Claims against Cyprus property - including mortgages

Mortgaged propertyWhen your lawyer carries out a Title search at the Land Registry (see Property Conveyancing) he/she may discover that the property you are thinking of buying has been mortgaged.

As well as a mortgage, your lawyer may find other claims, known as liens and liabilities burdening the property. The general name for these is "encumbrance" and they have the same effect as a mortgage inasmuch as they prevent you from owning the property until the claim has been removed by the person or company that lodged it.

When a property developer mortgages the land on which he is building, the bank that loaned the money lodges a claim against the land as security for the repayment of the debt. This gives the bank the right to sell the land (an anything on it) to recover its money. The encumbrance will be removed once the mortgage has been repaid.

Due to the archaic property laws and 'bent' lawyers and property developers in Cyprus, many people only discover that the property they have bought is mortgaged when the bank decides to recover its money. One unfortunate person who found himself in this position is Roger Snelling. Roger lives in Pissouri and you can hear and see how he was conned in Andrew Winter's damning documentary, a clip from which you can see on the right.

The lesson to be learnt from Roger Snelling's story is crystal clear. Under absolutely no circumstances should you buy any type of property in Cyprus that is mortgaged - the risks of losing everything are just too great.

Claims lodged against property in Cyprus

The most common types of property claims (encumbrances) are:

  1. A mortgage.

  2. A registration of a judgment made under the Civil Procedure Law (known as "memorandum" or memo).

  3. An application for registration of immovable property in the debtor’s name.

  4. A writ of sale of immovable property.

  5. A registration of a bond relating to a loan from the Central Co-operative Bank.

  6. A registration of a supplementary bond relating to a further loan from the Central Co-operative Bank.

  7. A deposit of a contract of sale of immovable property (see Specific Performance).

  8. A conditional attachment of property made by the Registrar of Cooperative Societies.

  9. A judgment or order of any Court directing the alteration or cancellation of a registration of immovable property.

  10. A publication of the apportionment of the cost of the construction of a street.

  11. A charge on immovable property in respect of a registration of immovable property fee.

  12. A judgment or order directing the sale of immovable property.

In addition to encumbrances, there may also be a "prohibition" lodged against the property. Prohibitions prevent the property owner from transferring or mortgaging any of his property and include:

  1. An interim order of any Court restraining a defendant from parting with or charging his immovable property.

  2. An order of any Court appointing a guardian of a prodigal.

  3. Adjudication of any person as "mental patient".

  4. An interim receiving order.

  5. A receiving order or an order for the winding up of a company.

If your lawyer uncovers a mortgage or any other claims lodged against the property you are thinking of buying, it is absolutely essential that they discuss them with you and advise you how best to protect your interests.