ΤΗΕ Director of the Land Registry, in the context of examining the application of an enclaved purchaser and if he is satisfied that the conditions are met, he notifies by written notification the buyer, the seller, the mortgagee and any person in whose favour an encumbrance or prohibition is in effect, of his intention to discharge, extinguish or cancel the mortgage, encumbrance or prohibition and transfer the property to the name of the purchaser. With the notice he informs them that they may within 45 days of receipt of the notice submit to him an objection that the buyer’s contractual obligations towards the seller have not been fully fulfilled or that the contract between the seller and the buyer is void and/or has been terminated by an order of the Court. The Director, in the case of a documented objection, does not proceed with the transfer of the property to the purchaser, while on the contrary he proceeds with the transfer of the property to him. The creditors of a mortgage or any other encumbrance may request that the mortgage, encumbrance or restriction be transferred to another immovable property of the same vendor, instead of being discharged, extinguished or cancelled.

The conditions for the Director’s examination of an AEA application and sending the notification of intent to transfer the property are simple, that the sale price has been paid in full and that there is a title deed of the property. In addition, the application should relate to a contract that has been deposited at the Land Registry until 31.12.2014 or the contract was deposited pursuant to a Court order issued by 31.12.2021 or the application must be submitted pursuant to a Court order issued in accordance with the Sale of Land (Specific Performance) Law 81(I)/2011 on an application submitted to the Court until 31.12.2022 for the purpose of transferring the property to the buyer.

The Director’s written notification is a safety net since all interested persons are informed so that, to the extent they are affected, they can take measures to protect their rights. A typical example is the decision of the Supreme Court dated 30.6.2022 when a mortgage creditor’s application was examined for the granting of leave to file an application for the issuance of a prerogative order certiorari. Specifically, a buyer of an apartment for which a separate title deed had been issued secured a Court order allowing him to deposit a sale contract, without reference to the existence of the two mortgages of the mortgage creditor that encumbered the seller’s plot and affected the title deed of the apartment and without the application being served on the creditor to be heard.

The mortgage creditor, after having been notified by the Director, responded by filing the application seeking an order of the Supreme Court to set aside the order which allowed the late deposition of the sale contract at the Land Registry. He also requested stay of the validity of the order and of the procedure before the Land Registry regarding the application for the transfer of the apartment to the buyer, until the hearing of the application for the issuance of the prerogative order certiorari. The two mortgages were granted by the seller but no amount had been paid and the mortgage creditor initiated auction proceedings. An auction date was set but the auction was cancelled at the buyer’s request.

The mortgage creditor in its application alleged that: (a) the issuance of the Court order was induced by pure and manifest fraud and/or deceit and/or perjury and/or conspiracy, since the purchaser in his affidavit for the granting of an interim order stated that no sale contract had been previously entered into for the apartment in question and that he was aware of the existence of the two mortgages of the creditor and deliberately concealed it from the Court, (b) the trial Court issued the order in violation of the rules of natural justice, and (c) exceptional circumstances exist and no other remedy is available to the mortgage creditor to cancel and/or set aside the Court order.

The Court was satisfied that a prima facie case was shown and a serious issue to be examined on the grounds pleaded by the mortgage creditor. It added that there does not appear to be any other remedy available to the creditor since the order issued is a final decision and not an interim one, while the remedy of appeal is not open to him since he was not a party to the proceedings. The Court also held that the facts of the case constitute exceptional circumstances and the granting of the requested leave is justified. For these reasons, the Court gave leave to the creditor to file the application for the issuance of the requested certiorari and suspended the validity of the order and the procedure before the Land Registry until the hearing of the application for the issuance of the prerogative order certiorari.