In a landmark legislative development for the Cyprus property sector, the House of Representatives passed new legislation in June 2025 designed to address the long-standing issue of so-called “trapped buyers”, individuals who, despite having paid the full purchase price for immovable property, have been unable to obtain legal ownership due to existing encumbrances such as developer mortgages, planning infringements, or unpaid taxes. The new framework aims to provide legal certainty and a viable path to title deed acquisition for multiple affected buyers, both local and foreign.
Background to the Trapped Buyers Problem
The phenomenon of trapped buyers has its roots in the rapid expansion of the property market in the early 2000s, during which numerous purchasers, particularly non-Cypriot nationals acquiring holiday or retirement homes, entered into agreements with developers for properties sold off-plan. Although these purchasers fulfilled their contractual obligations, many were left without title deeds as the properties were burdened by mortgages or other developer-related liabilities, which in many cases predated the deposit of the buyers’ sale contracts with the Land Registry.
To address this systemic issue, Law 139(I)/2015 (commonly referred to as the “Trapped Buyers Law”) was introduced. It enabled buyers who had filed their sale agreements with the Department of Lands and Surveys by 31 December 2014 to apply for the transfer of ownership without requiring the developer’s or mortgage lender’s consent, provided certain conditions were met. While this legislation allowed for the issuance of over 11,000 title deeds, a significant number of applications remained unresolved, often due to legal complexities such as pre-existing mortgages or unremedied planning violations.
Judicial Intervention and Legislative Response
In June 2024, the Court of Appeal delivered a critical judgment declaring key provisions of the 2015 law unconstitutional, specifically those which allowed for the removal of encumbrances without creditor consent. The judgment was upheld by the Supreme Court later that year, effectively halting the processing of pending applications and reviving legal uncertainty for thousands of buyers.
In response, the government initiated a legislative overhaul in cooperation with the Legal Service, the Ministry of the Interior, and stakeholders including the Cyprus Bar Association and the Association of Cyprus Banks. The result is the Transfer and Mortgage of Immovable Property (Amendment) Law of 2025 (Law 110(I)/2025), which introduces a revised and constitutionally compliant framework for dealing with trapped buyer cases.
Key Features of the 2025 Law
The new legislation amends the Immovable Property (Transfer and Mortgage) Law, Cap. 224, and includes several mechanisms to facilitate title deed transfers while safeguarding creditor rights:
- Expanded Eligibility
- The law is available to buyers whose sale contract was deposited with the Land Registry by December 31, 2014, or, if not so deposited, was the subject of a court application filed in a District Court by December 31, 2024, allowing its deposit.
- It applies to the backlog of trapped buyer applications that were suspended following the 2024 Court of Appeal and Supreme Court decisions.
- Court Recourse Against Unjustified Refusals
- If a creditor refuses to consent to the release of an encumbrance, the purchaser may file an application with the court within 45 days of receiving the refusal.
- Upon filing, all related legal and administrative procedures are suspended, preventing parallel enforcement actions.
- Removal of Encumbrances
- Where lender consent is secured or a court order is granted, the Director of the DLS may proceed to deregister mortgages or charges, allowing transfer of legal title.
- In cases involving mortgages predating the sale contract, court intervention or lender consent remains mandatory.
- Procedural Timeframes
- Applicants with pending cases must submit all necessary supporting documents within eight (8) months.
- If, after 32 months from the commencement of the process, the title deed has not been issued due to continuing legal obstacles, such as serious planning violations that cannot be regularised, the Director of the Department of Lands and Surveys may reject the application, bringing the process to a formal close.
- Urban Planning Amnesty Provisions
- Where planning irregularities prevent title issuance, the law permits the registration of the property in the developer’s name if the infringements fall within the scope of existing planning amnesties, allowing further remedial steps.
Implications for Buyers
The legislation offers a renewed legal avenue for thousands of affected buyers, particularly:
- Buyers whose sale contracts were deposited with the Land Registry after an existing mortgage or other encumbrance, now have the ability to apply to the court for an order compelling the removal of the encumbrance if the creditor unreasonably refuses consent.
- Applicants whose cases have remained dormant due to lack of administrative progress, will see movement as the new law imposes strict deadlines on both purchasers and the Department of Lands and Surveys to act.
- Buyers whose properties are subject to minor or regularisable planning infringements, may benefit from the provisions of the latest urban planning amnesties, enabling the issuance of separate title deeds.
Nonetheless, the law does not entirely resolve the issue. Several challenges persist:
- Buyers impacted by serious planning violations remain excluded from relief.
- Complex cases involving pre-contractual mortgages will require additional legal work and possible litigation.
- Strict procedural deadlines, such as the 45-day window for court filings and the eight-month deadline for document submission, may prove burdensome, particularly for foreign buyers or heirs residing abroad.
Recommendations for Trapped Buyers
Buyers seeking to utilise the benefits of the 2025 framework should take the following steps:
1. Confirm Legal Standing
Ensure that the sale contract qualifies under the new criteria (either lodged with the Land Registry by 31.12.2014 or filed with the District Court by 31.12.2024).
2. Conduct a Property Search
Obtain a DLS search certificate to identify any charges, encumbrances, or irregularities attached to the property.
3. Obtain Professional Legal Assistance
Engage a qualified property lawyer in Cyprus to assess eligibility, handle communication with the DLS and creditors, and represent you in court proceedings if necessary.
4. Act Promptly
Adhere strictly to the statutory deadlines to avoid loss of rights due to procedural non-compliance.
5. Stay Informed
Monitor announcements from competent authorities, as further amendments or planning amnesties may follow.
Conclusion
The 2025 legislative reform marks a decisive step toward rectifying the injustices experienced by trapped buyers in Cyprus. While not a panacea, the new law creates a structured, constitutionally compliant mechanism that balances private property rights with the legitimate interests of creditors. It sends a positive signal to the property market and provides a viable pathway for long-delayed title deed transfers, provided buyers act diligently and obtain competent legal guidance.
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.