Missing Property Title Deeds

Are you Missing Your Freehold Property Title Deeds?

If you own a freehold house or apartment in Cyprus but do not have your title deeds then you are in good company. Louise Zambartis explains why the deeds may be missing and what you can do about it.

The owners of around 100,000 properties in Cyprus, or one in five, have not been able to obtain their title deeds. While some of those people have been waiting for the more-or-less expected five years, there are others who have been trying to get their deeds for thirty years or more.

The title deed problem has been highlighted recently in the press and both the Cypriot and British governments have entered the fray. After coming under increasing pressure to do something about the situation, the Minister of Interior, Neoclis Sylikiotis has stated that serious efforts have been made to bring about the reformation of the whole system for issuing title deeds in Cyprus. A package of amendments has been promised which should contribute to speeding up the issuing of title deeds and the goal is to issue twenty thousand title deeds by the middle of 2010. If this comes to pass, it will constitute a one fifth reduction in the number of people who are currently facing difficulties.

Assuming the changes are actually made, some of those waiting for their title deeds may find a solution. Clearly many others will not. In order to know whether you are likely to get your deeds any time soon, it is essential that the property owner understands the reasons why he does not have his deeds. It is only by knowing the cause of the problem that we can see if a cure will be available.

It is useful to have an idea of the process which must be followed in order for title deeds to be issued. First, it should be understood that title deeds exist for all of the land in Cyprus as a system of registered land operates. If you buy a complete plot with its own certificate of registration (title deeds) then this will be transferred into your name and you have your title deeds, no problem. Where we have problems with title deeds is where an existing plot is to be subdivided into smaller plots. Each of those parts will eventually be issued with its own new and separate title deed. So, how does that come to pass?

Everything begins and ends with the developer. An application must be filed for the division of the plot and a permit obtained. The properties, (these might be a group of houses or apartments which are part of a project) must be completed. The developer must then submit paperwork confirming completion to the local government planning department. The planning department will check that construction has been completed in accordance with the planning permit and building license issued to the developer. Assuming all is well, a certificate of completion is filed at the Land Registry and they will then begin the process of issuing the separate title deeds for each of the individual properties on a project. Finally, when the Land Registry’s work has been done, the developer will be notified that the separate title deeds are ready to be issued and this information should be passed on to the buyers. At this point, the transfer fees should be paid by the buyer and within a few months the deeds are sent out by the Land Registry. It is only at this point in time that the buyer of the property becomes the absolute legal owner of his property.

As can be seen, the developer, central government departments and local government departments are all involved in the process for the issuance of separate title deeds. This gives plenty of opportunity for something to go wrong and for delays to occur.

The most common causes of delays are as follows;

• The fact that the developer himself is not the sole owner of the land – i.e there are co-owners and other pending sub divisions of the plot
• Developers delaying in completing the actual physical construction of projects, with this situation having been made much worse since the start of the economic crisis;
• Developers delaying in submitting their paperwork to the authorities;
• Developers building properties without planning permission or a building licence being in place or building in contravention of the permits and failing to seek suitable revisions to the permits.
• Developers being unable to discharge any mortgage which they may have over the entire plot of land upon which a project has been built;
• Developers finding themselves unable to pay the taxes which must be paid to the government before title deeds can be transferred to the individual owners.
• Delays and inefficiency within the local government planning departments;
• Delays and inefficiencies in central government departments i.e. the Land Registry;
• Finally the owners themselves can be the cause of their own problem if they have made changes to their property without securing in advance the necessary planning permit and building licence.

For anybody worried about their title deeds, it is important to find out which of the above problems apply to their case. Establishing where in the process the problem lies is something which can easily be done by a lawyer. Once we know where the problem is then we can set about trying to fix it.

Provided the purchase contract was registered at the Land Registry then the buyer has the right to take court action to force the developer to transfer the separate title deed into his name. This can only be done if the Land Registry has completed its work and the title deeds are ready. If this is the situation then we know that the cause of the delay is most probably financial difficulties on the part of the developer which mean he is unable to pay his taxes and obtain the necessary clearance or to discharge his mortgage on the land. In the current economic climate this is likely to be a common cause of delay in obtaining title deeds. The Minister of the Interior does not appear to have specifically addressed this problem save to mention that it is proposed to introduce penalty fines to be applied to developers who do not cooperate in a timely manner. It is difficult to see how this will help in the situation where the developer is not transferring the deeds owing to lack of finance!

In addition to checking on the source of the delay with the title deeds, there are also certain other steps which all owners of property who do not have their deeds should take. Firstly the buyer should make sure that his contract has been registered at the Land Registry. This is something which should be done by the buyer’s lawyer at the time of the original purchase and this also applies to properties which have been purchased off plan. If the contract has been registered, it will have a deposition number and a receipt will have been issued by the Land Registry. If you did not use a lawyer and instead relied on the developer to complete the formalities of the sale, there is a significant risk that your contract will not have been registered. As this deprives you of important rights when it comes to the issuance of separate title deeds, this is something which you should seek to have rectified as quickly as possible.

Secondly, all owners of properties without separate title deeds should know the position in relation to mortgages which the developer has taken out on the whole plot of land on which the project has been built. We are only interested in mortgages which were registered before the buyer’s contract of sale and it is important to be aware that most land will have been mortgaged by the developer. It is not necessarily the case that buyers will have been told about this at the time of the purchase. It is only by knowing the mortgage status of the land that individual owners can assess the risk they are taking when buying a property and how likely it is they will get their deeds.

To conclude, it is to be hoped that the package of proposed reforms will actually become law. If they do assistance will be available to some of the home owners currently waiting for their title deeds. It is certainly good to know that the problem is being addressed rather than ignored as it has been in the past. Nevertheless, it is important for homeowners to take some responsibility upon themselves to find out what is causing the delay in their particular case and to take appropriate action for the protection of their own property.