A recent legal clarification in Cyprus has changed long-standing practice regarding property transactions and how encumbrances are handled by the Land Registry.

No obligation to Notify Buyers at Filing Stage:

A court-backed interpretation, confirms that the Land Registry Department is not required to inform buyers of property encumbrances (mortgages, memos, etc.) when a sale contract is filed.

This practice has been discontinued as it was considered to cause delays and would occur too late in the transaction process.

Buyers must Check Property Status Earlier:

Buyers are now expected to obtain full property information before signing a legally binding Sale and Purchase Agreement. Legal status details remain available through the formal Land Registry search procedure.

Updated Legal Safeguards for Buyers:

Despite reduced disclosure at filing stage, protections remain in place:

As from 12 December 2023, Sellers are required to provide a recent Land Registry Search Report (issued within five days of signing), which forms part of the Sale and Purchase Agreement. Non-compliance may result in administrative fines for sellers, calculated based on the sale price. Where a mortgage exists, the law also allows purchase funds to be directed to the lender to clear the debt, enabling transfer of ownership despite encumbrances.

Key Considerations when Buying Real Estate in Cyprus:

• Encumbrances & Restrictions: Properties may be subject to mortgages, court orders, rights of way, or sale agreements which can affect ownership rights, transferability, or use of the property.
• Due Diligence: A thorough legal and technical investigation is essential before purchase to identify any existing burdens or risks attached to the property.
• Planning Zones & Use: The planning zone (e.g. residential, commercial, industrial, agricultural) determines how the property can be used. Buyers should ensure permitted use aligns with their intended purpose.
• Title Deeds: It is equally important to know that many properties offered for sale do not in fact have a separate title deed. Apartments under construction, do not usually have a title deed and purchasers will be obtaining rights under the Sale and Purchase Agreement until a separate title deed is issued in their name.
• Delayed Title Issuance: The issuance of a separate title deed can take several years after completion of construction, during which time legal protection relies on contractual rights.
• Practical Impact: All of the above factors can significantly impact future enjoyment, resale value, and legal ownership of the property.

Should you wish to find out more, contact our team!

📞 Call us: +357 22 622 262
📧 Email us: info@paraschou.com.cy

🌐 Visit: www.paraschou.com.cy

This article is provided for general information purposes only and does not constitute legal, tax, or other professional advice. It should not be relied upon as a substitute for specific advice on any individual matter or transaction. Professional advice should be obtained before acting or refraining from acting on the basis of any information contained herein.