How Important are Title Deeds for Properties in Cyprus
When it comes to buying a property in Cyprus, you may have come across the term ‘Title Deeds’ during your search – whether you’re getting ready to take the plunge, you already own a Cypriot home, or if you’re simply browsing online and aren’t too serious about making the move just yet.
These important pieces of documentation (also known as Certificates of Registration of Immovable Property) are often provided to new homeowners to prove the current state of legal home ownership. These should feature information relating to the house in question; often including the location and size of the home (and sometimes the plot), the Lands' Office reference number and the name of the newly-registered owner.
How Important are Title Deeds?
The most important thing to consider when asking how important Title Deeds are outside of the UK (especially amid Brexit concerns) is that they are the only piece of documentation that fully secures the ownership of a property in the eyes of the law.
What this means is that, if you are not in receipt of the deeds to a property, you may save a bit of cash (while the deeds should be yours, they come with a fee to transfer into your name, often along with the sale of the property), but you’ll also be opening yourself up to a host of potential issues.
If you do not transfer the property you have purchased into your name, you will not be considered the legal owner.
Owning a house without Title Deeds
Selling your unregistered property
Overlooking transferring your deeds could see you having to either cancel or transfer your contract of sale (which should have been provided by your Estate Agent and lawyer during the buying process) back to the ‘registered’ owner – who is the person currently in receipt of the deeds, even if they don’t ‘own’ the property – when you decide that you want to sell. The registered owner will be the only one who can enter into a new sale agreement with potential buyers.
This can cause issues in and of itself, as there are those who would take advantage and expect financial compensation for their trouble (sometimes in the tens of thousands of euros). Luckily, Cypriot law is working to make changes to safeguard true owners in these types of instances.
With this in mind, more and more Cypriot financial institutions are understandably beginning to refuse to grant mortgages on resale properties where the current owner doesn’t hold Title Deeds, meaning that cash buyers will likely be the only option to complete a sale.
Potential mortgage issues
Unfortunately for those without the correct Title Deeds, the registered owner will still have the ability to control certain financial aspects of the property, including those relating to mortgages. They will be legally able to:
· Apply for a mortgage on your land
· Obtain loans using your property as capital
· Alter any outstanding mortgage by rescheduling it, minimising or extending the contract, increasing the loan and more – even if it is in your name
And all without your knowledge or consent.
By the same token, you (as the owner) will not have access to these kinds of financial privileges – so if you were hoping to raise money against your property or to access equity, you won’t be able to.
Properties without the correct Title Deeds could potentially be built illegally (without the necessary permits) and if this is found to be the case, can be demolished by the authorities. At the same time, the owner won’t have the ability to make changes to the property without consent from the registered owner – and may face the legal destruction of any additions obtained without approval.
It may also be worth noting that dishonest property developers have been known to extort money from unsuspecting homeowners without Title Deeds by claiming that they owe large amounts in Immovable Property Tax and then pocketing the cash.
Obtaining Title Deeds in Cyprus
To make sure that you own a house with Title Deeds, it is important to apply for the transfer of ownership of the property in question once you have the Contract of Sale. This can be done at the districts’ specific branch of Land Registry (the address of which can be obtained from a number of sources, including an Estate Agent or online). You will be expected to pay a fee for the transfer and will have to wait while the application goes through.
This acquisition can take anywhere between a few weeks and a few years, but as this is typical of the process in Cyprus, there’s often no need for concern. Those buying now (and in the future) and applying for title deeds are likely to wait less time than those who are trying to transfer the ownership of their property years after the sale was completed.