Filing a contract of sale with the Land Registry Office is a form of buyer protection, whether the property has a separate title or not. This measure can be used in court to force the seller to transfer property to the name of the buyer (subject to the buyer’s compliance with the terms of the sales contract).
However, the same clause does not work in favor of the seller in the sense that the buyer can be forced by the court to return the property back to his name.
In these difficult times with limited funding, the lack of seller protection has become a major concern. Some buyers do not have the funds to pay the necessary transfer fees, others do not care, and still others disappear (usually foreign buyers).
Based on my own experience, I would like to give examples of this state of affairs.
Paphos – The project under our management includes 31 apartments; only 21 buyers favored the transfer, despite awarding titles 2 years prior and numerous invitations to continue the transfer.
Limassol. Of the 85 apartments in the project, only 29 have been listed for sale after years of ownership delays. So, based on my experience, approximately 30% of the total number of buyers do not make a transfer.
This unhealthy situation is unacceptable and government/parliament should look into it because:
If the property is not transferred to the buyer, ownership remains with the seller/developer; the latter is then responsible for paying the property and any municipal taxes, while the tax authorities may place a “memo” on the seller’s property until such taxes, including interest for delay, have been paid without their fault.
The disappearance/non-response of buyers whose contract has been deposited with the Land Registry does not allow the seller to terminate the contract of sale in order to resell the property. While in most cases where the seller has offered a commercial bank guarantee, this is a different matter as in such cases a lengthy legal battle is required to secure the return of the property to the seller, which can be as long as 2-3 years and an added value by the seller of €3000-5000.
Even if the seller successfully terminates the contract, if the buyer has leased the property to third parties, the seller is stuck in a lease that restricts the sale to third parties.
The seller usually offers a bank guarantee to ensure the safety of the buyer, but these guarantees are only released when the property is actually transferred to the buyer’s name. How is this possible if the buyer is not presented for transfer?
All this is completely unfair to the seller, since the pledge under the sales contract only protects the buyer, leaving the seller unprotected.
Recently, a new rule was introduced into the law, stating that the seller can force the buyer to appear for the transfer. However, if not, then the seller must force the transfer, but pay the buyer’s transfer fee, any taxes, and capital gains, and then the seller will sue the buyer again to recover.
In fairness, it must be said that some developers behave incorrectly, but we have given you examples that buyers are not innocent angels.
Real estate appraiser, real estate agent and real estate consultant