The land registry has suspended procedures relating to so-called trapped property buyers after a court ruled that the law designed to help them obtain title deeds clashed with the constitution.
The law aimed to sort out the mess created by the failure to issue title deeds to people who paid for their property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.
Since developers’ land and buildings are counted as assets that need to be offset against their debt to banks, this gave lenders a claim on people’s properties that had been mortgaged by developers.
The 2015 law grants the head of the land registry the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.
The bill had been contested by banks from the onset and a Paphos district court upheld their position two weeks ago that the power given to the head of the land registry was unlawful.
The appeal was filed by Alpha Bank against a Paphos developer and a British couple.
The court said the law violated Article 26 of the constitution, which affords individuals the right to enter freely into any contract.
It also said lawmakers have no right to intervene in contracts that preceded the law.
“The court understands the difficult position the buyers are in. But, possibly a different arrangement can be found. Not by bypassing the lender,” the court decision said.
Akel MP Aristos Damianou, whose party backed the government bill, on Tuesday said the court decision led the land registry to suspend the procedure of issuing title deeds.
Damianou said his party has already tabled the matter for discussion before the legal affairs committee in a bid to find a solution. He also took a shot at the government.
“What worries us is the resounding silence of the Anastasiades-Disy government, which is unfortunately displaying heartlessness in this matter too,” Damianou said.
Head of the land registry Andreas Socratous told the Cyprus Mail that a meeting with the attorney-general has been scheduled early next week to discuss the developments.