Cyprus-Forum.com

[cardshark]

Hi Mr. Howarth

I have been reading this forum for several months but had nothing to post of interest so I have not registered until now. Having seen from your web site that you are a cyprus property expert I was alarmed to read your statement below because my land has not been transferred within 6 months after the date of the contract.

A further point to note on ‘Specific Performance’ is that the encumbrance it creates expires six months after the date of the contract or six months from the last date of transfer specified therein. So if you don’t act quickly and have the property registered in your name within this time window, the owner can sell it to someone else, use it as collateral against a loan, etc.

This worried me so much that I contacted my lawyer over the weekend. He says;

We confirm that your contract has been registered with the lands office and it will protect your interest until the issue of the separate title deed and the transfer of it in your name.

All the other points mentioned in your e.mail,"as advise are theoretical
advise". In reality the system does not work the way you have been "advised".

The specific performance (registration of your contract with the Lands
Office) is enforceable and can be executed within 6 months that it is
practically and legally possible. In cases like yours the time of the 6
months starts from the moment the title deeds are made available through the subdivision,something for which you will be notified immediately by the vendors.

Mr. Howarth, who is right? You or my Cyprus Lawyer?

[Svetlana]

hi cardshark

Mr Howarth is right inasmuch as he did not say the land had to be transferred to you within 6 months, but rather, that your purchase had to be registered at Land Registry within 6 months, and a copy of the Purchase Contract deposited.

The solcitor is right inasmuch that 95% or more new properties are bought without Title Deeds and generally there are no problems in owning a property without them.

Lana

[cardshark]

Hi Lana

Thank you for your advice. So what I should have understood from Mr. Howarth's posting was that my contract for the purchase had to be registered for specific performance in my name at the Land Registry within 6 months of the date of the contract.

I must admit that I thought that he had said that the land must be transferred to my name in the form of the Title Deeds within six months of the date of the contract otherwise the seller could can sell it to someone else, use it as collateral against a loan, etc.

It is amazing how english, however intended to be plain and crystal clear, can be misunderstood. I am sure that many readers of this board will be in the same situation as me and now need not worry.

Thanks again Lana for explaining what Mr. Howarth meant and was well intentioned to advise.

[Svetlana]

Hi cardshark

One of the problems for British people doing business here is the difference between the English they use and the (more correct) English taught to Cypriots/Russians etc.

Only if a foreigner has spent time in England will they fully understand 'urban' English. For an example, if one of my British friends said something like; 'it is going to rain , I must take my brolly' it would be incomprehensible even to a well educated 'foreigner', unles they were familiar with slang.

Even Cypriot Greek is different from Greek Greek!

Lana

[nhowarth]

Hi Cardshark,

I apologise if my earlier posting mislead you, that wasn't my intention. I can only talk from a British perspective on these matters. Although Cyprus law is based on British law, there are a number of differences to the procedures involved in buying and selling property (as many Brits have, unfortunately, found to their cost.

The precise wording regarding 'Specific Performance' provided by the Land Registry is as follows:

"The deposit of the contract of sale creates an encumbrance, which expires within six months from the date of the contract of sale or six months from the last date of transfer specified therein. Where only part of the property is sold (a building site or field under division or flat, office or shop under construction) the encumbrance is attached to the whole of the immovable property until the issue of a separate title for the part so sold. This means that the encumbrance created shall thereafter be limited to the part of the property so sold. Until the issue of a separate title, the vendor may transfer his property subject to the contract of sale, which is deemed to be a mortgage on the property so transferred, in the name of the new owner (purchaser). The contract of sale is binding upon the purchaser. The vendor may also choose to mortgage the property. In this case, the contract of sale is deemed to be a prior mortgage (subsisting before the new mortgage).

Attention: As any action instituted for purposes of specific performance of the contract of sale must be filed within a fixed period of time any interested person is advised to consult his/her attorney."

As I understand the situation:

The vendors are under no legal obligation to advise you when the Title Deeds for your property become available.

The clock starts counting down on the six months when the Title Deeds become available (this will/should be referred to in your contract of sale, but a firm date for their availability may not be given).

Should you not complete on your purchase and have the property registered in your name within that 6 month window, your ability to seek 'Specific Performance' will lapse.

Just out of interest - I expect there are some rather harsh penalty clauses in your Contract of Sale should you fail to make the stage payments at the stated milestones.

Is the contract balanced inasmuch as there are similarly harsh penalty clauses should the developer fail to deliver posession of the property by the stated date or if he fails to make the Title Deeds available by the specified date?

Returning to the point about the actual deposit of the contract for 'Specific Performance'. Here is the actual wording from the Land Registry:

"deposit a copy of the contract of sale at the Lands Office of the District where the property is situated within a period of two months from the date of the contract of sale. The original of the contract of sale must be produced for purposes of confirmation and shall then be returned to the applicant."

Lana has raised another very interesting point on 'owning a property without them' (referring to Title Deeds).

You are not considered to be the owner of a property until its Title Deed has been registered in your name by the Land Registry (this happens when you pay the Property Transfer Fees). Until that time, you have possession of the property. This has a number of implications:

As you do not own the property, you cannot sell it. Should you wish to sell, you have to come to an arrangement with its owner (most likely the developer) to cancel your contract of sale. This enables the encumbrance caused by the deposit of your contract of sale to be removed, which then enables the owner to enter into a new contract of sale with your buyer. The developer will then give you the proceeds of the sale (leass any charges he chooses to deduct in the way of a 'contract cancellation fee'). It is not unknown for some developers to charge 2% of the contract sum or more to cancel the contract. Your solicitor should have included a clause in your contract to minimise any such contract cancellation fee.

Although you do not own the property, you are liable for an annual 'Immovable Property Tax'. This is calculated on the 1980 value of the property - properties whose assessed 1980 values are less than CYP 100,000 are exempt. So unless you've bought a property valued at millions at todays prices, the assessed 1980 value of your property will be lower than CYP 100,000. However, due to the delay in issuing Title Deeds, some developers are the owners of property whose value runs into many millions of pounds. As a result, they receive large Immovable Property Tax bills. Occasionally, a developer will attempt to recover disproportionate elements of his tax bill from those property buyers whom have yet complete on their purchase. It is also worth noting that:


As property developers cannot estimate the Immovable Property Tax liability for a property until its Title Deed is issued, any sum they try to claim from the property buyer will be incorrect.

Some property developers attempt to charge buyers on the purchase price of the property rather than its 1980 valuation.
(Your solicitor should have ensured that your contract of sale protected you from this eventuality.

As I said earlier in this message, I can only comment on these matters from a British perspective and how the procedures used for buying property in Cyprus differ from those in the UK. From a British perspective, the Cypriot system is different and sometimes leads British buyers into making costly (and sometimes rather foolish) mistakes.

Regards,

[cardshark]

Dear Mr Howarth and Lana (respect.......as Moderator!!)

It has taken me several hours, yesterday and again today, to read through Mr. Howarth's posting and it has been very difficult to put what he has said into context. But I am hopeful that your expertise in cyprus property will help me understand because I am finding that my lawyer's english is difficult to follow.....but my greek is a million times worse.....so respect to him !!

I do not have, at this stage, a contract for the building of a property on the land.

So there are no;

rather harsh penalty clauses in your Contract of Sale should you fail to make the stage payments at the stated milestones. Is the contract balanced inasmuch as there are similarly harsh penalty clauses should the developer fail to deliver posession of the property by the stated date or if he fails to make the Title Deeds available by the specified date?

If I just attach myself to the basic statement that you made that might help me because the issue that I am trying to understand is just concerning the land.

A further point to note on ‘Specific Performance’ is that the encumbrance it creates expires six months after the date of the contract or six months from the last date of transfer specified therein. So if you don’t act quickly and have the property registered in your name within this time window, the owner can sell it to someone else, use it as collateral against a loan, etc.

You also said;

The vendors are under no legal obligation to advise you when the Title Deeds for your property become available.

The clock starts counting down on the six months when the Title Deeds become available (this will/should be referred to in your contract of sale, but a firm date for their availability may not be given).

Should you not complete on your purchase and have the property registered in your name within that 6 month window, your ability to seek 'Specific Performance' will lapse.

The vendor of the land has not notified me at any time that the Title Deeds are available.

I do not know if the clock has started counting down on the six months window.

However prior requests in writing have been made to the vendor over several months asking for the Title Deeds to be issued to which there had been no reply. So the Title Deeds were not available and the six months countdown cannot have commenced already?

But since then the vendor has advised verbally that the Title Deeds will not be made available. In fact the position is that the vendor is refusing to make available the Title Deeds. (I think that he now regrets selling the land and wants it back for the price I paid over 3 years ago; he even spoke of breaching the land sale contract)

As I read the situation the vendor cannot claim that the six month count down has ever started because he has now refused to make available the Deeds. (They were never available and the six months count down is irrelevant)

So even though more than six months has elapsed following the date of the contact an action of specific performance still exists by virtue of the original registration of the contract for specific performance at the land registry.

To preserve this all I think I have to do is write to the vendor every six months and ask for the Title Deeds?

What happens when you take an action for Specific Performance? Is the Court in Public and what would it do to the vendor's reputation?

[nhowarth]

Hi Cardshark,

Reading through your earlier message you say “my land”, so I assume that you have bought a plot of land and not a house.

Let me see if I can explain the situation:

Firstly, if there IS NOT A Title Deed for the land you have bought.

Think of the land you have bought as being a slice of a cake. The cake will have a Title Deed, but the slice you have bought will not.

To get a Title Deed for your slice of the cake, the vendor has to apply to the Land Registry to have the cake divided into a number of slices.

The Land Registry will then issue a Title Deed for the slice of the cake you have bought and a Title Deed for the remainder of the cake. (The Land Registry will then withdraw the original Title Deed for the whole of the cake),

Once the Land Registry has issued a Title Deed for your slice of the cake, you can apply to have it registered in your name.

(There are some circumstances where the Land Registry will not be able to divide the cake).

Secondly, if there IS A Title Deed for the land you have bought.

There may be something preventing the Title Deed being made available to you. For example – the vendor may have used the land as collateral for a loan. In this case, the Title Deed cannot be made available to you until the vendor has repaid the loan.

To answer your other questions:

The vendor of the land has not notified me at any time that the Title Deeds are available.

He does not have to notify you.

I do not know if the clock has started counting down on the six months window.

The clock will not start counting down if the Title Deeds are available.

However prior requests in writing have been made to the vendor over several months asking for the Title Deeds to be issued to which there had been no reply. So the Title Deeds were not available and the six months countdown cannot have commenced already?

If the Title Deeds are not available, the six months countdown will not have commenced already.

But since then the vendor has advised verbally that the Title Deeds will not be made available. In fact the position is that the vendor is refusing to make available the Title Deeds.

If the vendor refuses to make the Title Deeds available, you can pursue your claim for ‘Specific Performance’ through your solicitor.

(I think that he now regrets selling the land and wants it back for the price I paid over 3 years ago; he even spoke of breaching the land sale contract).

There is nothing the vendor can legally do to get the land back. If he breaches the contract, you can sue for damages in the Courts.

As I read the situation the vendor cannot claim that the six month count down has ever started because he has now refused to make available the Deeds. (They were never available and the six months count down is irrelevant).

The vendor cannot claim that the countdown has started – this is for the Land Registry to decide. If the Title Deeds have not been made available, the six month countdown is irrelevant.

So even though more than six months has elapsed following the date of the contact an action of specific performance still exists by virtue of the original registration of the contract for specific performance at the land registry.

Yes, that is correct. The six month countdown starts when the Title Deeds become available.

To preserve this all I think I have to do is write to the vendor every six months and ask for the Title Deeds?

I think it would be better if your solicitor did this on your behalf.

What happens when you take an action for Specific Performance? Is the Court in Public and what would it do to the vendor's reputation?

I don’t know the answer to this. I think that if the case is straightforward, neither you nor the buyer has to go to the Court. The court will read the evidence, make its decision and notify you.

As for the owner’s reputation, all I can say is that some people find that money in the bank is more valuable than their reputation.

(Something similar happened to me when I bought my land. The owner of the field next to mine claimed that 5 metres of my land belonged to him. Neither of us had to go to court and we were notified of the courts decision).

Regards,

[cardshark]

Dear Mr Howarth

Thank you for your posting..........respect !!!

I assume that you have bought a plot of land and not a house.

Yes, Land. The land was purchased by the vendor from an original owner who owned a larger piece of land which was subdivided into plots. The vendor tells me that he now has an individual Title Deed for the plot of land that I purchased.

So does that mean that the Title Deeds were "available"?

If YES what would that mean in the situation where I have been asking for the Title Deeds from the vendor but he did not reply? Would that have made them "unavailable"?

As I mentioned before he has now responded verbally to my request for the Title Deeds by verbally refusing to transfer these into my name.

There may be something preventing the Title Deed being made available to you. For example – the vendor may have used the land as collateral for a loan. In this case, the Title Deed cannot be made available to you until the vendor has repaid the loan.

The fact that I was getting no reply to my requests for the Title Deeds was of concern so I went to the land registry and it a search to ascertain that my contract was registered within the time period and that there were no prior or subsequent encumbrances. There were no problems.

Nevertheless I still get an uneasy feeling with someone refusing and talking about breach.

And having read your original post about the contract registration expiring in 6 months it rang alarm bells.

Can you see anything wrong in my postion Mr. Howarth?

Respect ,,,,,,,,,,,,,,Mr Howarth !!! Please post again.

[nhowarth]

Hi Cardshark – (please call me Nigel - everyone else does)

So does that mean that the Title Deeds were "available"?

Providing the vendor is telling the truth (i.e. he has a Title Deed for the plot you bought) AND there are no other claims against the land that existed BEFORE your contract of sale was deposited – then YES the Title Deeds are available.

If YES what would that mean in the situation where I have been asking for the Title Deeds from the vendor but he did not reply? Would that have made them "unavailable"?

NO. The only things that make the Title Deeds unavailable are:

1. They have not been issued by the Land Registry.
2. There is a claim against them that existed before your contract of sale was deposited at the Land Registry. (For example, if the vendor has taken out a loan and used the land as collateral, the Title Deed will not become ‘available’ until the vendor has paid off the loan).

As I mentioned before he has now responded verbally to my request for the Title Deeds by verbally refusing to transfer these into my name.

It is not the job of the vendor to transfer the Title Deeds to your name, this has to be done by you or your lawyer.

The vendor CANNOT refuse. If he tries to refuse, your lawyer will be able to get a judgement from the Court using ‘Specific Performance’ who will then direct the Land Registry to register the Title Deed in your name.

Can you see anything wrong in my position?

NO, I cannot. BUT I would advise you to have the Title Deeds transferred to your name as soon as possible. IF you do not have the Title Deeds transferred to your name within six months of them being ‘available’, then you may not be able to seek ‘Specific Performance’ if the vendor decides to break the contract – you will have to sue him in the Courts.

Providing your Contract of Sale was deposited at the Land Registry, the Title Deed is available, AND you are a national of an EU member country, your lawyer could go to the Land Registry tomorrow and have the Title Deed registered in your name.

If you are NOT a national of an EU member country, then you have to get permission to own the land from a government department known as the ‘Council of Ministers’ (your lawyer should have applied for permission when you bought the land). When the Council of Ministers gives their approval, your lawyer can go to the Land Registry and have the Title Deed registered in your name. Any delay in getting this approval will not affect your ability to seek ‘Specific Performance’. But as soon as you get permission, you need to get the Title transferred to your name.

Regards,

[cardshark]

(please call me Nigel - everyone else does)

Thank you, Nigel. Your post is appreciated...........respect to you Sir.

I am confused again, sorry, Nigel, I do not understand........please help again.

(Providing the vendor is telling the truth (i.e. he has a Title Deed for the plot you bought) AND there are no other claims against the land that existed BEFORE your contract of sale was deposited – then YES the Title Deeds are available.

Yes the vendor is telling the truth because he has a Title Deed.

My lawyer checked that before the contract was registered that there were no undischarged encumbrances and I have just checked that again with a search and there are still none prior or after registration on the land register.

But that means that the Title Deeds were "Available". See your quote above.

The vendors are under no legal obligation to advise you when the Title Deeds for your property become available.

BUT I DID NOT KNOW BECAUSE HE DID NOT TELL ME AND HE HAD NO OBLIGATION TO TELL ME.

So if 6 months has elapsed then have I lost "specific performance", which is what you were warning about in your post below.

A further point to note on ‘Specific Performance’ is that the encumbrance it creates expires six months after the date of the contract or six months from the last date of transfer specified therein. So if you don’t act quickly and have the property registered in your name within this time window, the owner can sell it to someone else, use it as collateral against a loan, etc.

The clock starts counting down on the six months when the Title Deeds become available (this will/should be referred to in your contract of sale, but a firm date for their availability may not be given).

I am sorry to ask again, I am stupid, I know but this is ALL so confusing.

Nigel. please post again. Thank you.