Amendment to the Immovable Property (Transfer and Mortgage) Law of 1965 (9/1965), (“the Transfer and Mortgage Law”)
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Amendment of the Transfer and Mortgage Law
The recent amendment of the Transfer and Mortgage Law has resolved the unconstitunality of certain provisions of this law, vis-à-vis the rights of buyers who were “trapped” but who had purchased properties from developers, had paid the full purchase price but never received title deeds due ot the fact that the developer was indebted and hence it could not release the property and issue separate title deeds. This despite the fact that the buyer was actually occupying the property.
The Previous Legal Regime
Under the previous provisions of the Transfer and Mortgage Law the Land Registry was permitted to transfer title deeds directly to buyers who had paid the full purchase price, their contract of sale was lodged with the land registry and they were unable ot obtain a title deed due to the fact that the seller /developer was unable to release the property from existing mortagages, notwithstanding the objections of creditors.
These provisions enabled the land registry to bypass creditors by being able to act unilateraly and transfer the property to the buyer.
Unconstitionality of these Provisions
The legal provisions in place up to the 2025, were declared as unconstitutional by the Supreme Court because they infringed on Article 23 (the right to property) and Article 26 (freedom of contract) of the Constitution of the Republic of Cyprus.The Supreme Court held that transferring property without the consent of creditors violated the property rights of creditors.
The Introduction of the amendment of the Transfer and Mortgage Law by the enactment of law 110(I)/2025
Law 110(I)/2025 amends and replaces the provisions that were held as uncostitutional with a new, constitutionally valid mechanisms, ensuring the protection of the rights of buyers without overriding the legitimate rights of creditors.
Practical Implications of the Amendment
- Buyers can still obtain title deeds if they’ve paid in full but this is through a clearer, legally valid route.
- The property rights of banks/creditors are safeguarded in the process.
- The Land Registry is obliged to follow stricter procedures before transferring titles and it is preclused from proceeding with unilateral transfers.
Summary
Law 110(I)/2025 maintains protections for trapped buyers but does so in a way that aligns with constitutional rights ensuring a balance between the rights of the buyers and creditors alike.
Amendment of the Transfer and Mortgage Law
The recent amendment of the Transfer and Mortgage Law has resolved the unconstitunality of certain provisions of this law, vis-à-vis the rights of buyers who were “trapped” but who had purchased properties from developers, had paid the full purchase price but never received title deeds due ot the fact that the developer was indebted and hence it could not release the property and issue separate title deeds. This despite the fact that the buyer was actually occupying the property.
The Previous Legal Regime
Under the previous provisions of the Transfer and Mortgage Law the Land Registry was permitted to transfer title deeds directly to buyers who had paid the full purchase price, their contract of sale was lodged with the land registry and they were unable ot obtain a title deed due to the fact that the seller /developer was unable to release the property from existing mortagages, notwithstanding the objections of creditors.
These provisions enabled the land registry to bypass creditors by being able to act unilateraly and transfer the property to the buyer.
Unconstitionality of these Provisions
The legal provisions in place up to the 2025, were declared as unconstitutional by the Supreme Court because they infringed on Article 23 (the right to property) and Article 26 (freedom of contract) of the Constitution of the Republic of Cyprus.The Supreme Court held that transferring property without the consent of creditors violated the property rights of creditors.
The Introduction of the amendment of the Transfer and Mortgage Law by the enactment of law 110(I)/2025
Law 110(I)/2025 amends and replaces the provisions that were held as uncostitutional with a new, constitutionally valid mechanisms, ensuring the protection of the rights of buyers without overriding the legitimate rights of creditors.
Practical Implications of the Amendment
- Buyers can still obtain title deeds if they’ve paid in full but this is through a clearer, legally valid route.
- The property rights of banks/creditors are safeguarded in the process.
- The Land Registry is obliged to follow stricter procedures before transferring titles and it is preclused from proceeding with unilateral transfers.
Summary
Law 110(I)/2025 maintains protections for trapped buyers but does so in a way that aligns with constitutional rights ensuring a balance between the rights of the buyers and creditors alike.