the Immovable Property Sales (Specific Performance) Law, thus giving land contracts power over any mortgages owed to the banks by the property’s seller.

The law was an integral part of the government’s so-called amnesty package. Tens of thousands of real estate buyers across the island – local and foreign – remain without Title Deeds to their properties after the sellers failed to settle their bank debts.

The fact that rights to the property were automatically transferred to the bank left many exposed, even if they had settled their entire debt on the property.

The second bill – in which the government pushed for all land contracts to be in writing and to be registered at the Land Registry Office in order to be considered valid – was rejected by majority vote, with opposition DISY, EDEK and EVROKO, as well as coalition partner DIKO voting against.

The plenum also unanimously approved a number of last-minute amendments submitted by the parties.

Presenting the two bills before the vote, Chairman of the House Legal Affairs Committee, DISY’s Ionas Nicolaou said the laws corresponded to society’s demand for better protection of buyers’ rights.

“The new law will allow the buyer to have Title Deeds, independent of whether the seller owes money on that property,” said Nicolaou. “It is important as it will help reactivate the property market in Cyprus.”

The new legislation, along with the amended town planning laws that were passed last month, aims at legalising real estate property that lacks a Title Deed due to town-planning or building irregularities. With around 130,000 Title Deeds currently pending – mainly due to developers failing to pay up mortgages on properties buyers have already paid for – this news is bound to be welcomed by many.

Now buyers will have the ability to pay up the amount they owe on their property straight to the bank, while their land contract will have precedence over any mortgage owed by a third person on the property.

Meanwhile, the House also approved a law proposal by DISY that enables owners of a co-owned plot to develop their share of it as they wish, without having to present the signatures of the remainder of the co – owners.

Until now, if a plot was co-owned, for someone to build on his part of the land, he would have to seek the approval of the other owners, otherwise the Town Planning Department would not grant authorisation.

But with the new law, people will be able to develop without needing the co-owners’ signatures.

It was not clear yesterday, however, what would happen in cases where persons have already paid developers in full for a property but have not received the Title Deed because of outstanding debts by the developer to the banks for the plot of land.

Readers' comments

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  • @dimitri – Individuals who have purchased property can request the Land Registry to carry out a Title search to establish if there any charges lodged (such as a mortgage) against the Title.

    But the Land Registry will only divulge this information to ‘interested persons’, where:

    “Interested persons” means the owner of the property, his heirs, devisees and legatees, the owner of any trees, buildings or other objects on the land which belongs to another and vice versa, the person entitled to any right or interest in the immovable property, who satisfies the Director that he is a prospective purchaser or mortgagor, the plaintiff in any action against the owner of such property, the professional valuer who may require certain information for purposes of the valuing certain immovable property in a case relating to compulsory acquisition and includes any person not thus specified to whom the Director may specifically order that any information be furnished.

    In Cyprus, information or documents in the public register of Titles connected with the ownership of immovable properties and charges or encumbrances lodged against them are treated as confidential and unavailable for public inspection.

  • dimitri says:

    @Nigel do you think contacting the land registry will shed any light on the plight of those who have paid in full but are blighted by developer debts either to banks and/or to local authorities for immovable property tax etc on land homes are built on?

  • Stuart says:

    @Andrew

    Sales contracts which contain payment schedules against future calendar dates are at best fraught and at worst outrageous and potentially criminal as a developer need not lay a single brick, yet still gets paid in full.

    This is why I personally would never sign up to such a contract. Here in the UK, payment schedules are against ‘percentages of completion’ and can be physically verified by a chartered surveyor, if required, before any progress payments are made.

    It surprises me that so many buyers seem oblivious to this obvious contractual flaw and quite happily pay the full price before any building work starts.

    Not recommended, particularly in the third world!

  • Mike says:

    @Andrew

    Outrageous and Criminal it probably is and until we have proof to the contrary outrageous & criminal it will probably remain.

    Let us all hope that Parliament has seen the damage that has been created, the burden that has been placed on the state and that it does the right thing. If not I can see, in spite of billions of Russian Roubles flowing into the Country, a spectacular implosion where properties will become, as they were some years and not too long ago, almost worthless.

    In the 50’s and 60’s £30 to £100 bought you a very decent pile with more than enough land.

  • Andrew says:

    Most people who have bought new build property in Cyprus will have payment schedules included in their sales contract. Therefore many buyers will already have paid in full for their homes.

    It would be outrageous and downright criminal if those people were subsequently left out and not protected by any new legislation.

    Buyers who have already paid in full for their homes should be first in the queue when Title Deeds are finally issued.

    As minister Sylikiotis himself said. Let the Banks solve its problem with the developer.

  • andyp says:

    Well as far as I can see Nigel this really does not change very much and will certainly not kick start the property market as it is the developers mortgage that is the problem.

    Might help folk like the Hudsons if it is back dated. Anyone know them who can get them to check?

  • @Unbelievable – I do not know why the second bill was rejected. But I do know that if the Title Deed is available, the vendor and purchaser can visit the Land Registry with the necessary documents and transfer the property without a sales contract.

    What will happen to existing home buyers whose properties are burdened with a developer’s mortgage? We will have to see what the law says in detail when it is published in the Cyprus Gazette.

  • Unbelievable says:

    @Nigel, Can you help explain why the 2nd bill was rejected? I’m confused as to why they would not want this passed.

    Also, how can multiple owners of a plot of land, build on their share without asking the other co-owners permission. Which part do you own?

    I know that with our family car, my wife owns the back part, because she’s definitely a back seat driver….LOL

    At the end of the Nigel, what happens to existing home owners tied in with Developers that are going to go bust soon?

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