The government is on the right track to be able to solve problems faced by Cyprus’ estimated 9,497 “trapped buyers”, interior ministry permanent secretary Elikkos Elia said on Wednesday.

Speaking after a meeting of the ad hoc working group on “trapped buyers”, he said he hopes that new amendments would be made to the relevant legislation to allow the land registry to resume examining applications for title deeds submitted by them.

“Trapped buyers” is the term given to the thousands of property owners in Cyprus who bought real estate in full but were then unable to obtain title deeds because they were ‘trapped’ by outstanding mortgages on the property either by the developer or a previous owner.

Elia said that of the 9,497 such cases of which the government was aware last year, and that of that number, 5,417 still have no title deed, with their applications pending until the authorities can clarify whether their issuing would be legal or not.

This issue arose after an appeals court decision in June found that part of a law passed in 2015 to facilitate trapped buyers’ obtaining of title deeds was in part illegal as the land registry has no right to transfer the title deeds of mortgaged properties, as this would cause lenders – the banks – to incur unrecoverable losses.

After this ruling, Elia said, “the land registry essentially stopped examining applications submitted by trapped buyers”.

However, he said, both the interior ministry and the land registry have since made efforts to find solutions, with the eventual aim of finding the 2015 law to be constitutionally valid.

He added that as such, a text was prepared at Wednesday’s ad hoc meeting, with the aim of submitting it to parliament “to begin the discussion and proceed with amending the legislation”.

Asked whether the banks have shown willing to continue suspending foreclosures on trapped buyers’ properties while work continues on the legislation, he said they have offered a “renewed commitment”, and that this “satisfies us very much”.

House interior committee chairman and Akel MP Aristos Damianou described the matter as a “particularly complex legal issue”, and said the interior ministry has put forth “about 10 proposals” to solve it.

“The logic is, provided that it is documented that the buyer, in good faith, has fulfilled their financial obligations and to the extent that the consent of the lenders is required, can initially proceed to secure a transfer of the deeds to their own name,” he said.

He added that the goal is to find a law on the matter which “will not be challenged in court again, either by banks or by credit acquisition companies”.

House legal committee member and Diko MP Panikos Leonidou also described the matter as “a very difficult issue, a complex and legally ambiguous one, if you like”.

He added that a solution is “very close”, and that while the ad hoc committee and the current initiatives in this direction may not solve the problem completely, “it seems that we can find a solution, provided that each side will act in good faith”.

“The dominant issue in the entire discussion is to determine who are the bona fide people and protect them. The goal of the legislator is not to protect people acting in bad faith, but to protect the bona fide people who made some arrangements which did not pan out and were left exposed,” he said.

To this end, he called for the creation of a provision to clearly define what “good faith” means, so that should a buyer or a lender find themselves on the right side of the letter of the law but be seen to be acting in bad faith, the matter can be challenged in court.

“We are trying to create a law which will solve the problems in a fair way,” he said.