Cyprus Title Deeds
In Cyprus, Title Deeds, which are also know as "Certificates of Registration of Immovable Property", are formal documents that serve as evidence of property ownership. Each piece of immovable property has an associated Title Deed which contains information such as its registered owner, its size, its location and the Lands' Office reference.
As the legal ownership of immovable property is denoted by its Title Deeds, your Contract of Sale must provide for the transfer of ownership and registration of the property in your name and the contract deposited for 'Specific Performance' at the branch of the Land Registry - the District Lands' Office in which the property is located.
Why bother with Title Deeds?
Some expatriates boast about the money they’ve saved by not 'buying' their Deeds from the Land Registry. (You don't have to 'buy' them - they are yours as a right). Some claim that it is perfectly OK to buy property without securing ownership. So what are the advantages and disadvantages of not having your Title Deeds?
Advantages of not having Title Deeds
- On the plus side, you do not pay Property Transfer Fees to complete the purchase and have ownership of the property registered to your name.
Disadvantages of not having Title Deeds
- You do not own your property and are therefore unable to enjoy the full benefits of property ownership, including the right to sell or transfer it to anyone you wish without reference to its registered owner.
- Should you wish to sell, you need to cancel or transfer your contract of sale at the Land Registry enabling its registered owner to enter into a new sale agreement with your buyer. I know some buyers who have been charged more than € 34,000 by the registered owner, a disreputable property developer, for this 'privilege'. But a recent Court ruling may help to put an end to this despicable practice.
- Under certain circumstances the legal owner of the property can still raise a mortgage on the land on which your property is built without your permission, even though you may have paid him for it in full.
- If you have a property that was already mortgaged when you bought it, its legal owner may reschedule the loan, extend it, increase it, etc. without your consent or even your knowledge.
- Property developers prey on buyers without Title Deeds by extorting huge amounts of money from them claiming that it is to pay their Immovable Property Tax.
- You may have bought a property that has been built illegally; as a necessary precursor to issuing Title Deeds is a formal independent inspection to ensure the property has been built in accordance with the Planning and Building Permits issued for its construction. (If it transpires that the property was built illegally, the authorities could issue a 'Demolition Order' resulting in the property's destruction.)
- You are unable to raise money against your property and unable to access any of the capital you have tied up in it through equity release loans and other schemes.
- You are unable to make any changes to the property without the consent and the agreement of the Title Deed holder (most probably the developer from whom you bought it).
- As the Cyprus financial institutions refuse to grant mortgages on resale properties without Title Deeds, anyone wishing to buy your home must be a cash buyer.
Some of the Title Deed scams practiced by Cyprus property developers were the subject of a damning documentary by Andrew Winter shown on UK TV. If you missed the program, watch a 10 minute clip on the right.Many people live in blissful ignorance of the problems they face as a result of not having their Title Deeds. These only become apparent when they want to sell their property, when they try to use it as collateral to raise a loan, or when the developer starts demanding illegal amounts of Immovable Property Tax.
In 2011 the government enacted a New Specific Performance Law designed to increase the safeguards afforded to those buying property.
Land Registry figures released in October 2008 show that
29,949 non-Cypriot property buyers
are currently waiting for their Title
Deeds and that during the preceding three and a half years, just 4,400 property
were transferred to non-Cypriot property buyers.
So if their past performance is anything to go by, it will take the Land Registry nearly 24 YEARS to transfer Title Deeds to the 29,949 who are still waiting!