THE acquisition of an ownership right in land for a limited time period is possible through a long-term lease agreement for a term of 15 or more years. Upon being deposited at the Land Registry, the lessee acquires the right of specific performance until its registration in the Land Registry records, at which time an estate in land is created in his favour which ties upon the property for as long as the agreement remains in force. It is possible for the long-term lease mechanism to apply to a building under construction or one which will be constructed in the future or even of piece of land under division. In the latter case, the registration of the agreement with the Land Registry is not perfected until the issuance of the separate title deed of the property which will be leased.
However, the deposition of the agreement at the Land Registry is allowed, safeguarding the lessee’s rights and providing him with the right to both specific performance of the lease agreement and registration of the lease for his benefit. Upon registration, a relevant certificate is issued and the state in land created for the benefit of the lessee constitutes an asset, which may be transferred, sub-leased and mortgaged. Upon submission of a copy of the lease agreement within the deadline, the Land Registry issues a relevant certificate documenting that the agreement has been registered.
For the period of validity of the said registration, the right to specific performance remains applicable. However, no estate in land is created upon the leased property until the agreement is registered. The issue was examined by the Rent Control Court of Nicosia in a recent judgment, in which it was held that the terms of the long-term lease agreement in question filed with the Land Registry were governed by the Rent Control Law. The applicant was the registered owner of shares in an immovable property on which a shopping mall was constructed and he entered into a lease agreement for the said immovable property, which was not accepted by the Land Registry.
When the Land Registry examined the relevant application, it decided that the lease agreement could not be registered and did not register it upon the property, on the basis that the lessor was not the registered owner of the whole share of the said property. Another ground on which the lease of the shopping mall was not registered was that a division of the property which had preceded the application for the registration of the lease at the Land Registry. The co-owners signed a division agreement but the division process did not proceed.
Hence, the relevant lease documents were submitted to the Land Registry without the property being divided in any way. As per the judgment of the aforesaid court, when a separate title deed is issued in the future upon the division of the land where the shopping mall was built and provided the provisions of article 65B are met, then the lessee would be entitled to request the registration of the lease agreement.
The owner, being the applicant in the aforesaid case, terminated the agreement on the basis of rents in arrear owed to him by the lessee – respondent and called the lessee to deliver free and vacant possession of the premises. The respondent did not comply and did not pay the rents in arrear within the 21 days notice or at any time thereafter. The court held that under the circumstances a statutory tenancy was created and the lessee delayed the payment of the rents in arrear. Hence, it issued an order for the recovery of possession of the premises by the owner and a judgment against the lessee for the sum of the rents in arrear and means profits until the delivery of the premises to the owner.
George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected], www.coucounislaw.com