Cyprus Property Law amendments

In late 2023, Cyprus passed Law N. 132(I)/2023, amending the Sale of Property Law (Specific Performance) of 2011 to protect real estate buyers. It ensures that the property transfer will proceed once the buyer fulfils his contractual obligations.

Contracts of sale must include a land registry search

Under the new section 4(a)(1A), the seller must include, as an integral part of the contract, a Land Registry search certificate not older than five working days from the signing of the contract.

It may also be up to five days later than the singing date. This document must be signed by the parties and be attached to the contract. It's an official document from the Cyprus Department of Lands and Surveys (DLS) that provides information about property burdens, such as mortgages.

The amending law came into force on 12 December 2023 and applies to contracts for selling property signed after that date.

New procedure for submitting contracts at the Land Registry

If the property is subject to a mortgage, the lender and the seller need to provide specific documents to enable the registration of the contract.

The document needed is called type A. It is a declaration from the seller and the lender confirming that:

1. Once the buyer or seller has repaid 95% of the mortgage amount to a specific bank account mentioned in the letter, the lender must issue a type B receipt to the buyer confirming that they have released the property from the mortgage.
2. If they fail to remove the mortgage despite the payment, the seller and lender confirm that once the buyer presents the type B receipt to the DLS, the DLS will transfer the title deed to the buyer.

Although not recommended, an alternative is to proceed without type A but with type C. Type C is a statement from the buyer saying they wish the contract of sale to be submitted without a type A statement. In this case, the buyer will not have the protection that type A gives.

Contracts signed before December 12, 2023, can still benefit from the specific performance order under the old law (pay any pending mortgage and apply for specific performance against the seller).

Nevertheless, on June 20, 2024, the Court of Appeal (upon application from a bank) held that the DLS Director's power to delete a mortgage was unconstitutional. Applications from buyers without title deeds are now frozen. The government is consulting with banks and other stakeholders to proceed with new legislation.

The seller is still obliged to include a five-day search certificate in the contract of sale. The buyer should still deposit the contract with the DLS to apply for specific performance under the old procedure.

Administrative fines

The Director of the Land Registry office may impose an administrative fine of:

• EUR 10,000 on sellers who do not comply with the search certificate requirement.
• EUR 100,000 on sellers who do not release the property from the mortgage.

The announcement is on the DLS site.

If you need more information about this amendment, please contact our Cyprus property lawyers team.