Cyprus Mail
Property

Withdrawal of a sale contract

The plot is in a Nicosia village

THE deposition of a sale contract at the Land Registry creates an estate in land over the immovable property subject matter of the sale and where a part of it is sold, it burdens the whole immovable property until the issue of a separate title deed. The estate in land created ranks in priority according to the date of its deposition and remains valid until the cancellation or the withdrawal of the sale contract or its deletion from the Land Registry.

The person entitled to withdraw a sale contract from the Land Registry is the purchaser or his representative having expressed authorisation to do so. Any reference in the sale contract for its cancellation in the event its terms are not fulfilled does not give the vendor the right to withdraw it or claim its deletion from the registry.

Even the submission of letters exchanged between the parties indicating its cancellation or that the purchaser was called to appear before the Land Registry to withdraw it but he hasn’t done so does not entitle the vendor to claim its withdrawal without the written consent of the purchaser. Where the purchaser does not co-operate, the vendor’s only option is to apply to court to obtain an order for the withdrawal and the deletion of the sale contract, making the purchaser liable to pay damages.

The Supreme Court in a judgment issued on 19.5.2017 dealt with the aforesaid matter by examining an appeal filed against the judgment of the Court of First Instance, dismissing the action of the vendors instituted against the Director of the Land Registry claiming damages because of his refusal to accept the withdrawal of a sale contract affecting their property.

The vendors sold their property to a company under a sale contract, which was deposited at the Land Registry and included a term to the effect that if the relevant town planning and/or building permits were not obtained up to a certain date, the sale contract would become void.

At the same time, the company undertook the obligation to sign and give the vendors an irrevocable special power of attorney authorising them to withdraw the sale contract from the Land Registry. The persons acting on behalf of the company, signed both the sale contract and the power of attorney, giving authority to a third person. However, the company did not authorise them to sign in this respect, but they were only authorised to sign the sale contract and to deposit it at the Land Registry.

Prior to the date set out in the sale contract for its cancellation, the company called the vendors to appear before the Land Registry and transfer the property to them, but the vendors did not do so. Afterwards, the person appearing to be the representative the company under the power of attorney visited the Land Registry to withdraw the sale contract but the director refused, since no document was submitted proving the company had authorised its withdrawal.

The vendors, after the second sale had been cancelled, filed an action against the Republic claiming damages under the Constitution, but the court of first instance held that the Director’s refusal was not illegal or unjust. The Supreme Court upheld the decision, stating that it was self-evident that the director had a duty to examine whether the power of attorney was well founded, whether the person signing it was duly authorised and the actions he was authorised to carry out.

It concluded that the authorisation given by the company to the persons who signed the power of attorney included every act to complete the purchase of the property and the deposition of the sale contract at the Land Registry, but the company did not authorise its cancellation or withdrawal. Hence, the Supreme Court dismissed the appeal.

 

George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected]www.coucounislaw.com

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