THE SIXTH review of the Cyprus Economic Adjustment Programme sets more stringent and ambitious targets for Cyprus to achieve during the period 2015 – 2018.
The issuance and transfer of Title Deeds to those who have bought and paid for their Cyprus property is high on the list of priorities, with the latest revision of the Memorandum of Understanding (MoU) stating that:
Prior to the granting of the seventh disbursement of financial assistance, the authorities will, after taking into account comments by programme partners, present draft legislation to programme partners, that
- ensures that property buyers who have paid the purchase price in full, will have their title deeds transferred within 6 months after their issuance;
- puts obligations on all parties involved to ensure that the procedures releasing encumbrances and transferring the title can operate without delay and as automatically as possible; and
- provides safeguards against abuse, inter-alia by introducing a mandatory escrow account to route all payments related to a property transaction, as well as adequate compensation for the parties involved, if available.
By end-June, the legislative measures will be adopted by the Council of Ministers.
Furthermore, the CBC will, in close cooperation with Ministry of the Interior, provide to programme partners a financial sector impact assessment regarding title transfers and lifting of encumbrances by end-June.
The authorities will propose legal or contractual standards for property sales contracts and connected loan and mortgage arrangements by end-October, as well as further legislative and administrative measures necessary to incentivize the swift transfer of title deeds by end October.
Although not a pre-condition on the release of bailout money, the bar for dealing with the Title Deed backlog has also been raised:
the title deed issuance backlog of immovable property units with title deed issuance pending for more than six months drops to less than 3,500 units by Q4-2015 (backlog refers to (i) applications, (ii) units that are eligible for the “ex-officio” issuance of title deeds, required certificates and permits). The ex-officio cases will automatically be counted in the backlog from the date the certificate of final approval is being issued by the respective Local or District Authority.
The Memorandum of Understanding (MoU) following the troika’s sixth review contains several other targets that should help to resolve planning issues, ‘hidden mortgages’ and the unacceptable bureaucratic delays in issuing Title Deeds.
(The IMF Executive Board is expected to consider approving the combined 5th, 6th and 7th reviews of the Cyprus economic adjustment programme during its June 19 meeting.)