After legislation was passed by the Cyprus government in 2015 attempting to fix the infamous problem of missing Title Deeds and so-called trapped property buyers on the island; unfortunately failed to bring any relief to the many people looking for resolution.
Last week in parliament, the Director of the Land Registry department in Cyprus made a statement that the 2015 laws were ineffective as they had been passed holding that in order to submit a bill of sale to the Land Registry; the property must not have any pre-existing debts or outstanding taxes. After the announcement of the transferal law, over 15,000 applications were filed, of which only 7,000 properties had a legitimate Title Deed.
Out of these 7,000 properties, only half (approximately 3,500) have been transferred to the rightful property owners. The 2015 legislation was passed to reorganise and reform the mess created by the failure to issue Title Deeds to those who had rightfully paid for their property. However has still failed over 10,000 property buyers in Cyprus due to one of two reasons:
- The property was mortgaged by the developer rather than the seller.
- The state couldn’t complete the transfer due to the outstanding tax rule.
Since developers’ land and buildings are counted as assets that need to be offset against their debt to banks, this gave lenders a claim on people’s properties that had been mortgaged by developers. The land registry estimates there are 70,000 of these so-called trapped property buyers on the island.
The 2015 law granted the head of the land registry the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions. But following a string of court decisions, where banks objected to the law, the land registry had suspended procedures, as authorities contemplated their next move.
Nevertheless the Attorney-General’s office had instructed the departments involved to continue implementing the amended law while appeals are brought before the Supreme Courts, which will ultimately have the final say for each individual case. So far the banks have brought almost 300 cases to court, a significant proportion of which reportedly involve Alpha Bank.
Some of the cases brought to the court have been won by the banks, largely on the grounds that the buyer’s claims to the property overstepped on the contract between the bank and the developer. However towards the end of the year in 2016, the Larnaca District Court upheld the amended legislation, allowing trapped property buyers to obtain their Title Deeds regardless of the Developers ownership and subsequent commitment to the bank.
So, even though there have been significant misunderstandings and mixed signals as a result of the new law, the fact remains that a structure is in place to resolve the issue; it’s just a case of fine tuning the details.
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