Due to the long time that it takes for the issue of titles, a new approach has been adopted by the Market in order to by-pass this problem. The cancellation of the original agreement and re-sale. So if one buys a property and wishes to sell it, say, after 7 years (and the property has no title) he is restricted by the wishes of the registered owner (as he is so recorded in the Lands Office records). So a new “invention” has been found, so that existing buyers without titles can sell their property to third parties. The problem arises when the new buyer requires (and he should) his sales agreement to be so deposited at the Lands Office for which the signature of the registered owner is required. So in these cases and unless the registered owner agrees, the existing purchaser cannot dispose the property in the ordinary way. There is a way out of this, by assignment of the rights under the first sales contract to the new buyer. In this case however the first buyer will be called upon to pay transfer fees, as well as the second buyer (double fees) plus the fact that the second buyer will not have a deposited sales contract - a very unsatisfactory solution, which should be avoided and adopted under special circumstances.

The new approach now is the cancellation of the original sales agreement between the registered owner and the original purchaser and the signing of a new sales agreement between the new purchaser and the registered owner. If there is some sort of a written agreement for such an obligation by the registered owner, that may be all well and good. If the original sales agreement however does not stipulate such an obligation by the registered owner, the original buyer becomes enclaved and the subject of exploitation by the registered owner. So we note that a Pafian developer requires a 20% fee on the new sales price, in order to agree to such a procedure, another at the Famagusta area 15% and others make life difficult to existing buyers, even when they are so required by the original sales agreement. This is understandable, to an extent, in case of developers, since they prefer to sell their own unsold units rather than facilitate the sale and their original clients. So and unless in the original sales agreement there is such a cancellation right (and also stipulating the fee for such action by the registered owner) one will have a problem. The cancellation fee will depend on the complications or not of a case, but we will say a fee of €2.000-€4.000 is sufficient and anything more than this, is a blackmail/ransom money and nothing else.

When entering into a cancellation agreement all 3 parties must bear in mind the following:

1. The cancellation and new sales agreement to be made at the same time.

2. At the same time, if the first sales contract is deposited at the Lands Office, this must be withdrawn prior/same time of the signing of the new sales agreement, so that the new sales contract can be deposited.

3. The original buyer must pay for all outstanding property/sewage etc taxes, common expenses etc up to the date of the cancellation agreement.

4. The original buyer must produce to the registered owner a tax clearance from the Income Tax Office.

Once all these are done, the question remains which sales price is going to be so recorded in the new sales contract. If the original buyer bought the apartment for say €100.000 and now he sells it for €160.000, will the registered owner be prepared to sign a sales contract for €160.000 when he got only €100.000? Although this can be cleared in the cancellation agreement, we are not 100% certain whether the tax authorities will not hold the registered owner liable for added tax based on the €160.000 sales price. The second question, which remains, is whether the Lands Office will require or not added transfer fees for the first sales contract. The situation is not at all clear and notwithstanding any reasonable logic that you may bring up during the negotiations with the Tax/Lands Office authorities, you might get a different answer. The situation may increase the risks of the registered owner, since the original buyer might disappear and even if he is so liable for such eventualities, the burden rests on the registered owner, who will be under pressure by the new buyer to perform, whereas the original buyer may not be around or he even may refuse to comply etc etc.

So it is good for all to be aware of what the situation is and all this mess is the end result of the lack of timely titles. We have offered the Government simple and practical ideas how to solve the title issue, using a bunch of measures, but, as we always say, this is a siga-siga (slowly-slowly) country and notwithstanding the eagerness and pressure placed to the Governmental employees and the House by the existing Minister of the Interior Mr Silikiotis to solve the problem, time drags on. This article must be studied together with our previous articles on “New Types of Titles” i.e. instead of having a proper title, a share of the property is transferred instead. This again, is a way round it, but we suggest you study this article as well and seek legal advice prior to making a decision.

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