Trapped Buyers – The 2025 Legal Amendment in Cyprus
In 2025, the Cyprus Parliament introduced a significant amendment to address the long-standing issue of "trapped buyers"—individuals unable to secure legal ownership of their purchased property due to existing encumbrances registered prior to their sales agreements being lodged with the Land Registry. This article explains and comments on the key provisions of the amendment and the discussions that took place during its legislative process.
The Twofold Problem
The Legal Affairs Committee identified two primary issues:
- The existence of prior encumbrances registered with the Land Registry before the sales agreement.
- Urban planning irregularities affecting the properties—without the buyer's fault.
The amendment seeks to address the first issue. Urban planning issues caused by the developer remain under further review, although existing Urban Amnesty Schemes offer partial relief.
Key Requirements for the Amendment to Apply
For the provisions to become effective:
- The sales agreement must have been lodged with the Land Registry by 31/12/2024, or a relevant court application must have been filed by that date to permit its registration.
- The property in question must be subject to that agreement.
- If prior encumbrances exist, written consent must be secured from the creditors to transfer the property.
A vital clause allows for a court order to replace written consent if the creditor unjustifiably or abusively refuses it and the purchase price has been fully paid.
Court Interpretation & Bank Objections
The terms "abusive" and "unjustified" refusal will require judicial interpretation by Cypriot courts. Notably, several financial institution representatives objected to the provision allowing court orders in lieu of creditor consent.
It also remains unclear whether the recipient of the court order is the creditor (to force consent) or the Director of the Land Registry (to strike off the encumbrance).
Enhanced Powers of the Land Registry Director
Another important update is the ex officio power granted to the Director of the Land Registry, who may now transfer properties even while suspension orders, foreclosures, or restructurings are pending. This applies once a buyer submits an application and remains in effect until the process is complete.
Crucially, this power extends to cases where the purchase price hasn't yet been fully paid. In these scenarios, the buyer must declare in writing their intention to deposit the remaining balance into a temporary holding account within 60 days.
Further Innovation: Title Not Yet Issued
Applications may now be submitted for properties without a title deed, provided that the title is expected to be issued within 2 years and 8 months from the enactment of the amendment.
Applicants must submit supporting documents, such as building permits or completion certificates, within 8 months of receiving a notice from the Director.
Strict Deadlines
To accelerate the process, applicants have 60 days from the Director's request to submit any required documentation. Failing to do so will result in application rejection.
Final Thoughts
This legislative amendment clearly demonstrates the government's intent to support buyers who, despite fulfilling their payment obligations, could not secure title deeds. However, the amendment's effectiveness will largely depend on how financial institutions respond and how courts interpret ambiguous provisions.
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