On September 4, 2015, the Transfer and Mortgaging of Real Estate (Amendment) Law, Ν. 139(1)/2015 came into force (the “Law”).

The Law is designed to protect those buyers who paid for the property they bought but did not receive a title deed due to the financial problems of the developers of the real estate (the “Trapped Buyers”), by releasing the property from the developer’s obligations to their lenders. Specifically, the Law restricts the lenders to apply offset of properties mortgaged by the developers which are currently under the possession of Trapped Buyers.

The Law now, gives the discretion to the Director of Lands and Surveys Department to exempt, eliminate, transfer and cancel mortgages and or other encumbrances applicable on the Property, depending on the case and under specific conditions.

The Law is applicable on contracts (sale agreements) that have been submitted at the Lands Registry up until 31st December 2014. The transfer of the property to the Trapped Buyer may be conducted either proprio motu or on application. An application for transfer (the “Application”) may be submitted by the Trapped Buyer, the seller, the mortgagee or the lender and has to be accompanied by the necessary supporting evidence.

For the examination of the Application, it does not matter whether a title of deed has been issued or not. The Trapped Buyer however, up to the date of submission of the Application, should pay the whole amount of the sale agreement or a part of the sale amount. In case of paying only a part of the whole amount the Trapped Buyer must agree to pay the balance and payment must go through according to the contract.

If all criteria are fulfilled the Director of Lands and Surveys notifies all interested parties, i.e. the buyer, the seller, the mortgagee and the lender that 45 days after the service of the notification the transfer of the Property to the Trapped Buyer will take place.

If none of the involved parties raises an objection to the Application the Director will exempt, eliminate and cancel mortgages and or other encumbrances and will transfer the Property to the Trapped Buyer. The Director may transfer the mortgages and or other encumbrances to other immovable property owned by the sellers. In case that the seller does not own any other immovable property the transfer of the mortgages and or other encumbrances will go to legal entities or physical persons who guaranteed the obligations of the seller regarding the Property.

A Property cannot be transferred to the Trapped Buyer’s name if the latter owes immovable property tax to the Government or the municipality or owes sewerage fees.