ACT NOW as the new Cyprus ‘hidden mortgage’ law is now in force enabling ‘trapped’ buyers who are unable to get their Title Deeds (and others) to submit a request to the District Land Office to resolve the situation. By: Nigel Howarth Published: Tuesday 5th January 2016
TWO days ago, Land Registries across Cyprus started accepting applications under the provisions of the ‘hidden mortgage’ law. Application forms are now available in English and Greek that you may download, complete and take to the relevant Land Registry office together with the information requested.
The Ministry will publish further details shortly.
The key points of the law from a purchaser’s perspective are as follows: The law applies to all cases where a contract of sale to purchase a property (or part thereof) that was deposited at the relevant District Lands Office on or before December 31, 2014. It also applies to those cases where an order for ‘Specific Performance’ has been granted by a Court.
Those entitled to submit an application are the property’s purchaser, its vendor, the potential mortgage lender and the borrower under the loan agreement with the purchaser.
Articles 44IH to 44KST apply regardless of other provisions of this Law, the Bankruptcy Law, part IVA and V of the Companies Law and the provisions of any other law in force.
For successful applications where a Title Deed for the property has been issued
(1) if the purchaser has fully paid the purchase price or
(2) has paid part of the purchase price and agrees to pay the balance into a special suspense account,
or. Where a Title Deed for the property has not been issued
(1) if the purchaser has fully paid the purchase price or
(2) has paid part of the purchase price and agrees to pay the balance into a special suspense account:
a Title Deed will be issued and transferred wherever possible.
The Director of the Land Registry may request relevant information from any of the parties concerned that is necessary for examining the application. If a person other than the applicant refuses, fails, or neglects to supply the information within the period requested, they may face a fine of up to €10,000 and an additional charge of up to €100 for each day that the violation continues.
In cases where an application is successful, the purchaser will be requested to pay the Property Transfer Fees within 60 days of a notice to transfer the property. If the purchaser pays within the 60 days they will be entitled to a 10% reduction in the transfer fees or pay the transfer fees in 12 monthly instalments.
If a purchaser neglects, omits or refuses to pay the Property Transfer Fees within the stipulated period, the property will be transferred and registered in their name and the Director will lodge an encumbrance against the Title amounting to 150% of the unpaid Property Transfer Fees.
The law includes the ability to appeal and object to various decisions.
Further reading The law amendment ΝΟΜΟΣ ΠΟΥ ΤΡΟΠΟΠΟΙΕΙ ΤΟΥΣ ΠΕΡΙ ΜΕΤΑΒΙΒΑΣΕΩΣ ΚΑΙ ΥΠΟΘΗΚΕΥΣΕΩΣ ΑΚΙΝΗΤΩΝ ΝΟΜΟΥΣ ΤΟΥ 1965 ΕΩΣ (ΑΡ. 9) ΤΟΥ 2015. Please note that the first 17 pages contain the law in Greek as published. The remaining pages contain an unofficial English translation.
Update 17 September The Paphos District Land Office has confirmed that the 10% reduction in Property Transfer Fees referred to above is in addition to the 50% reduction available if the transfer takes place by 31st December 2016.
Update 28 October Since publishing the article on 9th September around 4,000 ‘trapped’ buyers have applied for the Title Deeds to the property they purchased under the new ‘hidden mortgage’ law.
As readers may appreciate I’ve received numerous emails from ‘trapped’ buyers who have run into problems:
Immovable Property Tax – Tax offices require applicants to provide receipts confirming they have paid Immovable Property Tax for years 2014 and 2015.
Some have no receipts or true copies of receipts because – they paid via a currency exchange company, their developer refuses to give them receipts, they paid via their lawyer who is trying to extort money from them in exchange for the receipts.
In these cases ‘trapped’ buyers need to swear an affidavit in court (a lawyer is not needed) that they have fulfilled their contractual obligations to the vendor – or written confirmation from all interested parties that the purchaser has fulfilled his contractual obligations.
In addition, purchasers gather as much information as they can that they have paid for the property. This could include details of the currency exchange transactions, bank statements, etc. (One enterprising individual who paid by cheque managed to get certified copies of the cheques from his bank.) A Title Deed has not been issued yet – In addition to the application for the transfer of property , trapped buyers may be asked to complete an application for the forced issuance of the Title Deed for the property. (In some cases applicants are also required to sign a declaration/acknowledgement that their application will be activated when a Title Deed has been issued).
On receipt of the forced issuance of Title Deed application the director of the Land Registry will give a 60 day written notice to the vendor demanding that they file all the necessary documents and take any and all actions that may be necessary to enable Title Deeds to be issued. If the vendor does not comply they face a penalty of €10,000. (In cases where the development company is in receivership/liquidations, the receiver/liquidator is responsible for providing this information.)
Contract of sale. The ‘Registered Contract of Sale No’ required in answer to question ‘A-2 Contract of Sale’ on the application for the transfer of property refers to the number written on the receipt provided by the Land Registry when the contract of sale was deposited at their office. (Some have found the Land Registry staff very helpful in tracking down this number from the contract of sale.)
Update 5 January 2016
To date more than 5,000 individuals have applied for their Title Deeds under the provisions of this ‘trapped buyers’/’hidden mortgages’ law and some purchasers have received their Title Deeds.
However, it appears that some Land Registry staff who are dealing with applications appear to be making up new rules as they go along. For example:
Despite providing evidence that they have paid the full purchase price for their property, Land Registry staff are demanding that they buyers obtain a letter from their developer confirming that that have paid. This not a requirement of the law and some developers are using this as an opportunity to extort money from their clients.
In cases where the property forms part of a larger development, Land Registry staff are advising purchasers that a single unit cannot be transferred and that the complete development has to be dealt with before a single deed can be issued. This is not a requirement of the law.
In situations where a developer has not paid their Immovable Property Tax, Land Registry staff are advising applicants that the deeds to the property cannot be transferred until their developer’s outstanding tax liabilities have been paid. This is not a requirement of the law but it does state that the transfer of a property cannot take place if the purchaser has outstanding resulting from their contractual obligations to pay Immovable Property Tax, municipality/community and sewerage charges.
In other cases, Land Registry staff are demanding that applicants pay their developers IPT liability for 2013 plus any penalties – and then proceed to issue a receipt to the applicant in the name of the developer. This is not a requirement of the law.
One further point to note is that the law does not take into account the failure of a developer to fulfil his obligation to pay municipality/community and sewerage charges. As a consequence, many applications will not be processed until these debts have been paid.
Read more at: http://www.news.cyprus-property-buyers.com/2016/01/05/get-your-title-deeds-act-now/id=0096019
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