THE MEMORANDUM of Understanding (MoU) agreed between Cyprus and its international lenders requires Cyprus to “eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year” by Q4-2014.
However, of utmost importance to those who have been duped into buying property built on land that their property developer has mortgaged to the bank is that its title, when issued, will be ‘clean’ – i.e. free of encumbrances and other impediments that prevent the transfer of ownership of the property to its purchaser.
And of course there’s little point in clearing the Title Deed issuance backlog if the ownership of the properties they relate to cannot be transferred to their buyers who have paid in full for those properties – it’s merely a paper exercise.
To obtain clarification on this issue Daniel Hannan, MEP for South East England, has raised the following question in the European Union Parliament.
to the Commission
Daniel Hannan (ECR)
Subject: Cypriot Property Title Deeds
Following the lobbying by many UK MEPs in coordination with the Cyprus Property Action Group, it is gratifying that the Commission as part of the Troika has ensured that the title deed issue is addressed by Cyprus as part of the bailout conditions.
Nevertheless, in order to eradicate any doubt could the Commission please confirm that all buyers who have hitherto paid in full for properties will have access to their deeds, without exception, as a result of this exercise? Furthermore, could the Commission also confirm that none of these deeds will have any encumbrances placed upon them?
Answer given by Mr Rehn on behalf of the Commission (added)
‘Eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year. The Cypriot authorities will enhance cooperation with the financial sector to ensure the swift clearing of encumbrances on title deeds to be transferred to purchasers of immovable property, and implement guaranteed timeframes for the issuance of building certificates and title deeds’
(The text of the memorandum of understanding is also available at: http://ec.europa.eu/economy_finance/publications/occasional_paper/2013/pdf/ocp149_en.pdf)
The MoU therefore envisages a specific deadline for the elimination of the observed backlog. The swift clearing of encumbrances on title deed transfers constitutes an important element of this agreement.
Mr Hannan and the Cyprus Property Action Group must be thanked for their continuing efforts, but one issue still remains unsolved:
For the transfer of ownership of a property to be achieved, the vendor has to supply receipts from the Inland Revenue Department to the Land Registry showing that he has cleared his Immovable Property Tax and Capital Gains Tax liabilities – and receipts from the Sewerage Board and the Municipality/Community in which the property is located confirming that these charges have been paid.
It is clearly a fault in the ridiculous processes that someone who has paid for their property in full and which has a ‘clean’ title is prevented from owning that property because the vendor is either unable or unwilling to settle his tax and other liabilities.
Perhaps a further question in the European Parliament to clarify this matter is needed?