In Cyprus, transferring property rights through an Assignment Agreement is a well-established method used when the property’s title deed has not yet been registered in the name of the original buyer (the assignor). This type of agreement is especially relevant in cases involving off-plan developments, properties still under construction, or re-sales of investment properties prior to final title issuance.
Legal Framework Governing Assignments
Several pieces of legislation regulate the assignment of property-related contractual rights in Cyprus:
1. The Contract Law, Cap. 149
This statute provides the general rules for contractual relationships and permits the transfer (assignment) of rights and obligations from one party to another, provided the relevant legal conditions are satisfied.
2. The Sale of Immovable Property (Specific Performance) Law, No. 81(I)/2011
This law allows a purchaser to secure their contractual interest by registering the Sale Agreement with the Department of Lands and Surveys, making the agreement enforceable against third parties and enabling its assignment to another buyer.
3. The Transfer and Mortgage of Immovable Properties Law (Cap. 224, as amended)
This law regulates property transfers in general. However, in cases of assignment, the transaction pertains to contractual rights rather than full ownership and does not trigger a formal title transfer until the title deed is officially issued.
Common Scenarios for Assignment
Assignment Agreements are commonly used in the following situations:
- An individual (assignor) who has entered into a Sale Agreement with a property developer or seller wishes to pass their rights and obligations under that contract to a new party (assignee).
- The property’s legal ownership still rests with the developer or seller, as the title deed has not yet been finalized.
- The incoming buyer (assignee) agrees to assume all remaining responsibilities and entitlements under the original agreement.
- For the assignment to be effective, the original Sale Agreement must have been duly stamped and registered with the Land Registry.
Formalities and Registration Requirements
To give legal effect to an Assignment Agreement in Cyprus, the following steps must be followed:
- The agreement must be in written form and signed by both assignor and assignee.
- It should be stamped at the Tax Department, based on the consideration (value) of the transfer.
- The documents must be filed with the Land Registry, including:
- A copy of the original, stamped Sale Agreement.
- A signed declaration from both parties.
- Any supporting identification or documentation required by the authorities.
Once the documents are filed, the Land Registry updates its records to reflect the assignee’s legal standing under the original Sale Agreement.
Duties and Responsibilities of the Assignor
The assignor (original purchaser) must comply with several key obligations:
- Transparency: Disclose all material terms of the original sale, including payments made, timelines, and any encumbrances or issues affecting the property.
- Documentation: Provide the assignee with the original Sale Agreement, payment receipts, and any relevant communication with the seller or developer.
- Formal Declaration: Sign a statement confirming the transfer of contractual rights to the assignee.
- Good Faith: Act with honesty and ensure there is no concealment or misrepresentation of important facts.