This guide explains the procedure to transfer the Title Deed of a property in Cyprus where the developer has failed or is incapable to do so, for example because of pre-existing mortgages, other charges on title or financial problems. For this reason, the law refers to them as “trapped buyers”.
Trapped buyers apply to the Land Registry for the transfer of title deed and if successful they manage to “bypass” the developer and achieve the transfer of the Title Deed onto their names.
Requirements for a blocked title deed application
In order to apply for a blocked title deed application, buyers of a property in Cyprus need to have fulfilled their contractual obligations to the vendor. Typically, this would mean that they paid the entire purchase price. If they haven’t done so already, the Land Registry will require the payment of the purchase price in order to allow the application.
In order to file an application for the property in question, a contract of sale or an assignment contract must have been lodged in the land registry by the 31st of December 2014. If the purchase contract was not lodged in the Land Registry, the buyer of a property in Cyprus should apply for a Court order permitting the lodging of the agreement. Once it is issued, the applicant may apply.
Who may apply for a blocked title deeds application?
The law permits the following people to file an application:
- Buyers. Any buyers who have yet received the Title Deed to the property in Cyprus they purchased, may apply for its Title Deed regardless of whether its Title Deed has been issued; the fact that there may be mortgage etc. preventing its transfer is immaterial. In cases where the Title Deed has yet to be issued, the applicant has the right to apply to the Department of Lands and Surveys for the compulsory acquisition of title according to the provisions of Part VI of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224.Where a property in Cyprus has been purchased in joint names it is not necessary for both buyers to submit an application. Instead, one of the buyers may apply.
- The Director of the Department of Lands and Surveys
There are typically 4 steps for applying for the transfer of blocked title deeds in Cyprus:
- Preparing and Lodging the Application and the supporting documents.
- Land Registry Examination.
- Notices sent to Seller and Buyer for any objections
- Transfer of the title deed
1. Lodging an application
Completed Title Deed Applications Forms may be filed at any Land Registry Office in the Republic regardless at which their Contract of Sale was deposited.
The applicant-buyer of a property in Cyprus needs to submit the relevant documents to support their application (the existing title deed for the property, proof that the money for purchasing the property was deposited in a financial institution (e.g. a bank), fulfilment of all contractual obligations to the vendor (taxes etc.)
If the applicant-buyer declares that has not paid the full purchase price he will be required to pay the balance into a special temporary account in the name of the Director of the Department of Lands and Surveys. This money will not be paid to the vendor until the Title Deed for the property has been issued and registered in the name of the purchaser.
2. Land Registry’s examination of the application
Once the Land Registry has accepted the Title Deed application, they will start their investigation into the case. The Land Registry will check the three basic conditions, regarding the property in Cyprus, that must be satisfied before the transfer of the Title Deed in the name of the buyer can take place, specifically that:
- The property’s purchase price has been paid in full
- The title deed for the property exists.
- The title deed for the property exists.
- The property buyer has fulfilled their contractual obligations and paid the taxes.
Once the above three provisions have been satisfied the Department of Lands and Surveys in Cyprus (the Land Registry) will send interested parties* a notice advising them that it intends to transfer the property to the purchaser and requesting any objections they may have, giving them 45 days to respond.
The Department of Land and Surveys in Cyprus will investigate any objections it receives and will advise interested parties of its decision once its investigation has been completed.
4. Transfer of the title deed
Once investigations have been completed, notices will be sent to the buyer and to the vendor requesting them to transfer the property to the buyer with 60 days of the notice being issued – and requesting the buyer to pay the Property Transfer Fees within the 60-day notice period. Within the 60-day notice period the buyer may attend the DLO without the vendor being present and pay the Property Transfer Fees.
Note that if the buyer fails to pay the Property Transfer Fees, the transfer will still go ahead. However, an encumbrance will be lodged against the property corresponding to the amount of the transfer fees increased by fifty percent. However, If the transfer takes place by 31st December 2016, a further 50% reduction in transfer fees will be applied if the purchaser did not pay VAT on the property’s purchase price – or a 100% reduction if the purchaser did pay VAT on the purchase price.
*Interested parties are those who have registered ‘encumbrances’ (claims) against the property in question who have the opportunity to object to the transfer and/or request the transfer of their encumbrance within the 45-day period. Note that the vendor (developer) may only object if the buyer has not fulfilled his contractual obligations. The contract is void.
Other useful information
1. How long does a blocked title deeds application take?
The time it takes to process a blocked title deeds application depends on the workload of the District Land Registry in question. At the time of drafting this guide, a blocked title deed procedure typically takes from 12 to 18 months for its successful completion.
2. Does the separate title deed for the property in question have to be issued in order to apply for a blocked title deeds application?
No, the buyer can apply even prior to the separate title deed being issued. However, the Blocked Title Deed application will be pending until the separate title deed is ready.
3. Does it matter that the developer is bankrupt or under liquidation?
No, the Blocked Title Deed application will proceed regardless if the developer is bankrupt or under liquidation. In fact, the whole procedure is to bypass the developer and transfer the Title Deeds of the property to the Trapped buyer.