A new legislative proposal aimed at resolving the long-standing issue of trapped property buyers in Cyprus has emerged, but it appears to be a half-baked solution that only addresses part of the problem, and many thousands of buyers will remain trapped.
Figures you’ll see news headlines along the lines of ‘Solution for 50% of trapped buyers’ are somewhat exaggerated.
And this proposal does not include around potentially 15,000 buyers who are trapped by serious planning violations. Even assuming 5,000 cases have been resolved in the last three years, the proposed solution will only untrap 13% of trapped buyers.
For the benefit if new readers I’ll start by explaining the situation.
The Cyprus Trapped Buyers property crisis
In Cyprus, thousands of individuals bought property – often off-plan – and paid in full but never received title deeds. This happened because developers had mortgages and other debts, which they failed to repay.
In many cases, banks held claims over the land even after the buyers had paid in full, leaving the buyers without legal ownership.
A law passed in 2015 tried to fix this by allowing title deeds to be issued directly to buyers, bypassing developers’ debts. However, in 2023, the Court of Appeal ruled this law unconstitutional, leaving 9,497 buyers trapped once again.
Without title deeds, trapped buyers cannot sell or mortgage their homes. The issue has become one of Cyprus’ most pressing property rights problems, drawing criticism both domestically and internationally – particularly from foreign nationals who bought holiday homes or retirement properties on the island.
Planning violations
There are also an unknown number of property buyers who cannot get title deeds because of planning violations due to developers failing to comply with plans and permits authorised for the construction of their developments.
In 2022, Interior Minister Nicos Nouris reported that as many as 15,000 properties were waiting for planning approval and noted “However, a large number of these buildings cannot be granted a title deed (because of planning violations) and perhaps the only remedy would be their demolition.”
In October 2024, the government introduced an Urban Planning Amnesty Scheme. This enabled property owners with minor planning violations such as pergolas, enclosed verandas, or slight deviations from approved plans, to legalise these violations by paying fines ranging from €300 to €3,000. However, this amnesty does not cover major planning violations like additional floors, etc.
As of mid-March, 948 applications had been submitted of which 89% were for legalising violations to residential buildings. The scheme is set to close 23 June 2025.
To confuse matters further, the government has started calling these buyers “trapped” too, blurring lines between two very different causes of the crisis.
Planning violations transfer amnesty
Owners of properties issued with ‘Certificates of Unauthorised Works‘ due to major planning violations are banned by law from transferring the property.
However in its infinite wisdom, the government introduced a temporary amnesty, which ran from 14th April 2021 to 31st December 2021. This allowed owners of properties with major planning violations to transfer them. During the amnesty nearly 13,000 property transfers took place.
The government’s motive for introducing this temporary amnesty is open to speculation.
One unscrupulous property developer managed to offload one of these properties onto an unsuspecting buyer. I suspect there may be thousands of buyers who were very happy to receive title deeds, blissfully unaware that they cannot sell, mortgage, or transfer their property and remain trapped.
Who’s to blame?
The short answer: everyone. The mess stems from ineffective property laws, reckless banking practices (remember the damning PIMCO audit?), sloppy oversight and supervision of construction projects, lack of legal accountability for planning violations, and lawyers who failed to protect the interests of those buying property. The system failed buyers at every turn.
What is a Title Deed and why is it vital?
A property title deed is a legal document that proves ownership of a property. It typically includes:
- The name of the legal owner(s)
- A description of the property (such as its location, size, and boundaries)
- Details of any rights or restrictions associated with the property (e.g. easements, mortgages, or liens)
In essence, holding a title deed means you own the property and have full legal rights over it, you can sell it, transfer it, mortgage it, or pass it on through inheritance.
Without a title deed, even if you’ve paid for the property, you do not legally own the property – which is the central issue facing Cyprus’ trapped buyers.
The new trapped buyers’ legislative proposal
Some details of the proposal were revealed in Stockwatch yesterday. If all goes according to plan, the bill will be tabled before Parliament on Thursday 8th May.
The proposal does not apply to the many thousands of property buyers trapped by serious planning violations.
How many trapped buyers are there?
According to Interior Minister Constantinos Ioannou, the total number of “trapped” property buyers burdened by debts stands at 9,497, all of whom were unable to obtain title deeds under the now-unconstitutional law.
Approximately 57% of trapped buyers’ cases (5,417) remain unresolved, pending further clarification on whether separate title deeds can be issued for their respective units.
Of the remaining 4,080 cases, a potential solution has been identified for approximately 2,500.
These 2,500 cases relate to buyers whose properties were burdened after their contract of sale was lodged at the Land Registry
And the potential solution?
For properties 5,417 that were burdened before the trapped buyer’s contract sale was lodged, buyers can proceed if the party that placed the burden agrees.
If the party that placed the burden (likely a bank or creditor) agrees to release it within 60 days, the buyer can finally get their title deed. If not — tough luck?
Seriously? that’s the plan?
It’s hard to believe it’s taken this long to devise this potential solution, which only resolves a relatively small number of cases.
What if the party that placed the burden doesn’t play ball?
What steps is the government going to take to ensure all trapped buyers get title deeds to the properties they’ve bought and paid for in full?
The bottom line
Unless the Cyprus government tackles all aspects of the trapped buyers’ crisis — developer debt, planning violations, ineffective laws, and legal accountability — this proposal is just another sticking plaster on the gaping wound of a system that’s totally unfit for purpose!
