The Cyprus government is trying to accelerate a resolution to the trapped buyers still without valid title deeds in their name whereby people were duped into buying property built on land in Cyprus that the developer had earlier given to the bank after their mortgages had fallen through.
The Interior Minister, Mr Constantinos Petrides called the title deeds issue an extremely pertinent one as he cautioned it to be a complex legal matter that needed to be examined thoroughly. In an effort to resolve the issue once and for all in 2015, Cyprus parliament passed a government bill granting the Head of the Land Registry the authority to:
- Cancel mortgages or other encumbrances.
Depending on the case circumstances. The law sought to resolve the problems created by the failure to issue Title Deeds to people who had paid for their 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 were counted as assets that are required to be offset against their liability to banks, this gave lenders a claim to buyers’ properties that had been mortgaged by developers. However, following a number of court decisions in cases where banks objected to necessary legislation, the land registry suspended all procedures, as authorities considered their next move.
The attorney-general later instructed the departments involved to continue implementing the law while appeals were filed with the Cyprus Supreme Court, who will ultimately have the final say on the matter. Some court cases have been won by the banks, largely on the grounds that the buyer’s claim on the property infringed on the contract between the bank and the developer. However in September last year, the Larnaca district court upheld the 2015 law, allowing trapped property buyers to obtain their Title Deeds regardless of the developers’ own commitments to banks.
In response to how the government is dealing with the current standstill, Mr Petrides said despite the matter not being resolved, the ministry had prepared a bill which was sent for processing in October last year. “As it transpired from the differing district court decisions, it is a complicated legal issue and due to this an in-depth study is required,” the minister said.
The bill will be forwarded to the cabinet as soon as it is processed by the state’s lawyers and from there to parliament for voting, he added. “The Interior Ministry considers the issue of trapped buyers as very important and the delay in preparing the bill is due precisely to the difficulties cited above.” Mr Petrides reassured, that extreme efforts were being made to speed up the process.