“Trapped” owners’ law on the right track
The unanimous adoption by parliament of the property buyers’ law was a welcomed surprise.
The relevant legislation was necessary to regulate and solve a problem haunting Cypriot buyers for decades now.
The interior Minister is to be congratulated for pushing hard for the adoption of the legislation. It also defies logic why this simple solution had not been adopted 10 or 15 years ago. However, the ultimate solution will come about, once titles are automatically issued, at the same time the developer delivers the key to the buyer.
In order for the public not to be in the dark allow me to present the basic provisions of the new law.
The term ‘trapped’ buyer refers to those who honoured the terms of sale or are willing to do so:
a) The legislation applies to buyers whose properties do not have a title deed;
b) It also relates to properties for which a title deed has been issued to the name of the developer but cannot be transferred to the buyer for specific reasons..
In the first case, when a deed has not been issued, when the buyer applies to the Land Registry Department, all foreclosure procedures are suspended. The application for title deed transfer remains pending until the deed is issued. If title deeds have been issued the following apply: - The transfer application from the developer to the buyer can be initiated by the seller, the buyer, the mortgage lender or other lenders related to the property;
- This is another case when foreclosure proceedings are suspended until the application is examined;
- For the application to be considered, either the whole amount of the transaction must have been honoured or the amount due to be deposited toa special Lands and Surveys Dept. bank account.
If all above criteria are met, the Lands Dept. will inform the buyer, the developer, the mortgage lender, or any other party who has placed a ‘memo’ on the property asking them to come forward with objections, if any, within 45 days.
If there are no objections the Department will initiate the transfer.
Another positive development is the fact that transfer fees have been reduced by 50%, effective until the end of 2016. The buyer can choose to pay these fees at a 10% discount, if paid within 60 days, or in 12 equal monthly installments (interest free), without a discount.
People who fail to take either penalty.
This new legislation highlights the fact that when all parties involved show a spirit of co-operation we can come up with good solutions to long-standing problems that will be beneficial for everybody. Having said this, it was our obligation to fix this problem under the memorandum signed with our lenders (the Troika).