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Title Deed regulations approved (updated)

The Cabinet has approved the Title Deed regulations needed to implement the ‘hidden mortgages’ law to protect home buyers in Cyprus who were duped into buying property that developers has previously mortgaged to the bank.

Title Deed regulationsTHE CABINET on Wednesday approved regulations needed to implement a law designed to protect house buyers without Title Deeds.

The law is expected to be approved by the House in early September.

“The regulations passed by cabinet today are in the hands of the MPs so that we gain time,” Interior Minister Socratis Hasikos said. “We expect the matter of trapped buyers to be resolved in a permanent way by September 3.”

The law must come into force by September 5, so that Cyprus complies with the terms of its bailout programme.

The bill is meant to sort out the mess created by the failure to give Title Deeds to people who paid for the property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

Developers’ land and buildings are counted as assets that need to be offset against their debt to banks, giving lenders a claim on people’s properties that had been mortgaged by developers.

Thousands have been left without deeds as a result.

The government which had submitted the bill relatively late – in June – had wanted the House to rush it through before the summer break. Instead, MPs voted to extend the exemption of ‘trapped’ properties from foreclosure until the end of the year.

The president refused to approve the exemption and sent it back to parliament.

But after a deal struck between the government and the legislature, parliament amended the foreclosure exemption until September 5.

Parliament normally resumes work in the first week of October, but an extraordinary session will be held on September 3 to pass the legislation.

Banks oppose the bill since it would mean them taking a hit. Hasikos appeared to have little sympathy, suggesting they go and sort it out with the developer or the person who took the money, because banks were responsible for monitoring how it was used.

The bill grants the head of the land registry department the authority to exempt, eliminate, transfer, and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

Update 30.07.15

Title Deed regulations (Greek)

Title Deed regulations (English)

Readers' comments

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  • Boblio says:

    When I went to enquire at the Land registry in December 2014 I was told my two minor encumbrances (roof on car port and ‘hardened’ pergola) had been noted and allowed under the amnesty, however the one outstanding task that was preventing the release of the deeds was the failure of the developer so far to upgrade the road outside the house.

    We live in a farming area with no houses either side of us with a perfectly adequate metalled road outside however LR insists that the license to build was on condition that a pavement and the road outside is upgraded to CYTA/Electricity Board/Highways standard.

    I knew nothing about this when purchasing the property, for which cash was paid in full on completion in 2006. I have tried to persuade the developer, with whom we have been perfectly happy until this issue and who has worked hard to survive in the crisis, to speak to LR and get the task complete but I am getting the “blank’ from him.

    This issue, and I am sure there are many others in the same position, is entirely out of my hands, – under the new ‘climate’ of cooperation will LR be able to issue the Title deeds to me and sort the road problem with the developer?

    (Editor’s comment: A new simplified amnesty is being prepared – see Illegal building extensions amnesty, which may help. But until it’s been agreed and published I can’t say for sure.)

  • houlou says:

    @Nigel, @uboat , thanks for reply to Uboat, in a nutshell and correct me if I am wrong.

    If you have a personal housing loan you will not get title deed until of course you have paid off your property *your loan only) and therefore is unencumbered free at time of transfer.

    If the developer has loans out on your title? and you have paid it off you get a title deed, this regardless of whether the developer has taken out loans on your property as such, and regardless of fact the developer has debts outstanding to the state memos etc.

    (Editor’s comment: You will be the Title Deed registered in your name even though you have not paid off your loan. The property will be registered in your name and the bank will convert your home loan to a mortgage and lodge it as an encumbrance against the title – and you will have to pay the Land Registry 1% of the sum advanced under the loan.

    If the ‘hidden mortgages’ law is passed then any developer’s mortgage will be moved to another property before your Title Deed is issued.)

  • UBoat says:

    @houlou says

    Thank you for the clarification.

    Since you mentioned it, do you mean if you have a personal housing loan you will not get title or do you mean if the developer has loans out on your title?

    (Editor’s comment: The thing that prevents you getting the deed to a property is a developer’s mortgage that was taken before your contract was deposited at the Land Registry. Once that mortgage has been exempted/eliminated/transferred, etc. Title can be transferred to the property’s purchaser (assuming the Title Deed has been produced). If you have a housing loan, that will be lodged as an encumbrance against the Title which now bears your name as the property’s legal owner.)

  • houlou says:

    @Uboat, your first 2 points are covered developer debt to bank and state, the last point about bust developer again I am pretty sure Hasikos mentioned in the past again you are covered…..all this depends on passing the bill as law in sept and how much they will amend it…..Hasikos again on radio trito at 8:30am again re-iterated tough for the banks if they take a hit, they should have lent responsibly to developers…and mentioned again if due to developer not meeting obligations to state a memo has been place on the land he built on, again buyer not punished…..go to land reg with proof you paid or are paying without fault for your property and you can get deeds (obviously those still repaying loans wont get deeds until the debt is settled, but the purchasers own debts not the developers)

  • Deanna says:

    The last paragraph made me sit up straight……

    “The bill grants the head of the land registry department the authority to exempt, eliminate, transfer, and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.”

    So the land Registry really are the island’s Mafia: all their koumbaros will have their NPLs cancelled and the banks will go bankrupt.

  • UBoat says:

    Thats good news …….

    Would that include the thousands of people who brought and paid for their property in full long before the developer and his dodgy friends realised they could borrow money against the titles they had not transferred of already sold and paid for properties ?

    Hence adding to the diabolical situation we see before us now, where some people have 3 issues one being developers mortgages and the other being TAX owed to the government the 3rd being that the developer may have already gone bust or just does not/will not pay his debts.

    Of course another issue is, a problem of completion of developments according to the contracts etc etc

  • scruffy says:

    “The regulations passed by Cabinet are in the hands of the MPs so we can gain time”.
    How scary is that? This is going to be a long few weeks awaiting September 5th.

    I suppose having already waited years for something to happen, a few more weeks will not be long going in.

    Lets just hope that there are enough of them left, that still have an an ounce of integrity, and will do what is right to clean up this whole sordid business.

  • AGalea says:

    Thank you to the TROIKA. Without your putting on the thumbscrews and squeezing hard, this law would have been kicked into the long grass by the majority of Cyprus MP’s once again! Please keep applying the pressure till ALL the necessary measures are taken including privatizations of CYTA, the prots and the electricity companies.

  • Andrew says:

    This is encouraging news. Let us all hope that full unencumbered title deeds will be issued to the buyers directly. Title Deeds must bypass developers altogether and not be passed to them, to hand out. These unscrupulous rogues would most certainly try to blackmail the innocent.

  • houlou says:

    Good enough is enough and I hope the MPs don’t do another ‘Aristo’ get out jail trick again, developer or whoever took the money as Hasikos said has to pay, not innocent buyers..

  • carol says:

    Our deeds have been issued but to a liquidator does any one know how we will stand.

    (Editor’s comment: We’ll have to wait until 3rd September when MPs debate (and possibly amend) the actual bill before we can say for certain how it will affect people such as yourself. The draft bill makes no reference to companies in liquidation, so if you’ve paid for the property you should be able to apply for its Title Deed.)

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