Whether you’re looking into your first property venture in Cyprus, doing some initial research online or are even a current homeowner on the island looking to sell your property, you have probably come across the term ‘Title Deeds’.
Whilst the term ‘Title Deeds’ is a simple piece of documentation; it leads itself to being one of the single most important documentation you need when buying & selling property.
Here’s why.
What is a Title Deed?
The term ‘Title Deed’, simply put, is a piece of documentation that is used as an official record of who owns the immovable property. Also known as a “Certificate of Registration of Immovable Property” a title deed is often provided to new homeowners when purchasing a property. It includes the name and identity number of the person or persons who legally own the property. It is possible for more than one owner to be listed on the title deed.
Alongside owner identity, the title features a lot of further information relating to the physical property. Information such as:
- Location
- Physical property size
- Property boundaries
- Reference number of property
- Purchase price
- If there are any restrictions to the sale of a property i.e. Home Loans, disputes.
How Important are Title Deeds?
When buying property, the most important aspect to keep in mind, is that title deeds are the only piece of documentation that fully secures the ownership of the property in the eyes of the law. Without the title deed, you run into potential issues such as not being able to mortgage your property, as financial institutions require you own the title deed. You are also unable to make any changes to the property without the consent and the agreement of the Title Deed holder.
Full Title Deeds vs Title Deeds Available
A confusing matter for a lot of first-time property buyers in Cyprus is the misunderstanding between full title deeds and title deeds available. Whilst people tend to assume that the condition of “Full Title Deeds & Title Deeds Available” are the same thing, but they actually refer to two separate legal concepts.
Full title deeds means the property’s full ownership is transferred along with the purchase of the property, including the Title Deeds, meaning that you have the full rights to use and benefit from that property. In addition, as because the title deeds are transferred in your name upon sale, you can then resell or mortgage the property in your name by providing the bank the title deeds.
Title Deeds Available means that whilst any buyer has the right to the title deed, the transfer procedure into the buyer’s name is not be included in the sale and remains registered in the seller’s name. The reason this option is sometimes exercised, is that the property is cheaper to buy as the buyer doesn’t pay the Land Registry fee to transfer ownership. As this can be a substantial cost, some buyers prefer to first purchase the property then, at a later stage return to transfer title deeds into their name.
Certifying a Title Deed
It’s an important note, that when purchasing a property to have the title deed of the property certified by a lawyer who in turn will ensure there are no outstanding issues with the title deeds. Issues such as confirming the immovable property taxes, municipality taxes and any income or capital gains taxes have been paid, as well as confirming the relevant Tax Clearance Certificates have been issued for the property. The lawyer will also track down any pending bills such as any utility bills, garbage bill, any local taxes due as well as communal fees for apartment building and ensure they are all paid in due course. Once all of these pending expenses have been settled, the contracts will need to be stamped by the tax authorities meaning the buyer can begin the process of transferring the title deeds.
Transferring the title deeds
Once all due diligence is complete, the contracts signed for the property and payments transferred, including stamp duties you can start the process of transferring the title deeds. The transfer process takes place at the Department of Land and Surveys where they will, once you have submitted your application for transfer of the title deeds, ensure all relevant information is correct and make any necessary checks.
The overall process is a relatively simple process however the entire process depends on all individual cases. The department confirms that all relevant regulations have been adhered to and that the property has all relevant permits and licenses. Furthermore, they thoroughly check that all taxes, encumbrances and charges have been paid, including the property transfer fees and stamp duties to the Department of Land and Surveys.
The process only becomes complicated when the Department discovers any pending legal obligations against the property. Obligations such as mortgages, encumbrances, burdens on the property, illegal alterations made to the building or property boundaries which do not align with approved blueprints.
If the Title Deed in question is part of an apartment block or a complex then there are extra processes and checks needed. It’s necessary for there to be a division of the land, as when the land it purchased its one block, for the developers to gain all necessary planning permits. Health and Safety checks also need to be done should that be for Fire safety regulations or for swimming pool licenses, all checks need to be completed before the transfer of the Title Deeds over to the new owner.
Once all of the above checks are done and the Department of Land and Surveys have done all required due diligence then the transfers are approved. This process can take anywhere between several weeks to a few months should no complications arise.