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Thursday 9th July 2020
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Cyprus bailout terms call for title deed delay reduction

THE Memorandum of Understanding between the Cyprus government and the Troika calls for a reduction in the backlog of immovable property sales contracts with title deed issuance pending for more than one year to less than 2,000 cases by the fourth quarter of 2014.

In July, the European Commission published a paper “Macroeconomic imbalances – Cyprus” which confirmed that: “For a number of administrative and regulatory reasons, between 120,000 and 130,000 properties are currently lacking title deeds. The average time for obtaining a title deed is just under 12 years and more than 200,000 owners are affected by this.”

(As there are some 430,000 residential dwellings in Cyprus you can gauge the extent of the challenge facing the Land Registry and Planning Authorities).

Problem solved?

The bailout condition to reduce the backlog of deeds waiting to be issued is certainly a step in the right direction and one that should be warmly welcomed. But will it resolve the Title Deed problem once and for all?

Sadly not – although it may be possible to reduce the backlog, it may prove impossible to transfer those properties to their purchasers because:

  • Properties are encumbered by mortgages and possibly other impediments that the developer has failed to remove. These properties cannot be transferred until all mortgages and other impediments have been cleared.
  • The developer has not cleared his tax commitments and is unable to provide the Land Registry with receipts of payment for Immovable Property Tax, Capital Gains Tax, etc., which the Land Registry requires before a transfer can take place.

In addition to those deeds that cannot be transferred, there are a number of other issues that will result in delaying or preventing their transfer:

  • Some developers charge buyers Immovable Property Tax based on a property’s purchase price rather than its 1980 value as defined by law and will often use the threat of withholding Title Deeds to elicit payment. Some have the audacity to add penalty payments imposed on them by the Inland Revenue Department for late submissions and payment.
  • The Land Registry inflates the market value of a property and demands that a purchaser pays Property Transfer Fees based on its inflated valuation. This is often considerably more than the purchaser actually paid for the property, and they refuse to pay.
  • The purchaser has sold or intends to sell the property.
  • The purchaser has not paid the whole of the purchase price.
  • The purchaser has died and probate is being sought.
  • Problems with ‘tainted’ Title Deeds issued as a result of the Town Planning Amnesty have yet to be faced. These deeds will be marked as suffering from planning infringements and it will not be possible to sell a property with severe infringements. It is unlikely that a buyer will be prepared to pay a (possibly inflated) Property Transfer Fee for a property they will be unable to sell.

No matter how good the intentions of the Troika may be, if the Title Deed system sucks and is not fit for purpose, and if developers and the Land Registry continue to exploit those buying property, no amount of target setting or massaging will fix the Title Deed problems.


  1. The system will be fairly easy to fix, but the entrenched attitudes and practices of the people who operate the system will be anything but.

  2. Resolving the title deed problem would bring in much needed funds to the this financially crippled government. The problem is that the thieving bunch who run things can’t see any profit in it for them. As long as the Cypriots can blame the “foreigners” for their problem nothing they’re happy.

    This idea may be so simple but why can the land registry when issuing the title deeds do a search if there is a mortgage on the development inform the bank that the property has been bought and paid for, same with the tax authority and if they want their money they had better put done their coffee and cakes and do some real work and chase up the real culprits.

    Sorry that sounds like Due Diligence, Nah that wont work,they don’t do that here.

  3. Firstly, well done Nigel for so clearly setting out the many and massive impediments to solving these horrendous problems.

    Perhaps even the Troika doesn’t yet understand the unholy mess that has been created over recent decades of the property driven Cyprus economy, or if they do, perhaps they recognise the depths of these problem, and feel it best not to scare everyone too much at such a delicate time?.

    For, to (mis) quote the Bard “something is rotten in the state of (Cyprus)”.

    Even with very full commitment, unlikely?, it will take many years to unravel the positions created by the decades of sloppy administration, inbuilt cultural and professional variance from accepted Good – let alone Best! – Practice – and, it seems, complete failure of successive governments, particularly the current one, to start urgent and essential remedial initiatives of these horribly ingrained, inter-connected malpractices.

    Much money will have been made, spent or ‘parked’ perhaps well away from these shores and we shouldn’t expect those who have profited to ‘rush to help’ . Even with Troika and EU pressure and ‘push’ It’s going to take a l-o-n-g time to sort these big, complex, inter-connected problems. And does anyone really see any early satisfaction or remedy for the many tens of thousands of ‘innocents abroad’ who have fallen foul of these wicked malpractices.

  4. When you’ve got the Chairman of the Bank of Cyprus owning Aristo Developers there’s going to be problems. Read the accounts, € 250,000,000 related party transactions in the last financial year.

    In a normal country you’d never get away with it!

  5. KC has it nailed. The Banks loaned money to developers. So let the Banks sort out their own problems with the developer. This what Interior Minister Sylikiotis said some years ago. How can it be right or proper for a bank to hold an innocent buyer to ransom for a loan given to a developer?

    Why did the Banks not put into place a system of repayments with the developer which provided for stage repayment of loans when individual properties were sold? Why did the Banks not safeguard their own interests?

    The only answer is because they planned for the unwitting buyer to be the guarantor. Why else would lawyers fail to inform their clients about developer mortgages.

    It`s not only the bananas that are bent in Cyprus.

  6. The Troika needs to think very carefully before agreeing to part with a single penny. They need to disbelieve every word they’re told because this lot will say anything to get their greedy hands on the cash then they’ll renege on every promise made and start blaming everyone and everything else. For a kick off I’d like to see an investigation into how the banks have allowed loans to pile up unserviced and perhaps the Comrade could tell the public how he managed to empty the country’s coffers so quickly? And where is that money now? The truth please your comradeship, not the usual BS you come out with.

  7. It would help if the law was changed to make developer’s mortgage debts a matter between the developer and his bank as happens elsewhere in the EU.

    Similarly developer’s tax debts have nothing to do with property buyers but by withholding title deeds against developer’s tax debts buyers become innocent victims of this outrageous practice.

    Unless such practices are tackled immediately Cyprus will not even begin to clear the title deed backlog and start collecting transfer fees and property taxes.

  8. Public sector workers industrial action due pay cuts (austerity measures) + massive increase in workload = no increase in title deeds issuance.
    I.e. no chance.

  9. It is quite clear to me that the Cyp Prop Prob will not be resolved any time soon and many innocent buyers will suffer for many more years.

    The developer mortgage issue must be addressed by the banks and government. Does anyone actually know the sum involved?

    Developer tax issues should be removed as an impediment and the government should pursue the debtor on it’s own.

    The planning amnesty was always, in my opinion, another scam and in reality will make badly tainted titles worthless. Who would buy one?

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