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Parliament: contracts will trump mortgages under new property law.

Author:

Jacqueline Agathocleous

PARLIAMENT yesterday concluded discussions on the remainder of the "town-planning amnesty" legislation, completing the legal framework that aims to put an end to the title-deeds fiasco.

MPs unanimously approved the Immovable Property Sales (Specific Performance) Law, thus giving land contracts power over any mortgages owed to the banks by the property's seller.

The law was an integral part of the government's so-called amnesty package. Tens of thousands of real estate buyers across the island - local and foreign - remain without title deeds to their properties after the sellers failed to settle their bank debts.

The fact that rights to the property were automatically transferred to the bank left many exposed, even if they had settled their entire debt on the property.

The second bill - in which the government pushed for all land contracts to be in writing and to be registered at the Land Registry Office in order to be considered valid - was rejected by majority vote, with opposition DISY, EDEK and EVROKO, as well as coalition partner DIKO voting against.

The plenum also unanimously approved a number of last-minute amendments submitted by the parties.

Presenting the two bills before the vote, the Chairman of the House Legal Affairs Committee, DISY's Ionas Nicolaou, said the laws corresponded to society's demand for better protection of buyers' rights.

"The new law will allow the buyer to have title deeds, independent of whether the seller owes money on that property," said Nicolaou. "It is important as it will help reactivate the property market in Cyprus."

The newly approved legislation, along with the amended town planning laws that were passed in March, aims at legalising real estate property that lacks a title deed due to town-planning or building irregularities. With around 130,000 title deeds currently pending - mainly due to developers failing to pay up mortgages on properties buyers have already paid for - this news is bound to be welcomed by many.

Now buyers will have the ability to pay up the amount they owe on their property straight to the bank, while their land contract will have precedence over any mortgage owed by a third person on the property.

Meanwhile, the House also approved a law proposal by DISY that enables owners of a co-owned plot to develop their share of it as they wish, without having to present the signatures of the remainder of the co-owners.

Until now, if a plot was co-owned, for someone to build in his part of the land, he would have to seek the approval of the other owners, otherwise the Town Planning Department would not grant authorisation.

But with the new law, people will be able to develop without needing the co-owners' signatures.

It was not clear yesterday, however, what would happen in cases where persons have already paid developers in full for a property but have not received the title deed because of outstanding debts by the developer to the banks for the plot of land.

Copyright Cyprus Mail 2011

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Publication:Cyprus Mail (Cyprus)
Date:Apr 15, 2011
Words:505
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