Deputy Kostis Eftatiou proposed amendments to the existing real estate law aimed at increasing the transparency of transactions and protecting buyers from hidden legal and financial obligations. These changes will help prevent situations in which buyers are “trapped”.
Under a proposed amendment to the Sale of Real Estate Law, the Cyprus Land Department will be legally obliged to disclose any encumbrances such as mortgages, loans or legal claims prior to completion of a transaction. The Land Department will provide a written statement to all parties to the transaction confirming the existence or absence of such encumbrances on the property.
Eftatiou’s proposal comes in response to a February Court of Appeal ruling that the Lands Department is no longer required to inform buyers of previously concluded sales contracts. The ruling has raised serious concerns as thousands of property buyers have been “trapped” in complex legal limbo over encumbered properties.
In recent years, thousands of buyers in Cyprus have fallen victim to poor legal advice and mistakes in choosing a lawyer. Often, the lawyers representing the buyers did not carry out due diligence, or the buyers used the same lawyer as the seller, or did not hire a lawyer at all to save money.
In 2015, the government passed the so-called “Trapped Buyers Act” to ensure that properties were transferred to buyers who had fulfilled their contractual obligations to the seller but had not received a title deed. However, this mechanism was declared unconstitutional in June 2024. By that time, some 11,462 properties had received their title deeds, but another 9,497 cases remained pending in Land Department offices.
In response to the court’s decision, the Ministry of the Interior is developing new rules that should resolve about 50% of these unresolved cases. The updated system will allow for the forced transfer of Title Deeds to buyers if there were no encumbrances on the property at the time the deed of sale was filed.
However, an important question remains: how does the government intend to help the remaining 50% of buyers who have paid the full amount in good faith but still do not have legal title to their property?
Eftatiou’s proposal to amend the law is an important step toward restoring confidence in the real estate market. If passed, the law will help prevent buyers from falling victim to hidden encumbrances such as mortgages, loans, or lawsuits.
