Assignment Agreements in Property Transfers in Cyprus
An assignment agreement is a type of agreement between two parties where one party has a legal right, usually emanating from a Contract, while the other party wishes to obtain this legal right, usually by buying it. The party that assigns the right to the other party is called “the assignor”, whereas the party that obtains the right conferred is called the “assignee”.
Assignment agreements are concluded on many occasions such as in the case where a person assigns benefits from a life insurance policy to another person or the Bank in order to receive a loan.
This article focuses on assignment agreements concluded between two parties as a way to transfer rights of ownership of property in the Republic of Cyprus. The main reason for the two parties to choose to transfer property by assignment agreement is the absence of an issued separate title deed. Especially when a property is newly – built, under construction, or there is a purchase of a property off-plan (before a structure has been constructed on it), no title deeds exist for this kind of property.
The issuance of a separate title deed is a lengthy and time–consuming process, characterized by bureaucracy, that sometimes may take a few years to be completed. Consequently, an apartment, a house, or a villa that is recently built or under construction is highly unlikely to have a separate title deed. Alternatively, there may be some legal or technical issue hindering the issuance of a separate title deed. In both circumstances, a purchaser of a property that wishes for any reason to sell the property not still registered in his/her name has to assign his/her rights to the property. The consent of the former Seller and/or developer is not necessary for the conclusion of an assignment agreement. Nonetheless, there is a fundamental prerequisite for a person to assign property rights to another person.
According to the Law for the Sale of Property (Specific Performance) (81 (I) /2011), the only way for a person to obtain rights on a property is through the timely submission of a Contract of Sale in the Land Registry. The timely submission of a Contract of Sale is within 6 months from the date of signature of the Contract. Unless the Contract of Sale of a property is submitted within the deadline, the Land Registry will not accept any subsequent submission of an assignment agreement. As the rights to a property in the Republic of Cyprus can only be obtained with the submission of a Contract of Sale, a person can only successfully assign property rights emanating from the initial Contract of Sale. By the assignment agreement, the assignor (previous buyer) assigns all his/her rights to the property, deriving from the Contract of Sale, to the Assignee. Thus, the assignee takes the place of the assignor in the initial Contract of Sale and is entitled to ask the initial Seller of the property to transfer the property once a separate title deed is issued.
The assignee is obligated to submit the assignment agreement to the Land Registry of the District in which the property is situated within 6 months from the date of signature of the assignment agreement. Unless the assignment agreement is lodged with the Land Registry in time, the assignee will not have any rights to the property, thus it is paramount that the assignee submits the assignment agreement to the Land Registry as soon as possible.
Our Cyprus law firm is able to provide a wide range of services regarding property-related matters and the sale and purchase of real estate in Cyprus. Our experienced Cyprus lawyers can provide any necessary guidance, assistance, and advice concerning all stages of a transfer of property by assignment agreement while ensuring that your legal rights on the property are protected.
