THE CYPRUS government has reportedly put on the backburner a bill allowing the repossession and auctioning off of mortgaged property, on the grounds that enacting the law now in the midst of the financial squeeze would be bad timing.
The bill has been prepared by the Land Registry Department and has been vetted by the Attorney-general’s office. It aims to amend the ‘Immovable Property (Transfer and Mortgage) Law 9/65’ so that mortgagees – such as banks – may sell off real estate, including via a private auction.
It would pave the way for mass repossessions by banks of mortgaged properties (residences and plots of land).
But on March 26 the Interior Ministry – where the bill is currently stuck – informed parliament in writing that it had been “suspended indefinitely due to the economic crisis.”
The ministry also informed legislators that “perhaps this is not the appropriate time for the mass auctioning of immovable properties by lenders.”
Hundreds of sale warrants for properties are pending at the Land Registry Department. Sale warrants are issued by the District Courts at the request of the Inland Revenue Department or other governmental agency for repayment of monies owed to the state.
One of the factors taken into account by the Land Registry in progressing sale warrants is the existence of encumbrances on property in question.
An encumbrance is any right or interest that exists in someone other than the owner of a property that restricts or impairs its transfer or lowers its value. This might include a mortgage, a writ of sale, a court judgement for an unpaid debt, a contract of sale, or accrued and unpaid taxes.