Deputies on Wednesday were discussing a mechanism aimed at protecting – and preventing – trapped buyers, after Finance Minister Constantinos Petrides submitted a bill to the House legal committee.
The aim is to avoid the situation whereby thousands of homeowners were left without their Title Deeds despite paying for their properties in full because the building developers had mortgages on the properties.
The Law on the Sale of Real Estate 2022 he submitted for discussion aims to ensure the transfer of any property will be executed immediately and as soon as the buyer fulfils their contractual obligations.
“The aim is to protect buyers so that the phenomenon of trapped buyers disappears before it even occurs,” Petrides said.
It has a threefold impact by ensuring the project will be completed, the mortgage will be settled and there will be no issues for buyers to obtain a title for their property, he added.
The bill seeks to ensure new buyers have the legal security that when they fulfil their contractual obligations, the transfer of the property will take place, without obstacles, he added.
Specifically, if the project a developer is working on is mortgaged, the developer will be required to inform the buyer. Depending on the development of the project, the full amount of the sale must be deposited to the bank and the bank will confirm that the project has been completed.
The bank will also provide a written confirmation to the property buyer that by depositing the full amount, the mortgage will be cleared.
Should the bank default on its commitment, the head of the land registry will clear the property of the mortgage.
“This is the only way to ensure buyers’ money will go for the property the buyer is paying for and we will never again see half-finished projects like we did before, with buyers falling victim,” Petrides said.
The procedure follows a Central Bank of Cyprus directive and is compliant with legislation other countries follow, he added.
In 2015, parliament passed a law aimed at helping thousands of owners 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.
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.
In July 2018 banks and the legislature struck a gentlemen’s agreement aiming to resolve the matter. In exchange for MPs approving legislation, making it easier for banks to collect their dues, the banks association agreed not to raise any objections over the issue of buyers trapped without Title Deeds as long as the transaction was done in good faith.
The protection afforded to ‘trapped’ property buyers was last year extended until the end of 2022.
Thank you for your reply Nigel. We do have all the receipts and invoices. It is just a matter of how long it will be before the Land registry will release the deeds to us. I cannot get over the cheek of the man to ask for this “extra” money, but also that our Lawyer thinks it’s ok for us to do this.
We purchased a property around 15 years ago and paid in cash in full. All the necessary legal bits were done, specific performance, land registry has the contract deposited. We have sold the property,but the developer is refusing the transfer the fees, which have no encumbrances on them unless we pay E24,000…..he has since lowered it to E16,000. We are stuck now waiting to hear from land registry whether they will release the deeds. How can our Lawyer even inform us of his wanting this money when it is against the law. The buyers paid a deposit and secretly moved in, they are not paying rent but our Lawyer is uninterested in trying to evict them or sue them for rent. At one point we even found our property on the internet for sale by the Developer. We are well and truely stuck.
Unfortunately, crooks masquerading as property developers are known to charge their buyers money for imaginary ‘extras’ and/or administration fees before releasing the deeds. If you have kept invoices and payment receipts, this crook shouldn’t delay you for too long.
I bought a property via Paschalis about 15 years ago, who went bust a few years ago, the complex in Tersafanou which is supposedly over 50 % sold out only has about 10 finished apartments out of 85
Paschalis treated a deposit as a sale apparently
I have a small mortgage balance left but the apartment is unsaleable and worthless unfortunately, so I have lost all my money 150k plus I would estimate
Dire situation for me and many others
I’m sorry to hear what’s happened to you and many others. Have you tried contacting the official receiver to see if you can recover any of your money?
It is clear that MPs do not understand the breadth and depth of Title Deed fiasco (or they’re burying their heads in the sand.)
Speaking at the House Finance Committee on Monday Finance Minister Nicos Nouris said that as many as 15,000 Title Deed applications were waiting to be approved and “a large number of these buildings cannot be granted a Title Deed (because of planning infringements) and perhaps the only remedy would be their demolition.”
As for the planning infringements, no-one can be held responsible for fixing them and taken to court. (I received legal advice on this matter.) The only current solution is for those who bought properties with planning infringements is to pay for the remedial work themselves.
It’s disgusting mess that needs to be resolved if Cyprus wants to repair its heavily tarnished image and return any sort of credibility to the real estate market.