The Sale of Real Estate (Special Execution) Laws of 2011 to 2020 have been amended to provide those purchasing real estate in the Republic of Cyprus with greater legal protection.
The amendments mandate, among other things, that a Search Certificate, dated no more than five working days before the contract's signature, be included by the property's vendor (seller) in the sale agreement.
In addition, the Land Registry will only accept the deposit of the contract of sale for a property if it is accompanied by written declarations from the mortgagor and vendor. The buyer must have been informed in writing if the property is encumbered by a mortgage or an earlier contract.
This legal modification will make it possible to guarantee that buyers are informed truthfully and promptly of any contracts and mortgages attached to the property.
Additionally, the modification will protect buyers of real estate from possible fraud, especially in situations where developers have mortgaged a portion of the land they are developing to facilitate the acquisition of home loans for other buyers on their developments.
The specifics of the mortgage registered on the vendor's property are described in the written declaration from the mortgagor. Contracts for the sale of the property or any houses, apartments, or units on the property that are made between the vendor and buyers are covered by it.
If the vendor obtained a mortgage for his personal use (constructing the properties), the mortgagor attests that the vendor will discharge the property from the mortgage upon receiving 95% of the contract amount in the vendor's bank account. On the other hand, the declared amount is zero if the seller registers the mortgage to assist a different buyer in purchasing the unit or units.
The Land Registry transfers the property to the buyer's name after the mortgagor has paid off the mortgage, free and clear of any encumbrances that might impact the property or its new owner.
The legal reforms improve the legal stability and openness of real estate transactions by addressing the issues that led to buyers of real estate being "trapped."
It guarantees that all encumbrances are removed from properties before they are transferred to buyers and that the buyer's purchase price will be applied toward the repayment of any outstanding mortgages.