Cyprus is one of the most popular property investment
markets of Europe and buying a property in Cyprus can be easy and
satisfying. This popularity, however, has being shadowed by allegations
that a very large percentage of properties in Cyprus have no title deeds - the legal
documents that show who owns a property. To say the least, such general
and indiscriminate claims are irresponsible; if there are problems –
and there are - it is not the norm. The truth is that Cyprus properties
do have titles, and the procedure of transferring a title can be done in
a day by the vendor and buyer in person, or by an appointed third party
with a Power of Attorney through the Cyprus Land Registry Office. What is
then the problem with the Cyprus property title deeds?
The problem lies with the bureaucratic process of issuing title deeds,
and it largely affects properties bought ‘off plan'. For example, when
a developer constructs an apartment
building, the developer has a title deed for the land. Each apartment
that is constructed in the building, however, needs to be issued with its
own title deed, but until all the apartments are completed and inspected
against the approved plans and permits, no title deed can be issued for
the individual apartments. This process is lengthy and causes delays
which the government argues is due to a backlog at the Cyprus land
registry.
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Without a certificate of approval a buyer of an ‘off plan' apartment
cannot legally live in the property, because according to Cyprus
legislation ‘no person shall occupy or use, or cause, or permit, or
suffer any person to occupy or use, any building unless and until a
certificate of approval has been issued by the appropriate authority'. So
it is very important that a buyer does not accept delivery of the
property he/she bought unless the developer provides him/her with a
certificate of approval.
To ensure he/she will receive the certificate upon delivery and that
he/she will not loss money by not being able to enjoy his/her property,
the buyer can include this clause in the contract of sale. In addition, a
buyer can include a damage clause in his/her contract which states that
an amount of money will be paid to him/her by the developer if the title
deed is delayed due to the fault of the developer; such a clause can
protect the buyer also in case of a delay of the title deed because of
planning violations caused by the developer's deviating from the
permissions and permits that were issued for the construction of the
property, or when a developer has built a property without planning and
building permits.
Also, when buying a property ‘off plan', it is advisable that the
buyer stamps and registers his/her contract of sale with the Land
Registry for additional protection under Cyprus law. If a buyer through
his/her legal adviser cannot negotiate the above damage clauses in
his/her contract of sale, he/she should walk away from the purchase.
What about the claims of some people that the reason they have not
been issued with Cyprus title deeds is that the developer mortgaged the
land on which the properties have been built? Α handful of developers in
the past sold mortgage encumbered homes to unsuspected buyers. After this
fraudulent practice came to light back in 2008, things started to changed
and Cypriot lenders today are asking the relevant hard questions before
handing out mortgages to construction companies. To ensure that the
property is not encumbered by a mortgage, buyers are strongly advised to
ask their legal adviser to conduct a search of the Land Registry Office's
records relating to the property they are buying before they sign their
contract of sale.
The delays in issuing Cyprus property title deeds is indeed a serious
issue that needs to be addressed in order to simplify and speed up the
process, so buyers can enjoy their properties and their right to
ownership – a fundamental human right that is protected by the equality
provisions of the constitution of Cyprus.