Interpretation of the law on specific performance
The changes made in the Sale of Immovable Property (Specific Performance) law serve to the maximum extent the buyer of a property who files his sale contract at the Land Registry. Despite the amendments which have occurred, there are still cases of buyers who have not taken advantage of the legislative possibility, even after the deadline, to file their sale purchase agreement in the Land Registry following a Court order.
The relevant provision of the law
According to the law, if the contract is in writing but has not been filed in accordance with the provisions of this law or the contract is oral, the court may order specific performance of when it deems this to be fair and reasonable as long as the rights of third parties resulting from prior encumbrances are not affected and it is satisfied that –
(a) the contract sufficiently specifies the identity of the contracting parties and the subject of the contract,
(b) there is an entry in the Land Registry of the competent District Land Registry Office, in the name of at least one of the sellers, which is the subject of the contract or which includes the part of the immovable property which is the subject of the contract.
The decision of the Court of Appeal
The Court of Appeal in its decision on 16.4.2024, in the appeal of the buyer who dismissed his claim for specific performance and awarded damages in his favour due to breach of contract, disagreed with the decision of the Court of First Instance which adopted a strict interpretation of the law.
The Court of Appeal considered that the law provides the possibility for a Court to allow the filing of a contract at any time upon a relevant application. With this in mind, the words “but it has not been filed in accordance with the provisions of this Law” leads the purpose of the legislator was to provide for those cases where the procedures have not been followed, empowering the court to order specific performance of a contract where it considers this to be just and reasonable.
And this discretion, as the Court of Appeal mentions seems to be granted.
Conclusion of the Court of Appeal
As the Court of Appeal mentions, the case under consideration is a classic case where it is fair and reasonable to order the specific performance of the contract of sale of the apartment and its registration in the name of the buyer.
Finding that the two conditions provided for are satisfied, the court added that a concern is raised by the memorandum filed on the property for tax obligations of the seller since the power provided for can only be exercised if the rights of third parties are not affected.
Since the buyer paid the purchase price of the apartment a long time ago, while he owns and has enjoyed this immovable property since 1984, and the seller has no right over the apartment, the Court of Appeal concluded that the discretion of the trial court should be brought in favour of the issuance of an order for specific performance of the sale agreement.
Order of transfer
The court ordered the first instance decision be set aside and replaced with an order ordering the seller to proceed with the registration of the apartment in the name of the buyer within 10 days from the date of receipt of notice that the memo of the Tax Department has been removed.
George Coucounis is a lawyer specialising in immovable property and he is the founder of George Coucounis LLC, based in Larnaca, coucounis.law@cytanet.com.cy, Tel:- 24 818288.