Recent amendments in Cypriot legislation have created a higher level of protection for aspiring purchasers of Property in Cyprus. The main source of protection for buyers emanates from "The Sale of Real Estate (Specific Performance) Law of 2011 (Law 81 (I) 2011)" and as amended by Law 132(I)/2023.
The prerequisites for benefiting from this protection are clearly stipulated in Articles 3 and 3A of the relevant law.
The submission of the Contract of Sale by the Purchaser is the main prerequisite to protect the property according to the Law. The purchaser of a Property in Cyprus has to submit the Contract of Sale concluded with the Seller to the Land Registry of the District in which the Property is situated. If the buyer fails to submit the Contract he/she will not be entitled to claim any right to the property, but can only damages.
The Law provides that to allow the submission of the Contract of Sale to the Land Registry, the following requirements should be met:
- There should be a registration of the Property in the relevant (District) Land Registry in the name of at least one of the sellers, of the Property which is the subject matter of the Contract of Sale, or in which it is included a part which is the subject matter of the Contract of Sale.
- The Contract of Sale should be in writing.
- The Contract of Sale should identify adequately the parties to the sale.
- The Contract of Sale should adequately describe the property which is being sold.
- The Contract of Sale should mention the purchase price.
- The Contract of Sale should be signed by all parties to the agreement.
- The submission should be performed within 6 months from the date that the Contract was signed, in the Land Registry of the District in which the property is located. It is important to note that in this timeframe the purchaser should also have the Contract of Sale stamped by the Tax Department.
The recent amendments in the legislation further provide a better understanding to the buyer regarding the legal status of the property in regards to encumbrances and/or other Contracts of Sale. This is due to the fact that it is now imposed by law for every Contract of Sale concluded on or after 12/12/2023 to be accompanied by a property search, which includes valuable information in regards to the property, such as its location, the registered owner, any encumbrance and any other contract of sale existing on the property.
This obligation to include a property search is imposed on the Seller. The date of the property search should be dated not later than 5 working days from the date of the signing of the sale agreement. The Director of the Land Registry may impose a fine of up to 10000 Euros on any Seller not conforming with this obligation, to include the up-to-date search certificate.
The recent amendment of the Law also provides that whenever the property is burdened by a mortgage, the Land Registry will lodge the Contract of Sale only after receiving a duly signed written declaration from the mortgagor (usually a Bank) and the Vendor, declaring that the buyer has been informed in writing about the existence of the mortgage.
Moreover, the recent amendment by Law 132(I) of 2023 allows the buyer to deposit the purchase price for a property directly in the bank account of the Seller with the mortgagor. The mortgagor is then obliged to exclude the property from the encumbrance, so the property can be transferred into the name of the purchaser, irrespective of any mortgage that burdens the property.
All the above innovations have strengthened the already existing net of protection for the buyer concerning the purchase of property in the Republic of Cyprus. Our Cyprus Law firm is able to guide you and assist you through the process of acquiring a property in the Republic of Cyprus while ensuring that your legal rights on the property are protected.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.