On December 12th, 2023, the legislative framework of Cyprus witnessed a significant development with the publication of Law 132(I) of 2023. This legal enactment brought about amendments to the Sale of Immovable Property (Specific Performance) Law of 2011 (Law 81(I)/2011). The amendments primarily target the procedural aspects concerning the submission of property sale contracts to the Department of Lands and Surveys and the enforcement of specific performance provisions within such contracts.
Objectives of the Amended Law
The core objective of Law 132(I) of 2023 is to safeguard the interests of Purchasers by streamlining the specific performance procedure. By doing so, the law endeavors to ensure prompt property transfer to the Purchaser upon fulfillment of contractual obligations. The overarching aim is to establish a protective mechanism for Purchasers of immovable property, thereby mitigating the risk of buyers becoming ensnared in legal complexities.
Key Provisions and Amendments
The amended law introduces new obligations binding upon all concerned parties, including Vendors, Purchasers, and Secured Creditors/Mortgagees. These obligations entail the submission of supplementary documentation alongside the Sale Agreement during its registration with the Department of Lands and Surveys.
One significant provision mandates sellers to append a property search certificate to the sale contract, the issuance date of which must not exceed five working days from the contract signing date. Moreover, in cases where a seller's property is encumbered by a mortgage or contract, the registration of the sale contract requires written declarations from both the mortgagor and seller. These declarations, categorized as Type A or Type C, ensure that the buyer receives timely and accurate information regarding any encumbrances associated with the property.
Mechanisms for Legal Protection
The amended law imposes stringent obligations on sellers to prevent the concealment of pre-existing mortgages or contracts. This includes scenarios where land developers mortgage a portion of land to secure loans for other buyers. By mandating transparent disclosure, the law aims to avert fraudulent practices and shield buyers from potential financial and legal burdens.
The written declarations, as per Form A, outline the specifics of registered mortgages and offer assurances regarding the discharge of mortgages upon fulfillment of contractual obligations. Additionally, Form A delineates procedures for discharging properties from mortgages, ensuring clarity and legal compliance throughout the transaction process.
Enforcement and Sanctions
Law 132(I) of 2023 establishes sanctions for non-compliance with prescribed obligations. Sellers and mortgagors failing to adhere to their duties may face administrative fines, with amounts not exceeding €10,000 for sellers and €100,000 for mortgagors. Prior notification and an opportunity to present representations are provided before the imposition of fines.
Conclusion
In conclusion, the amendments introduced by Law 132(I) of 2023 address longstanding issues surrounding real estate transactions in Cyprus. By enhancing legal protections and promoting transparency, the law bolsters confidence in property acquisitions while ensuring equitable outcomes for all parties involved. Ultimately, it heralds a new era of regulatory clarity and efficiency in the realm of immovable property transactions.