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Hidden mortgage bill expected to pass

Cyprus hidden mortgage bill should passA BILL addressing the issue of ‘trapped’ home buyers without title deeds looks set to breeze through the House plenum this Thursday, following a final-hour consensus struck between the government and political parties.

The core of the government legislation addressed the cases of some 30,000 buyers for whose property title deeds have been issued but couldn’t be transferred to the buyer despite them fully honouring the repayment terms of the sale agreement.

After discussions in parliament, the bill was broadened to also cover an additional 48,000 – also honouring the terms of sale – that had no title deeds issued. Foreclosure proceedings on these cases will be suspended, allowing sufficient time to have the deeds issued.

“It has been demonstrated that the government’s policy was not about fast-tracking foreclosures en masse, which some used as scaremongering, but rather… about solving a long-standing problem for property buyers who, while being consistent with their obligations, saw their property remain in limbo and at risk because of the obligations of other parties or due to weaknesses in the system,” Prodromos Prodromou of the ruling DISY party commented.

He was speaking shortly after Tuesday’s joint session of the House interior and finance committees discussing the bill.

Main opposition AKEL said it will vote for the item, despite the fact it does not cover those who paid up to 80 per cent of the home’s price but were not consistent with the remainder of the balance. These cases are not protected from foreclosure.

The party intends to table a legislative proposal extending by two more years the suspension of foreclosure proceedings for this category. The foreclosure exemption for ‘trapped’ buyers currently expires on September 5.

DIKO meanwhile plans to table an amendment next week whereby ‘released’ home buyers would be allowed to settle outstanding transfer fees in 12 monthly, interest-free equal payments, after the property has been transferred to them.

The government bill is meant to sort out the mess created by the failure to issue 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.

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

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.

It covers transactions up until December 31, 2014.

The bill provides for the balance on a property sale price to be paid into a special temporary account, allowing the director of the land registry department to initiate the transfer procedure.

The elimination or transfer of mortgages and or other encumbrances will take place within 45 days of a notice sent out to affected parties, who have the right to appeal.

Mortgagors (typically property sellers) may request that the encumbrance be transferred onto other properties they own. If they do not own other property, they may request that the encumbrance be transferred onto the property of persons who guaranteed their loans.

‘Released’ properties will be transferred to the name of the buyer, who will bear all transfer fees. The buyer is subject to a 100 per cent penalty on the fees if he or she does not pay them within the specified deadline.

The director of the land registry department will strike any encumbrances on a property with a title deed before it is transferred.

Resolving the title deeds muddle is a ‘prior action’ set by Cyprus’ international creditors for releasing the next bailout tranche.


  1. @Nigel

    Fantastic result! As you have always said, the devil is in the detail but its certainly looking like justice for many.

    I think you may soon be inundated with some well deserved plaudits coming your way.

    Your tireless endeavours to keep the situation in the public domain have not gone unnoticed.

    A sincere Thanks from me for sure.

    Thanks for your comments scruffy, they are much appreciated. There are still some problems that need to be resolved. But after years of vacuous announcements by various government ministers it seems we’re moving in the right direction at long last. I’m only sorry that it needed the island’s economy to collapse. Had the government acted sooner Cyprus may have avoided the black hole it dug for itself – but the troika has done a good job in ‘persuading’ the Government to make changes for the better in return for the bailout loan.

  2. @Gary on 2015/09/02 at 10:11 pm and @Steve R on 2015/09/03 at 8:37 am – We will have to wait until the law is published to see how properties at cannot be issued with Title Deeds are defined.

    But for example, friends have a property that was overbuilt by the developer by around 40% and I’m pretty sure this will be one of the 2,000 that cannot be issued with a deed.

  3. Hi Nigel
    I am not quite grasping this. I live on a site that has 7 properties. Our builder did a runner some years ago leaving the whole site incomplete. There is no road or footpaths, no street lighting and the sewage system is not to regulations although it seems to work fine. For obvious reasons there isn’t any completion certificates for the site or any of the individual properties. Could we all apply individually for our title deeds now. Every property has been paid for in full.

  4. If a development is currently incomplete but the residents work together to finish the development, will this new bill then cover them. That is, for the 2000 in question, is there potential to move forward. I understand there will be differing levels of incomplete.

  5. Nigel good news for sure! any news on the 2000 cases that wont be covered, ? when ‘they’ mention not completed below what does that mean, half completed? or too soon to say again?

    As pointed out by the Land Registry during the joint session of the parliamentary Committees for Finance and Interior, for the majority of the 48,000 cases for which title deeds have not yet been issued there are ongoing procedures to solve the problem as soon as possible with the exception, of around 2000 land developments, that have been licensed but never completed.

    (Editor’s comment: I read this article a couple of days ago. I don’t know if it refers to 2,000 developments or 2,000 properties (which I think is more likely the case). Changes to the planning laws introduced in 2011 should allow properties on a development to be issued with Title Deeds even though the development has not been completed. We’ll have to wait and see exactly constitutes licensed but uncompleted developments.

    Update – the 2,000 properties relate to developments that have been authorized but not completed, or developments that are incomplete and will be unable to secure a title. )

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