Important provisions about Property Assignment contracts came into force with the New law 81(I)/2011 replacing the Sale of Land (Specific Performance Law) Cap. 232.
The Sale of Immovable Property (Specific Performance)’ Law of 2011 (Law 81(I)/2011), which came into force earlier this year, contains important provisions about “assignment contracts” which may, if properly utilised, solve the problem of resales where an up-to-date title does not exist.
Under the new Law any purchaser of property may assign his rights and/or obligations under the contract to an assignee, either gratis, or by the payment of an amount of money. This “assignment contract” can be concluded without the agreement of the original vendor (usually a property developer) and can be deposited at the Land Registry within six months of its signing, provided the original contract has already been deposited at the same Land Registry Office.
The “assignment contract” has, in effect, the same legal status as the original contract. It is binding on the original vendor and its depositing at the Land Registry offers the same protection to the assignee as that provided by the Law to the original purchaser.
Thus, if the original vendor (e.g. property developer) fails to fulfil his obligations by issuing and transferring an up to date title in the name of the assignee, the latter may apply to the Court and obtain an order for the Specific Performance of the contract. The Court may:
a. order the transferring of the title in the name of the assignee and, when a title does not exist;
b. order that all necessary actions be taken so that the title is issued.
The new procedure has several important advantages over the procedure of cancellation agreements:
a. It is an absolutely lawful procedure, so no question of tax evasion or other illegality arises.
b. The original vendor/ developer is not involved. Therefore his consent is not required and no question of payment of “contract cancellation fees” or any other amount of money to him arises.
c. The new purchaser/assignee has the full protection of the new Specific Performance Law.The new procedure is beneficial to both prospective vendors and prospective buyers of resale properties and it is expected to help the resale market in Cyprus.