Legal Safeguards for Buying Property
When non–Cypriot purchasers decide to buy immovable property in Cyprus, they have the same rights as Cypriot citizens. The contract of sale signed between the Vendor and the Purchaser binds both parties to perform according to their respective obligations. The seller or one of the sellers who sign the agreement must be the registered owner of the property or the part of the property including the segmentation which is to be sold. Upon the signing of the contract, the purchaser is liable to pay stamp duty (see below) and then, it is advisable for the contract of sale to be registered within 2 months of the contract date, at the District Land and Surveys Department in the region where the property is situated. The deposit fees are payable by the Purchaser, the amount being €50.00.
This is because it provides additional safeguards for the purchasers and creates the so called “right to specific performance” in favour of the purchasers. By registering the contract of sale with the District Land and Surveys Department, the purchaser is considered as the beneficial owner of the property until the title deed is issued.
When the title deeds are issued, they are registered in the name of the purchaser and filed in the Registry archives, which are confidential and are not published or made public under any circumstances.
The Sale of Land (Specific Performance Law) Law 81(I)/2011 provides safeguards for sellers and buyers of property – the law requires the sale and purchase agreement to be submitted to the Cyprus Land Registry. The deposit of the agreement to the Land Registry is considered as an encumbrance on the specific property. If the property is part of a jointly owned property, for example, an apartment, flat or a percentage of land, then an agreement must be entered into between the joint owners which will allow the sale of the property. the joint owners of the communal areas of the property will sign a distribution statement which will be deposited to the District Land Registry, this distribution will be taken into consideration upon the issuance of the title deed. In the event of an issue or non performance arising, after the submission of the agreement an application can be brought before a competent court in Cyprus, the court could issue an order requiring the parties to the agreement to perform their respective obligations under the agreement. The application to the competent court for the issues of an order for Specific Performance may take several forms, for instance it may be an order requiring the completion of the sale and purchase agreement and/or any clause in the agreement or it may be an order to remove a mortgage attached to the property, subject to the court being satisfied that the debt for which the mortgage is made has been satisfied. For the avoidance of doubt, immovable property or property includes land, buildings, fixtures, cartels affixed to land, rights and easements attaching to land. The law also provides that the agreement must be made in writing and incorporate the contracting parties details, a description of the property and it must be signed by each party to the agreement.
Contrary to the risks inherent in the purchase of the property in some countries, Cyprus has never been involved in the nationalisation of any sector of the economy or in the expropriation of property owned by non–Cypriots in line with the Cyprus government’s efforts to create a favourable climate for such investments.