Many foreign investors and local buyers have concerns when the immovable property they are interested in does not have a title deed, or rather a “separate title deed”. This article explains why properties may not have a separate title deed and whether it should be stopping a potential investor rejecting a bargain or a potential buyer letting his “dream house” go.
Title deeds and how they are issued
The Certificate of Registration of Immovable property, or the Title Deed of the property as it is commonly referred, is a formal document issued by the Land Registry which provides conclusive evidence of property ownership. In addition, it includes among others, details about the property’s location, reference number and size.
All land in Cyprus has a title deed. The problem commonly arises when the land is being developed into buildings and apartments as a process needs to be undertaken to divide the land into smaller pieces if necessary, convert it into plots allowing construction and actually constructing the properties in question. Every step of the process requires permits from the planning and building authorities of Cyprus.
If the separate title deed has not been issued for the house or apartment in question, then there will still be a title deed for the land, which will be still on the Developer’s name. The purchaser in this case should, if his lawyer has not been negligent, have lodged the agreement
So why do not all properties in Cyprus have a separate title deed?
Separate title deeds may not be issued for three main reasons. The first type of reasons are problems during the process of development. For example, the developer may not have correctly concluded or filed all the necessary actions and applications needed or he may not have followed the planning and building permits guidelines on construction. In this situation, actions need to be taken to legalise the structural changes or conclude the necessary actions outstanding.
The second type of problems are developer-related, such as non-payment of taxes or discharging mortgages. In this case, the property-owner should file the necessary applications for the issuance of a separate title deed and the transfer of that title deed to his own name. The process, takes approximately 18-24 months to conclude.
The third problem may simply be the delay of the Land Registry or other governmental departments to issue the separate title deeds. Some developers are more diligent than others and chase the authorities more and as such manage the issuance of the separate title deeds faster than others.
Can I buy a property without a separate title deed?
One has the ability to buy a property without a title deed but proper due diligence should be made first to examine the reason why the title deed has not been issued yet. In addition to that, the selling price is always a consideration; the purchase may be a bargain.
Other important factors are (i) the intended use of the property; for example, short-term or long-term rental, which may not be affected by the absence of title deed and (ii) the “emotional value” to the buyer. Simply put, the buyer may believe that this is an ideal place for him/ her to live in and be worth the time and costs to issue a separate title deed.
To conclude, prior to buying a property in Cyprus that does not have a separate title deed the interested buyer should examine the reason, the price and the intended use. It is not always a bad idea to buy a property without separate title deeds but the buyer must proceed with caution and reach a well-considered decision.
This article has been written by Solonas Antoniou.
This article does not constitute legal advice and is provided only for information purposes. You should seek legal advice prior to proceeding with any purchase and should not rely on it without doing so.