Amendment to the Sale of Immovable Property (Specific Performance) Law of 2011
Purchasers of immovable property may apply to the court for an order of specific performance compelling the seller to transfer the title of the property in their name, provided that they have deposited the contract of sale with the Cyprus Land Registry, in accordance with the provisions of the Sale of Immovable Property (Specific Performance) Law of 2011 (L. 81(I)/2011) (the “Law”). The Law was recently amended by the amending law 132(I)/2023 which came into effect on 12 December 2023 (the “Amending Law”), in an effort to provide additional protection to purchasers of immovable property in cases where, even if they have fulfilled their contractual obligations vis-à-vis the seller, the seller, because of the existence of prior encumbrances over the property, is not in a position to transfer the property free of any encumbrances in the name of the purchaser.
More specifically, we set out below a brief summary of the changes introduced by the Amending Law:
• A formality has been introduced with respect to contracts of sale which requires the seller to include as an integral part of the contract of sale, a certificate of search from the relevant Land Registry with respect to the property being sold. Such certificate should be dated not more than five (5) business days prior to the date of signing of the contract of sale.
• An additional procedural step has been introduced with respect to contracts of sale which relate to immovable property over which there is a registered mortgage or a contract of sale. In such cases, the relevant Land Registry will accept the registration of the new contract of sale only if it is accompanied by a written statutory declaration by each mortgage lender and seller (the “Mortgage Lender Declaration”), confirming that, in case of payment of 95% of the purchase price against the mortgaged debt, the mortgage will be released. There is also the option of the purchaser filing a declaration, in a form set out in the Law, stating that the Land Registry can proceed with accepting the registration of the new contract of sale, without requesting the Mortgage Lender Declaration.
• Any payments that are made by the purchaser to the seller under the terms of the contract of sale shall need to be made to the specific bank account mentioned in the Mortgage Lender Declaration. Upon receipt by the mortgage lender of the full amount mentioned in the Mortgage Lender Declaration, the mortgage lender should issue a declaration in the form set out in the Law and proceed to release the mortgage. If the mortgage lender fails to do so, the Director of the Land Registry will proceed with the release of the mortgage without the involvement of the mortgage lender.