CYPRIOT MPs took a giant step to resolve the island’s Title Deed-cum-fraud mess that has blighted the property sector and tarnished the reputation of Cyprus at a plenary session of parliament earlier today.
They approved the ‘hidden mortgage’ bill that will sort out the mess created by the failure to provide Title Deeds to people who have paid for their property and fulfilled all their contractual obligations, due to their developer’s debts.
The new law gives the Land Registry the authority to exempt, eliminate, transfer and cancel mortgages and/or other encumbrances, depending on the case and under certain conditions – and includes all sales that took before the end of 2014.
Assuming President Nicos Anastsiades gives his assent to the bill, it should become law in a matter of days when its content will be in the public domain.
From early reports it seems that two amendments were made to the draft bill:
- Title Deeds will not be transferred to buyers who have failed to comply with their contractual obligations to the vendor regarding Immovable Property Tax, local property tax and sewerage tax (a failure to pay communal charges to the developer will not prevent the transfer.)
- If the purchaser effects the transfer of the property within 60 days, the Property Transfer Fees may be paid in twelve monthly instalments OR a 10% reduction in the fees will be granted.
From information I have gleaned today I believe that the outstanding debts include all claims that were lodged at the Land Registry before and after a contract of sale was deposited.
Trapped purchasers must be able to demonstrate that they that they have fully complied with their contractual obligations to the vendor and should gather together payment receipts to be presented as confirmation when they submit their application.
If purchasers have lost or were not provided with receipts, it should be possible to obtain cheques, transaction records, etc. from the bank. (A Cypriot who contacted me managed to get copies of his cheques confirming payments from his account with the Hellenic Bank.)
Those who paid in cash without receiving any form of invoice or receipt and who therefore cannot provide the necessary evidence to confirm that they have paid will face problems and may have to bring a civil action in a court if their vendor refuses to provide them with a receipt.
It is my understanding that in the longer term, legislation will be introduced that will enable Title Deeds will be issued for all dwellings that are habitable. However, those dwellings that infringe planning regulations may have ‘notes’ attached to their Title. Also money owed by the vendor will be deducted from payments received from the sale of property before being credited to his account (just like many other European countries.)