On Thursday, June 26, the Cyprus Parliament unanimously passed a law aimed at restoring the rights of property buyers who found themselves in a legal bind.
These owners have paid in full for their apartments and houses, yet they have been unable to register titles due to encumbrances related to the developers' debts.
The new measures will approve around 9,500 applications. The law is intended to reinstate the guarantees that property buyers lost when the previous law was deemed unconstitutional in 2024. The law provides an opportunity to obtain title documents, even when the seller (usually the developer) cannot transfer them due to debts or legal restrictions. One of the key issues this law addresses is banks' and other creditors' arbitrary refusal to remove property encumbrances despite the buyer having paid in full. The law gives buyers the right to seek transfer of rights through the courts if creditors do not explain their refusal on reasonable grounds. It works as follows:
- If there are encumbrances or prohibitions on the property, and the owner of these encumbrances (e.g., a bank) does not consent to the transfer of rights — even if the buyer has paid for the property in full — then a court order may replace the consent.
- The buyer may request such an order within 45 days of the creditor's refusal.
- Until the court makes a decision, all actions involving the property are suspended to protect the buyer's interests.
- After receiving the court order, the head of the Land Department has the legal authority to register the property in the buyer's name without the creditor's consent.
According to the Cypriot Ministry of the Interior, today's decision will allow property owners to emerge from the legal uncertainty in which they have found themselves for many years.
DISY MP Fotini Tsiridou noted that the new law was the result of "a persistent and long-standing struggle to eliminate the glaring injustice against bona fide buyers who have been unable to exercise their rights for many years."
Speaking on behalf of the AKEL party, Aristos Damianou said that, while the new law is not perfect, it provides a real solution for at least 3,000 people right now and paves the way for a systematic resolution of the problem in the future.
Thousands of people in Cyprus found themselves "hostages" to a scheme in which they bought homes and paid for them in full but were left without title deeds because the developer owed money to the bank, and the properties were listed as collateral.
The properties were considered assets of the developer company and were subject to foreclosure. This gave creditors the formal right to prevent the transfer of ownership, the Ministry of the Interior explained.
Now, thanks to the new legislation, buyers who have paid their share will be able to obtain legal ownership, even if the developer is bankrupt or under arrest. The law is an important but interim step. As Damian emphasized, work must continue to fully resolve the issue, including developing mechanisms to ensure more transparent and secure property transfer schemes in the future.
In the near future, the Committee on Internal Affairs intends to review procedures for supporting victims through the ministry's online platform. The committee also plans to propose mechanisms to protect new buyers, ensuring that such cases do not recur.