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Home聽 Articles聽 Will the Cyprus government do more for trapped buyers?

Article

By Nigel Howarth- May 14, 2025

Does the Cyprus government need to do more for trapped buyers?

The question on many people鈥檚 minds remains: will the Cyprus government finally take decisive action to resolve the long-standing and deeply unfair issue of trapped buyers? Or is that still a step too far?

What is the trapped buyers problem?

Thousands of property buyers in Cyprus 鈥� many of them foreigners 鈥� have paid in full for their homes, met all contractual obligations, yet remain unable to secure legal ownership in the form of a Title Deed. Why? Because their developers have existing mortgages or charges against the land, which block transfer of ownership.

After the original trapped buyers law was declared unconstitutional by the Appeals Court, Interior Minister Constantinos Ioannou reported that 9,497 buyers were still trapped 鈥� a staggering figure. It鈥檚 likely that many more buyers remain unaware that they, too, are in this precarious legal limbo.

What the trapped buyers proposal seems to suggest

Under the revised scheme, buyers would need to seek written consent from whoever placed the charges (typically a bank) to have them released or cancelled. If that consent is refused without justification, and the buyer has paid in full, then a court order can be sought to override the refusal.

Sounds fair in theory 鈥� but here鈥檚 the reality:

Buyers must initiate legal proceedings (ching-ching! for lawyers).

Cases can take years to move through the courts.

If the buyer wins, whoever placed the charges can appeal to a higher court, leading to further delays and more legal costs (another ching-ching! for lawyers).

Apart from being an money-earner for lawyers, is that really a 鈥渟olution鈥� for trapped buyers? Or just a legal obstacle course with no end in sight?

Update 15 May

The Cyprus Banking Association (CBA) has objected to court orders overriding the creditor鈥檚 consent to remove pre-existing mortgages and charges arguing it鈥檚 unconstitutional. The CBA has recommended that the trapped buyer needs explicit consent from the creditor to avoid constitutional issues. Concerns were also raised about vague legal terminology, particularly the use of 鈥渁busive鈥� and 鈥渦njustified,鈥� which could lead to uncertainty.

What about planning violations?

The situation gets even messier when planning infringements are involved.

In November 2022, then-Interior Minister Nicos Nouris stated that around 15,000 Title Deed applications were still awaiting approval 鈥� many of which could never be granted due to planning violations that could not be resolved. In some cases, he even admitted that demolition might be the only option.

So, the question becomes: If a buyer鈥檚 property must be demolished, who compensates them?

One friend of mine bought an off-plan apartment in Paphos. When it turned out the developer had breached planning rules, the Title Deed couldn鈥檛 be issued. In the end, the buyers had to pool money to fund the necessary remedial work themselves (which cost in excess of 鈧�100,000.) Why wasn鈥檛 the developer held responsible and made to pay?

How should the government help trapped buyers?

Here are a few practical suggestions the Cyprus government should seriously consider:

Criminalise planning infringements

Hold developers legally and financially responsible for planning violations. Make them either correct the issue or pay a fine large enough to fund third-party repairs 鈥� or end up in jail. And if a buyer suffers losses because of these violations? The developer should fully compensate them.

Guarantee title deed system

In Germany, notaries are mandatory for every property sale. The notary handles the legal checks and ensures that once a contract is signed, the buyer is quickly and securely registered as the legal owner in the Grundbuch (land register). The government guarantees this system, which typically delivers title security within weeks 鈥� not years.

Cyprus? No notary required. Transactions are handled by lawyers (ching-ching), and buyers can wait years 鈥� sometimes decades 鈥� to receive their deeds. Often, they only receive a sales contract, not legal ownership.

France operates a similarly strict and reliable system.

Government-run building inspections

Introduce independent, incorruptible inspections during construction, funded by a small levy on planning and building applications. This would reduce future violations and ensure build quality from the outset.

Use of escrow accounts

All buyer payments should go into escrow accounts.聽 This would protect buyers and ensures that banks, tax authorities and suppliers are paid by the developer.

Do not reject new applications without Title Deeds

The government must not reject new trapped buyer applications in cases where Title Deeds have not been issued. There are potentially hundreds, possibly thousands of properties that cannot be issued with Title Deeds due to planning violations. The government must help all innocent buyers trapped by planning violations.

The project supervisor (architect or civil engineer) is the main professional responsible for declaring and ensuring compliance with the Town Planning Permit and Building Permit conditions. Compliance is mandatory before Title Deeds can be issued.

I鈥檓 aware of a number of cases where project supervisors have refused to declare compliance because: (i) the development does not comply with the permits (ii) they have not been paid by the developer who engaged them.

Cyprus must step up

If Cyprus wants to be seen as a modern, trustworthy EU country, it must do more than just tinker around the edges of a broken system. It needs bold reforms, firm enforcement, and a real commitment to protecting property buyers 鈥� not leaving them at the mercy of rogue developers, dodgy lawyers, bureaucratic delays, or endless court battles.

The trapped buyer situation has dragged on for far too long. It鈥檚 time for real action 鈥� and not just for the sake of those already affected, but to restore confidence in the property sector and uphold the country鈥檚 international reputation.

With thanks to

Source Nigel Howarth

Cyprus Property News

Sounds like the lawyers are not making sure there is clear title before proceeding in the case of outstanding mortgages with builders. Same with building regs. These should be secured before proceeding. I am not a fan of insurance or compensation as these general turn out to be a waiting game and just because your should get paid does not mean you will get paid! Builders go bust and the clauses in insurance will take years to decipher.

The term 'buyer beware' comes to mind and until the Cyprus government fix the issue properly by making sure the lawyers or some other body do the job of making sure there is clear title the issue will persist.

Cyprus is working towards being seen as a great place to attract investors and HNW immigrants this could scupper that and bad news travels fast!

Like so many other property related issues.. IE joint ownership buildings laws, swimming pool regulations... this will be another fudged solution with no end in sight for the unwitting buyer.... but plenty money for lawyers, banks etc

This latest article is just such an instance of why all buyers should be aware and to have their lawyers prove they have made ALL the checks to ensure the property is not in any way encumbered.....

ARTICLE

Trapped buyers unprotected, banks fight to keep courts at bay

Cyprus

Sunday 18 May | 04:24

8 Comments

By Rebekah Gregoriades

As threatening bank letters are sent to borrowers who cannot obtain title deeds to their properties, the realisation is setting in that decades of diligently paying loans may in the end mean nothing, while the government is accused of looking on idly.

For years, so-called trapped buyers have been promised schemes, special courts, support and ways out of their predicament for which they were not to blame in the first place.

It was said in parliament this week there are still approximately 10,000 trapped buyers who fell victim to bad practices, but the figure could be much higher.

They cover a broad spectrum of cases. Some title deeds have not been issued because the properties never received their final planning approvals or building permits because they deviated from the original plan. Others are withheld by the banks because there are outstanding developer mortgages on the land even though the property owners paid for their homes in full. And then, there are the buyers saddled with developer debts because the banks are unable to get their money back from the developers.

These and other reasons have left buyers unable to obtain title deeds, making it impossible to sell or transfer their property. Thus, they are trapped.

FD is one trapped buyer whose title deed was issued after years of struggle. The deed was withheld on both building permit grounds and because of a developer mortgage. But she is still in danger of losing her home and is contemplating legal measures against the banks.

The reason? She has to pay a share of her developer鈥檚 mortgage, and although she is still paying her instalments, the excessive bank fees and increasing interest rates mean she cannot guarantee her loan will remain performing. Therefore, she may be included in the foreclosure category, in which case she says she will not be entitled to sue.

鈥淲hen someone鈥檚 account is in the red, they take their home,鈥� FD explained.

FD said the borrowers whose property was foreclosed 鈥渃an sue the state locally and 鈥� when they lose 鈥� they can then take their case to European courts, however most people cannot afford this course of action.鈥�

Disy MP Averof Neophytou said last November that the government of Nicos Anastasiades had given the banks the authority to foreclose property before court proceedings had been completed.

He explained that the European Central Bank was breathing down the government鈥檚 neck to do something about the fact that trials were taking up to ten years, otherwise the banks鈥� collateral would be considered of zero value.

So, in July 2018 the House passed the government bill on foreclosures, which if rejected would have led to 鈥渁 haircut worse than that of 2013鈥�, he said.

鈥淚t was a mistake,鈥� Neophytou admitted.

Buyers feel their rights have been violated, they have been treated unfairly and have been left exposed.

Solomon Solomou from Limassol last week posted a series of videos on Facebook in which explains how he went from a good customer to being evicted from the 228m虏 house he purchased from a developer in 2008.

In the videos, walking through his empty house for the last time, Solomou says the property was bought based on his income from his business at the time 鈥� CS&K Aluminium Industry Ltd 鈥� and he had not missed an instalment up until 2014, when he buckled under the weight of the financial crisis and the 2013 haircut.

After that, he went through restructuring from 2015 to 2017, sent a letter to the bank in 2017 relinquishing his house, the bank rejected the letter and instead his interest rates and charges skyrocketed. In 2018 he took out a loan to cover the missed instalments and subsequently found himself back at square one.

Solomon Solomou鈥檚 factory

In the meantime, he obtained the final planning approval for the house, after which 鈥渢he bank sued me, took possession of my house and evicted me and my family. They also closed my factory for 鈧�30,000 because it was part of the guarantee/collateral, even though I could have paid off the loan,鈥� he said.

Solomou said what had happened to him was equivalent to being made a refugee by his own people and blamed the political leadership, the government and all those involved.

On Wednesday, banks and credit institutions voiced strong opposition to a new bill to unblock long-stalled title deeds for thousands of homeowners, telling the House legal committee that the proposal granted affected buyers access to the courts.

But Interior Minister Constantinos Ioannou, who attended the session, defended the bill, saying it was 鈥渢he best possible solution鈥�.

Official figures presented at the meeting show that 9,497 buyers remain trapped in limbo. Of these, 5,417 have no title deeds at all, largely due to missing final town planning or building permits. Most of the remaining 4,080 cases involve buyers who have paid in full but cannot obtain title deeds because developers have outstanding mortgages on the land the properties were built on.

Committee chairman Nikos Tornaritis said the committee would now be seeking guidance from the Supreme Court on judicial timelines.

Cyprus has faced repeated criticism from EU institutions over the unresolved title deed saga.

According to EU directive EC 93-13, 鈥渁 contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties鈥� rights and obligations arising under the contract, to the detriment of the consumer [鈥�] The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract鈥︹��

Trapped buyers feel the government and parliament are preparing 鈥測et another monstrosity鈥� to show the EU that they are protecting them as property owners.

鈥淭his is always their aim 鈥� to throw dust in the eyes of the EU that they are protecting consumers, take a few consumers and protect them without the banks losing anything, the state assuming the burden but in this way the taxpayers are still paying for the excessive charges,鈥� another trapped buyer said.

Speaking to the Cyprus Mail, KG gave his own opinion about what happened and how things came this far.

鈥淭here were a lot of people buying property under construction and paid the developer in good faith, either by getting a loan from the bank that had funded the project or from another bank.

鈥淭he banks paid the developer on behalf of the buyer but never made sure that the developer had paid off his own loan beforehand.

鈥淲hat they did was they paid the developer the money received from the buyers, in many cases feeding them with new loans for new projects.

鈥淎t some point, all these developers with the blessing of the banks made off with the people鈥檚 money.

鈥淭he land on which the houses and apartments were built remained mortgaged to the developers and separate title deeds were not issued because of town planning issues.

鈥淭he developers themselves in some cases did not apply for a building permit or 鈥� if they did 鈥� separate title deeds were issued first in their name, as long as no issues were pending,鈥� he added.

鈥淗owever, the houses and apartments remained the property of the developers, while the land they were built on was mortgaged.

鈥淚f some owners of such investments did not make a move to receive title deeds, they remain trapped till today,鈥� KG said.

He added that there were various categories of trapped buyers.

He said there were trapped buyers who did not receive a final building permit approval.

鈥淭he developer built something as he wished, took the money from the buyers and left them hanging, disappeared. Then, there are trapped buyers who have received their building permit and there is a separate title deed in the name of the developer,鈥� he explained.

KG added that an effort to solve the problem and put things right was made in 2015 by the late Interior Minister Socratis Hasikos when the House passed a law on issue of developer mortgages. 鈥淏ut the banks surprise-surprise overturned the decision and have been sending letters to people, even those who have paid off their mortgage, demanding that they also pay off part of the developers鈥� debts.鈥�

The head of the land registry had been granted the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions, as the state sought to sort out the title deed mess.

In July 2018, banks and the legislature struck a gentlemen鈥檚 agreement aiming to resolve the matter. In exchange for MPs approving legislation, making it easier for banks to collect their dues, the banks association agreed not to raise any objections over the issue of buyers trapped without title deeds as long as the transaction was done in good faith.

One now has to wait and see how discussions on the new proposed legislation, will go and whether MPs will succumb to pressure or send the bill to the plenum.

Source Cyprus Mail