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Guidance for transferring the property in the name of a “trapped buyer”

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There are certain cases in which a buyer of immovable property can be led into a very unpleasant situation. In particular, these are the cases where a buyer has accomplished all of his contractual obligations under the contract of sale, but he is still not able to obtain the Title Deed of the property that he acquired. Unanimously, the members of the House of Representatives voted in favor of a bill aiming to resolve this problem. The amendment of the Immovable Property Law (Transfer and Mortgage) in the years 2015 and 2019, gave a huge sigh of relief to all these buyers, who we refer to as “trapped buyers”. The new legislation introduced provisions to free the trapped buyer, who is trapped into this situation due to the fact that the property is subject to mortgage or any other encumbrance or prohibition and hence the seller fails to transfer the property into the buyer’s name. In this article we will see the basic provisions of the Law and the requirements for submitting an application for the transfer of the title deed of the property.

Fundamental provisions of the law

Today, as a result of the COVID-19 pandemic, the applications for transferring the property into the name of a trapped buyer are now submitted online to the District Department of Lands where the Contract of Sale has been lodged. In this respect, this law does not apply to the Contracts of Sale that have not been submitted to the competent District Department of Lands. A fundamental requirement for submitting an application is that the Contract of Sale had to have been lodged with the relevant District Department of Lands initially before the 31st December 2014 and subsequently after relevant amendment the 31st December 2019. If the Contract of Sale was not submitted before the above defined date, then the only way for the application to be submitted is for the applicant to apply to the Court for the issuance of a relevant order.

When applying for the transfer of the property, the trapped owner should bring with him the relevant supporting information and documentation according to the requirements of the law. One of these requirements is that the buyer must have paid the full amount of the consideration to the seller in accordance with the terms and conditions of the Contract of Sale. The officer of the Department of Lands will request for the relevant evidence regarding full settlement to be submitted, such as original receipts issued or confirmation from the buyer indicating that the full amount has been paid. In addition to the above, there must be a title deed issued in the seller's name. In case there is no registered title for the property, the applicant has the right to submit to the Department of Lands & Surveys an application for the compulsory acquisition of title according to the provisions of Part VI of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224. Lastly, the buyer must prove that he has paid his liabilities to the Tax Department and relevant competent authorities by the date of transfer of the property into his name.

Who is entitled to submit an application?

The buyer is not the only one who is entitled to submit an application. The law also gives the right to the seller to submit an application for transferring the property into the name of the buyer. In addition, others who are entitled to submit an application are the mortgagee under the mortgage contract deposited in the Land Registry, the lender under the loan agreement with the buyer, the assignee under the deposited assignment contract with the assignor as well as the Director of Lands and Surveys Department (ex officio).

After submitting the application

The whole process, after submitting the application with the relevant District Department of Lands, has specific time frames. Firstly, the officers of the Department of Lands will check whether the application meets the basic requirements of the law as mentioned above. Then, they will send notifications to all the interested parties in relation to the application submitted. The interested parties at this stage have the right to file an objection in relation to the transfer of title to the buyer within 45 days. If any objection is filed within 45 days, the Land Registry must examine the objection and then decide whether it is accepted or rejected. In case the objection is rejected, the seller and the buyer have 60 days in which to transfer the title to the buyer.

A significant number of individuals have taken advantage of this law and have already submitted their applications to the Department of Lands. According to the Administration of the Department of Lands and Surveys, the process of transferring property to the buyers through the implementation of the relevant legislation has been finalized for over 8,000 trapped buyers as at June 2020, while the transfer process is expected to be completed for another 2,000 trapped buyers in the next few months.

The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact Andreas Potamitis, Associate at the Limassol Office, at +357 25 363 685 or via email andreas.potamitis@kyprianou.com

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