Enclaved Purchasers

Transfer of a property in the name of an “enclaved buyer”. A new deadline is approaching.

Did you know that the right of all purchasers who did not lodge and/or submit their sale contract or assignment agreement before the District Land Office lapses on 31.12.2022?

The recent legislation is judged to be fair as it is undoubtedly a significant step for the protection of the purchasers who have fully paid the agreed purchase price according to their sale agreement and have not yet receive the separate title deed of their immovable property for reasons beyond their control.

The legislator in an attempt to further help and assist those purchasers who have not filed their sale agreement or their assignment agreement before the District Land Registry has set the deadline for filing an application with the Court on 31.12.2022.

Scope of the Law

The House of Representatives enacted the Immovable Property (Transfer and Mortgage) (Amendment) Law 139 (I) 2015 which entered into force on 4^th of September 2015 at the same time, the House of Representatives enacted the Immovable Property (Transfer and Mortgage) (Protection of Buyers) Regulations (Regulatory Administrative Act KPD 298/2015) of 2015 as amended. This legislation introduces provisions for the transfer of property to the buyers who have fulfilled their obligations under the sales agreement with the seller, but he is unable or neglects or fails to transfer the property in their name because the property or part of it, it is subject to prohibition and/or mortgage and/or encumbrances.

Who is entitled to lodge an application

The buyer is not the only one who is entitled to submit an application. The law also gives the right to the seller to submit an application for transferring the property into the name of the buyer. In addition, others who are entitled to submit an application are the mortgagee under the mortgage contract deposited in the Land Registry, the lender under the loan agreement with the buyer, the assignee under the deposited assignment contract with the assignor as well as the Director of Lands and Surveys Department (ex officio).

The prerequisite for the implementation of the provisions of the Law is that the contract of sale has been deposited at the competent District Lands Office by 31/12/2014 or the application to be submitted pursuant to a Court order issued in accordance with the Sale of Real Estate (Special Report) Law 81(I)/2011 or an application submitted to the Court by 31.12.2022 in order to transfer the property to the buyers.

The Basic Conditions

According to the provisions of the legislation all the following conditions for the transfer of the title deed must be met.

• The full payment of the purchase price
• The existence of the registered title deed of the property which is the object of the contract and
• The fulfilment of the contractual obligations of the buyer to pay the taxes on the property which is the object of the contract.

The Process

Where the Director of the Land Registry is examining the application of an enclaved buyer and he is satisfied that all the above conditions are met he sent a written notification giving a period of forty-five (45) days to the buyer, the seller, the mortgagee and any person in whose favour an encumbrance or prohibition is in effect of his intention to discharge, extinguish or cancel the mortgage, encumbrance or prohibition and transfer the property to the name of the buyer. Upon completion of the above a relevant notice will be sent to the interested parties calling them within sixty (60) days from the date of service of the notice to proceed with the transfer of the property to the name of the buyer. The buyer will then be notified within this period to pay the fees for the transfer.

The Payment of Taxes

The buyer must present to the District Land Office the certificates from the Commissioner for Taxation and every competent Tax Authority, that he has paid his dues for the following taxes up to the date of the transfer of the property in his name:

• Immovable Property Tax
• Immovable Property Fee
• Sewerage Charges

The new proposal for amendment

The Council of Ministers approved on 30.9.2022, the legislation entitled: “The Sale of Real Estate (Special Execution) (Amendment) Law of 2022” with the aim of solving the serious financial, property and moral problem that exists today with real estate buyers, who while they have fully fulfilled their contractual obligations towards the seller, the seller is unable, due to the existence of encumbrances, to transfer the property in their name. The Ministry of Finance although expects the cooperation of all parties involved during the discussion of the proposed legislation to the House of Representatives so that it is voted the soonest possible.

How we can assist you

• Apply to the District Court for a specific performance order enabling the buyer to submit the purchase agreement to the Land Registry.
• Representation to the Land Registry for the filing of the purchase agreement
• File an application to the Land registry for the right of having the property transferred to the clients’ name (AEA application)
• Represent client before tax authorities for issuance of tax clearance certificates
• Issuance of title deed to the name of client.