In a significant development impacting immovable property transactions and title deed transfers, recent amendments to the Sale of Property (Specific Performance) Law, enacted as Law N. 132(I)/2023, have legitimately taken effect as of December 12th, 2023.
These amendments came into force in order to safeguard the purchasers’ interests in advance, in real estate transactions with the primary objective of the amended law being to evolve the secure transfer of Title Deeds, ensuring full legal certainty for the parties involved.
The amended Law applies to Contracts signed on or after the 12th of December 2023 and according to Legislators, aims to establish a comprehensive mechanism intended at safeguarding the interests of Buyers in immovable property transactions.
Pursuant to the provisions of the amended Law, Sellers are now statutory obliged to include an Immovable Property Search Certificate (Search Certificate), obtained by the Land Registry Office, which will be listing any encumbrances on the immovable property that is under sale. The said Search Certificate must be attached to the Contract of Sale as an Appendix, forming an integral part of it and most importantly, it must be dated no later than five (5) working days from the date the Contract of Sale bears as the signing date, or (5) working days prior to the signing of the Contract of Sale.
It is impeccably defined in the amended Law that non-adherence with the Law, the Director of the Land Registry Office has the discretionary power to impose administrative fines, of up to:
- €100,000 on mortgage lenders who deliberately fail to comply with their obligation of accepting the amount specified in the Type A form and proceed with providing the Type B form for releasing the relevant immovable property from the mortgage; and
- €10,000 on sellers who fail to provide a Search Certificate as an integral part of the Contact.
In relation to Contracts of Sale that involve immovable Properties which are subject to mortgages or lodged Agreements, their submission to the Land Registry, following the amended Law, can now be accepted only if accompanied with a written Declaration (Type A) which should be signed by the Mortgagee and Seller, confirming that upon payment of the 95% of the Purchase Price amount, the Mortgagee shall issue a second Declaration (Type B) to the Purchaser confirming that they will release the Property from the said mortgage.
This amendment holds significant importance as it empowers the purchaser to transfer the title of the property, even if the mortgagee fails to release it from the mortgage, by presenting the Type B Declaration to the Land Registry Office.
Overall, these legislative changes reflect on a proactive approach to improve the security and efficiency of property transactions, aligning with broader efforts to strengthen legal frameworks and promote transparency in real estate dealing in Cyprus.
The Sale of Property (Specific Performance) Law N. 132(I)/2023 (only in Greek) can be found here.
Cyprus Land Registry announcement can be accessed here.
Our team of Property Law professionals will be pleased to assist you in any immovable Property transaction. With a commitment to excellence, we advocate on behalf of both Sellers and Buyers, in both commercial and/or residential transactions, ensuring meticulous representation and providing legal advice throughout the legal process.
For inquiries or legal assistance, please do not hesitate to contact us at info@kpklegal.com.
Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Readers are advised to consult with legal professionals for advice specific to their individual circumstances.