A LEGAL TURNING POINT: CYPRUS REFORM FOR “TRAPPED BUYERS”
For years now a legal paradox stood in place: people were buying property but were unable to obtain title deeds due to preexisting legal encumbrances on the property, thus placing the purchasers in a state of legal limbo and creating the phenomenon of the so-called “trapped buyers”. Trapped buyers have long represented a social and legal sore point in Cyprus. These, as we previously explained, are purchasers who fulfilled all contractual payment obligations and yet remained without legal ownership of the property, because it was burdened by mortgages, prohibitions, or other encumbrances.
The crisis crystalized after a Supreme Court Decision (Civil Appeal No. 285/2018) struck down the previous legislative scheme, specifically Articles 44ΙΘ – 44ΚΒ of the the Transfer and Mortgage of Immovable Property Laws, deeming them unconstitutional, as those provisions were contrary to Articles 23 (protection of property) and 26 (freedom of contract) of the Cyprus Constitution.
In response to this ruling and mounting social pressure, the Ministry of the Interior and Parliament’s Legal Committee formed a working group. Their goal: to draft a reform that restores protection to buyers, while respecting creditor rights.
At last, in July 2025, adhering to the decision in the Civil Appeal No. 285/2018, Cyprus took a decisive legal step to resolve this chronic problem in its real estate market. The introduction of Amendment Law 110(I)/2025, which modifies the Transfer and Mortgage of Immovable Property Laws of 1965, offers a constitutionally compliant framework to break the stalemate.
A key technical change is the amendment to Article 44IΘ, which provides an automatic suspension of any parallel legal proceedings, while a trapped- buyer application is being examined, which shields applicants from foreclosure, enforcement or insolvency steps that would otherwise frustrate their application. Thus, the reform tackles the core obstacle: pre-existing encumbrances. Transfers can now proceed either with written consent from mortgage lenders, or, where consent is unjustifiably withheld, through a court-ordered release of the encumbrance. The law also empowers the Director of the Land Registry to examine applications submitted before the law’s commencement, but only where issuance of a title deed is feasible, setting an operational timeframe of 2 years and 8 months upon commencement. Failure to comply with said timeframe can lead to rejection.
Overall, Law 110(I)/2025 offers long-delayed clarity and a workable route to title-deed transfers for an estimated 9,500 affected purchasers, restoring confidence and stability to the Cyprus property market.
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