The new law providing for the deposit of sale or other agreements at the Land Registry, the consequences thereon, the vendor’s obligations and the specific performance which was enacted recently, was published in the Official Gazette on 29.4.2011 with a proviso that it will come into force after three months from its publication.
The period for the deposit of a sale agreement is extended to six months from the date of its signing and there is a possibility after the expiration of this period, the sale agreement to be deposited through an order of the Court, if it is to the benefit of the purchaser. Other agreements can also be deposited, such as assignments, exchange or buy-back agreements and any clause in a sale or assignment agreement forbidding its deposit is considered void.
The new legislation protects more adequately the rights of a purchaser or any other party to any of the above agreements, provides remedies and solves a lot of problems the purchasers had to face with unscrupulous vendors.
One of the innovations provided in the new law is the right given to purchasers and other parties who did not deposit their agreements, to do so within a period of six months from 29.7.2011, irrespective of the time they were signed. The said right is given to every purchaser or other party despite any litigation pending before the Court with regard to any such sale contract or agreement.
The law providing for the deposit of assignments at the Land Registry giving protection to the assignees will benefit mainly the banks and other banking institutions, since they will be able to deposit the assignment agreements and acquire the rights and remedies provided in the law. The consequences of the deposit of the sale, assignment or other agreements at the Land Registry is the creation of an estate in land upon the immovable property subject matter of the agreement which ranks according to the time of their deposit. With regard to assignments, the assignee acquires the estate in land created by the deposit of the sale agreement.
Every sale or other agreement can be specifically enforced by an order of the Court, provided the action is brought within the time limit set out in the limitation law relating to claims arising from breach of contract. In the event the agreement is written but it was not deposited or it is oral, the Court has the power to order its enforcement, provided the rights of third persons deriving from previous estates in land or prohibitions are not affected and provided further the agreement defines adequately the parties and the property and there is a registration of the property in the Land Registry records in the name of the vendor. The Court ordering the specific performance of an agreement may impose any terms it thinks necessary, including an order to obtain the relevant permits and approvals for the issue of the separate title deed for the property.
A person who obtains an order for specific performance must apply within a year to the appropriate Land Registry Office for the registration of the property into his name. He has to submit the order of the Court and the other certificates which are necessary for the transfer of the property. Where the property has not been delivered to the person named in the order, the Court has the power to order the delivery of its possession to him.
There are certain other provisions in the law referring to the remedy of damages in lieu of the issue of the order of specific performance, the assignment of a sale contract and the prohibition imposed to the assignor that he cannot withdraw the sale contract without the written consent of the assignee, the remedies available in the event the property is mortgaged prior to the sale contract and others. The remedy available to the vendor is only damages for breach of contract.
It seems from the above that many problems will be eliminated and the purchasers can safely buy a property.
George Coucounis is an experienced lawyer practicing in Larnaca, Cyprus.
Educated at University College (London) and Thessaloniki University (Greece), George is fluent in English and has been practicing law in Cyprus since 1982.