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Amendments to the Sale of Property (Specific Performance) Law

The recent enactment of the Sale of Property (Specific Performance) Law Ν.81(Ι)/2011 introduces notable changes to the legal framework governing immovable property transactions. The amended legislative provisions aim to enhance buyer protection.

Mandatory submission of a Search Certificate V

Pursuant to the amendments, sellers are now statutorily obliged to include an immovable property search certificate (Search Certificate), which is obtained from the Land Registry Department, detailing any encumbrances on the property being sold. The Search Certificate must be appended to the Contracts and must be dated no later than five working days from the day of execution of the Contracts.

Immovable property subject to mortgages or other liens 

In relation to Contracts which are subject to mortgages or prior lodged agreements, their submission to the Land Registry Department is now contingent upon the provision of a written statutory declaration.

 In cases where, there is a registered mortgage encumbering the relevant immovable property, a Contract can be submitted accompanied by a statotury declaration, pursuant to the provisions of which which the buyer and/or the seller can deposit an amount equal to the 95% (ninety five per centum) of the sale price (the Consideration) into the seller’s bank account or the seller’s lender, (“the Lender”). The Lender must countersign the statutory declaration pursuan to the provisions of which he remove or release the said immovable property from the any mortgages and deliver to the buyer a signed an additional statutory declaration to this effect.

By way of an alternative, the buyer may proceed with the submission of the Contract to the relevant District Land Registry, without it being accompanied by the written declarations as aforesaid stated but by submitting the Contract with written declaration which confirms that the buyer is aware of the existing mortgage upon the property.

Administrative fines 

In case of non-adherence with the Law the Director of the Land Registry Office has the discretionary power to impose administrative fines of up to:

• €100,000 on lenders who deliberately fail to comply with their obligation of accepting the amount specified above but faile to release the property from the any mortages or other encubrances; and
• € 10,000 on sellers who fail to provide a Search Certificate as an integral part of the Contact.

 Overall, these legislative changes reflect a proactive approach aiming to enchance the efficiency of property transactions, aligning with broader efforts to strengthen legal frameworks and promote transparency in real estate transactions in Cyprus.