MPs UNANIMOUSLY approved amendments seeking to improve a 2015 law that aimed to resolve the ‘trapped buyers’ issue, where thousands of property buyers were left stranded without a Title Deed despite having paid for the property.
In 2015, parliament passed a law aimed at helping thousands of trapped buyers who had paid for their properties in full but had not been issued with their Title Deeds because the developers had their own mortgages on the properties, which they failed to repay.
Since developers’ land and buildings are counted as assets that need to be offset against their debt to banks, this gave banks a claim on properties that had been mortgaged by developers.
The head of the land registry had been granted the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions, as the state sought to sort out the Title Deed mess.
However, banks contested the trapped buyers law and won rulings at district court level stating it was unconstitutional. Courts said it violated Article 26 of the constitution, which affords individuals the right to enter freely into any contract.
The matter is before the Supreme Court, which will have the final say.
The amendments seek to ensure the involvement in the process of all three parties – buyer, lender, and seller – and affords the capacity of filing a substantiated objection and securing a court order within a defined timeframe to stop the transfer.
The state legal service had expressed reservations on the matter, arguing that as long as the land registry director’s authority to remove encumbrances remained, the constitutional snags could not be resolved.
House President Demetris Syllouris said he too was a trapped buyer and informed MPs that in two visits to the UK, British MPs had raised the issue.
Akel MP Aristos Damianou said thousands of Cypriots and foreign nationals found themselves in a difficult position, remaining without a Title Deed to the property they had fully paid without it being their fault.
The land registry said some 30,000 people were affected.
“We are affording the land registry a new opportunity to tackle legal obstacles set by the banks in the process,” Damianou said.
Despite the problems, around 6,500 people managed to secure a title under the 2015 law.