The director of the land registry notifies each affected person of his intention to transfer the property to the enclaved buyer
When examining an application by an enclaved purchaser, if the director of the land registry is satisfied that conditions are met, he notifies the buyer, seller, mortgagee and any person in whose favour an encumbrance or prohibition is in effect in writing of the intention to discharge, extinguish or cancel the mortgage, encumbrance or prohibition and transfer the property to the purchaser.
With the notice they are given 45 days to submit an objection. In the case of a documented objection, the director does not proceed with the transfer of the property, instead transferring of the property to him. The creditors of a mortgage or other encumbrance may request it be transferred to another property of the same vendor, instead of being cancelled.
For the director to send the notification of intent to transfer, the price must be paid in full and the property have a title deed. In addition, the application should relate to a contract deposited at the land registry by December 31, 2014, a contract deposited pursuant to a court order issued by December 31, 2021 or an application submitted pursuant to a court order issued in accordance with the Sale of Land (Specific Performance) Law 81(I)/2011 on an application submitted by December 31, 2022 for the purpose of transferring the property to the buyer.
The director’s notification is a safety net allowing those affected to take measures to protect their rights. A typical example is a decision by the supreme court dated June 30, 2022 when a mortgage creditor’s application was examined for the granting of leave to file an application for the issuance of a prerogative order certiorari. Specifically, a buyer of an apartment for which a separate title deed had been issued secured a court order allowing him to deposit a sale contract, without reference to the existence of two mortgages of the mortgage creditor that encumbered the seller’s plot and affected the title deed and without the application being served on the creditor to be heard.
The mortgage creditor, when notified, responded by filing the application seeking an order from the supreme court to set aside the order which allowed the late deposition of the sale contract at the land registry. He also requested stay of its validity and the procedure before the land registry regarding the application for the transfer until the hearing of the application for the issuance of the prerogative order certiorari. The two mortgages were granted by the seller but no amount had been paid and the mortgage creditor initiated auction proceedings. A date was set for auction but it was cancelled at the buyer’s request.
The mortgage creditor in the application alleged that: (a) the issuance of the court order was induced by fraud, deceit and/or conspiracy, since the purchaser in his affidavit for the granting of an interim order stated that no sale contract had been previously entered into and he was aware of the existence of the two mortgages and deliberately concealed it, (b) the trial court issued the order in violation of the rules of natural justice, and (c) exceptional circumstances exist and no other remedy is available to the mortgage creditor to set aside the court order.
The court was satisfied that a prima facie case was shown and that there did not appear to be any other remedy available since the order issued was a final decision, while the remedy of appeal was not open to him since he was not a party to the proceedings. The court also held that the facts of the case constituted exceptional circumstances and the granting of the requested leave is justified. The court gave leave to the creditor to file the application and suspended the validity of the order and the procedure before the land registry until the hearing of the application.
George Coucounis is a lawyer practising in Larnaca and the founder of George Coucounis LLC, Advocates & Legal Consultants, [email protected]