In Cyprus it is common to buy a new apartment before it has its own title deed, a separate registration at the Land Registry. For years buyers waited a very long time for their deeds, and some discovered that the land was mortgaged to the developer’s bank. The law has changed since then, but you still need to know how to protect yourself.
Why is there no separate title deed?
A separate title deed is issued only after the building is complete, has a completion certificate, and all deviations from the permit have been regularised. Until then the land is registered in the developer’s name and is often mortgaged to the bank that financed the construction.
The risk: the developer’s mortgage
If the developer does not repay the loan, the bank can enforce against the land, including the apartment you have already paid for. That is why an up-to-date search certificate from the Land Registry, showing mortgages and charges on the property, is checked before signing.
Three protections to insist on
- Depositing the contract at the Land Registry within six months of signing. The deposit creates a registration in your favour and allows you to ask the court to enforce the transfer of ownership.
- Paying into the loan account. Where there is a mortgage, the contract provides that all payments go into the loan account at the bank, and the bank signs an undertaking to release the apartment once 95% of the price has been paid.
- A payment confirmation from the bank. If the bank does not release the apartment, a signed receipt from the bank allows the Land Registry to transfer the apartment into your name.
A resale apartment without a title deed
Older apartments are sometimes also sold without a separate title deed. In that case you check that the seller’s own contract was deposited, that there are no charges against it, and that the transfer to you is registered as a proper assignment of rights.
Who carries out the checks?
Checks at the Cyprus Land Registry are carried out by a local lawyer. We work in coordination with him, make sure all these checks are done before any money is transferred, and explain the documents to you. The full steps before buying are set out in our guide to buying property in Cyprus.
Where do you go from here?
At Paz Israel & Co. Law Office we accompany real estate investors in Israel, Israelis buying property in Cyprus and foreign investors buying in Israel: checking the property and the seller, negotiating the contract, accompanying you through registration and coordinating with tax advisers. In Cypriot transactions we work in coordination with a local Cypriot advocate. For more information see our real estate investor services page, or contact us to schedule a meeting in Tel Aviv, Jerusalem or Modi’in.
This article provides general information, is correct as of the time of writing, and does not constitute legal or tax advice. Cypriot law is checked in every transaction with a local advocate.