30.01.2024
The Republic of Cyprus has strengthened legal protection measures for property buyers thanks to amendments to the laws on the sale of real estate (special execution) for 2011-2020. These changes are aimed at increasing the transparency and security of real estate transactions, providing better protection for buyers’ rights.
The amendments require the seller of real estate to include a search report in the purchase and sale agreement, the date of which should not exceed five business days before signing the contract. This step is aimed at ensuring that real estate information is up to date and accurate at the time of the transaction.
In addition, if a property is encumbered by a mortgage or an earlier deed, the Land Registry will only accept the security for the sale and purchase of that property if it is accompanied by written representations from the mortgagor( s ) (usually a bank) and the supplier( s ) about which the buyer must be informed in writing.
This change in the law will help ensure that property buyers are promptly and accurately notified of any mortgages and contracts encumbering the property, thereby protecting them from potential fraud, especially in cases where developers have mortgaged a share of the land on which they are building. , to secure housing loans for other buyers at their properties.
The mortgagor’s written statement sets out the details of the lien registered on the seller’s property. It applies to contracts between sellers and buyers of real estate for the sale of real estate or any apartments or houses located on it.
If the seller has taken out a mortgage for his own purposes (construction of real estate), the mortgagee confirms that depositing 95% of the contract amount into the seller’s bank account will lead to the removal of the encumbrance on the property. However, if the seller has recorded a mortgage to help another buyer purchase the unit ( s), the amount claimed is zero.
Once the mortgagor has released the property from its mortgage, the Land Registry transfers the property into the buyer’s name, free of the mortgage or any other encumbrances that may affect the property or its new owner.
If the seller or mortgagor fails to comply with their legal obligations, the Director of the Land Registry has the right to impose fines on both parties of up to €10,000 and €100,000 respectively.
The changes to the law address problems that have led to real estate buyers being trapped and increase the legal security and transparency of real estate transactions. The law ensures that properties are transferred to buyers free of any encumbrances and also ensures that the sale price paid by the buyer will be used to pay off any existing mortgages.
