Specific Performance Law

Specific performance law in Cyprus is a legal provision that allows a court to enforce the terms of a contract, particularly in real estate transactions. It ensures that parties fulfil their contractual obligations, especially in property sales.

Details about The Sale of Immovable Property (Specific Performance) Law 81 (I) of 2011

The Sale of Immovable Property (Specific Performance) Law 81 (I) of 2011, effective August 1st, 2011, replaced previous legislation to better address the evolving complexities of the real estate market. Its key features include:

• It offered greater protection to buyers, particularly those who registered the Sale Contract in the Land Registry. This ensures the property's transfer to their name by the seller or through specific performance.
• It allowed the buyer to pay the mortgage debt directly to the financial institution rather than the seller, enabling the court to order specific performance free of mortgage burdens. The mortgage debt corresponding to the property is determined based on the value ratio of each property piece.
• Sellers must determine and deposit the value ratio of each property part in the Land Registry. This step is essential for exercising rights over a mortgaged property, and buyers are advised to ensure the existence of a planning permit before proceeding with a sale agreement.
• The law allowed Sale Contracts to take precedence over prior mortgages, subject to certain conditions.
• If contract implementation is impossible, the buyer's payments are protected by the priority of the Sale Contract encumbrance rather than the subsequent court decision.
• The law legalized the sale of parts of jointly owned property, provided there is an agreement among all joint owners.
• It introduced rules for assigning rights and obligations from an existing Sale Contract to a third party.
• It allowed buyers to use the Sale Contract as collateral for borrowing from financial institutions, enhancing their creditworthiness.