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Rights and registration

Rights

What types of holding right over real estate are acknowledged by law in your jurisdiction?

There are two types of holding right over real estate in Cyprus: freehold and leasehold.

It is possible to secure occupation of premises in advance of construction or an existing occupier vacating (eg, through an agreement for lease), provided that this is sufficiently detailed to be binding under the Contract Law, and not merely ‘an agreement to agree’. Section 77 of the Contract Law provides that for a lease of immovable property with a term exceeding one year to be valid and enforceable, it must be signed at the end by or on behalf of each party in the presence of at least two witnesses, who must add their names as witnesses. There is no domestic case law on whether an agreement to lease requires the same formalities, but it would be prudent to comply with them.

Leases exceeding 15 years may be registered with the Land Registry, provided that this is specifically provided for in the lease. Registration should be effected within three months of signing the lease. Registered leases give the tenant certain advantages, including the right to trade the lease. Non-EU citizens may not take a lease of immovable property for a period exceeding 33 years without prior permission from the Council of Ministers, and they are not allowed to let their premises. However, this restriction does not apply to EU citizens or companies incorporated in an EU or European Economic Area member state.

Are rights to land and buildings on the land legally separable?

Yes, depending on the right in question. Under the Immovable Property (Registration, Tenure and Valuation) Law (Cap 224), the definition of ‘land’ includes any buildings erected on a piece of land. However, the right to use or occupy a property may be limited to a building or part thereof.

Which parties may hold and exercise rights over real estate? Are there restrictions on foreign ownership of property?

Any registered owner of a property, a lease holder or a licensee may exercise rights over the property.

The Immovable Property Acquisition (Aliens) Law, which dates back to the colonial era, required non-Cypriots wishing to acquire immovable property in Cyprus to obtain prior permission from the Council of Ministers. For the purposes of the law, the acquisition of immovable property includes:

  • the purchase of freehold property;
  • the grant or purchase of a lease of property for a period exceeding 33 years; and
  • the acquisition of shares in Cyprus companies which own immovable property on the island.

Following the end of a five-year transition period after Cyprus’s accession to the European Union, all remaining restrictions on the acquisition of property in Cyprus by citizens of other EU member states were removed with effect from May 1 2009. Citizens of other EU member states, and companies registered and based in EU member states (regardless of the nationality of their shareholders), may now acquire immovable property in Cyprus on the same terms as Cypriots.

Non-EU citizens and companies incorporated outside the European Union still require permission, but this is generally a formality. It may take a year or so for the formal permit to be issued, but the buyer is entitled to occupy the property in the meantime.

How are rights, encumbrances and other interests over real estate prioritised?

Rights, encumbrances and other interests must be registered with the appropriate district lands office register and the priority is fixed in accordance with the filing date of each right, encumbrance or charge.

Registration

Must real estate rights, interests and transactions be registered in your jurisdiction? What are the legal effects of registration?

There is no legal obligation to register rights or interests over immovable property, but if they are not registered, they will be unsecured. For example, under the Sale of Immovable Property (Specific Performance) Law (81(I)/2011), a purchaser of immovable property may secure the remedy of specific performance by depositing a duly stamped copy of the contract at the Land Registry within six months from the date of its execution, thus preventing the vendor from transferring the property elsewhere or charging it for as long as the contract is valid and legally effective. If the vendor subsequently refuses to transfer the property, the purchaser may apply to the court for an order to transfer the property.

What are the procedural and documentary requirements for entry into the national real estate register(s)? Can registration be completed electronically?

Registration can be completed physically, either in person or through a practising lawyer or a representative holding a valid power of attorney.

The person seeking registration must present adequate evidence of identity or a full original set of corporate documents in the event that the applicant is a corporate entity. In addition, the relevant form must be filed together with the appropriate supporting documents, such as the sale agreement or mortgage documents.

What information is recorded in the national real estate register(s) and to what extent is such information publicly available?

The information which is publicly available relates only to the immovable property itself. Although the register also contains details of the registered owner, method and date of acquisition, purchase price (if it was acquired through purchase), encumbrances and rights over the property, this information is disclosed only to parties having an interest in the property.

Is there a state guarantee of title?

No. The holder of a title deed is prima facie the registered owner of the property, but only an extract from the registry can verify this.

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