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Sale Of Mortgaged Property In Cyprus

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Information on the sale of mortgaged Cyprus property

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Requirements – Procedure

Any mortgagee may initiate the procedure of sale of the mortgaged property to recover the mortgage debt upon filing an application for the sale of such property if one month after the date agreed for the satisfaction of the debt secured by the mortgage, the mortgagor makes default of payment and fails to comply with the terms of the contract of mortgage. Such procedure begins with the service of a written notice (Form Ν.275) by the mortgagee upon the mortgagor requesting him to settle the debt within one month and advising him that in case default he shall apply to the Director of the Department of Lands & Surveys requesting the sale of the mortgaged property.

Such notices may be obtained from any District Lands Office (Form N.275) and must always be accompanied by a statement of account for the mortgage debt. If one month from the service of the said notice (Form N.275) upon the mortgagor, the latter has failed to pay the mortgage debt, the mortgagee shall file an application for the sale of the said property with the Lands Office of the District where the property is situated.

Documents attached to an application for sale of immovable property

Application Form N.276. The particulars contained in the application must be certified by means of an affidavit. Such application is to be filed within seven (7) days from the date of the affidavit.

Copy of notice (Form N.275).

Copy of the statement of account.

Receipt by the Postal Services Department, where the notice was served by double registered post.

Certificate of mortgage (N.271) with any other additional document.

Certificate of registration of the property.

All prescribed fees are payable upon filing of the application.

From the time of acceptance of the application up until the sale of any immovable property, the Director of the Department has to:

Check all particulars contained in Application Form N.276, in Notice N.275, in the statement of account and in the notice served upon the defaulting mortgagor and any interest on arrears.

Inform all mortgagees (of all prior or subsequent mortgages) of the acceptance of such application.

Invite all mortgage creditors of prior mortgages to produce a sworn statement of account in respect of the mortgage debt.

Ascertain all fees, taxes and charges leviable on the properties proposed to be sold.

Determine the reserved price of sale of the properties concerned and notify such price to all interested parties.

Decide on all objections and determine a new reserved price of sale.

Determine the amount payable under the mortgage to the mortgagee who applied for sale of the property.

Determine the amount of all fees, taxes and expenses involved in the sale and invite the applicant/mortgagee to pay any such fees to the Department.

Notify his decision in relation to the said sale to all interested persons (the property must be sold 30 days after notification of such decision).

Cause all notices of sale to be posted up and inform all interested parties of the exact date, time and place of sale, the name of the auctioneer and give any other information or instructions as he may think fit.

Reserved price of sale

A reserved price of sale is fixed for any sale of immovable property by public auction. Such price shall be the lowest bid accepted as first bid for the sale of any such property. Where no bid has been made, which is equal to or higher than this amount, the sale is deemed to be abortive. The reserved price of sale is determined by the District Lands Officer in charge and initially cannot exceed the estimated value of the property;

It is then notified to the persons concerned who may, within three weeks from the date of the notice, to request its review, upon paying the relevant fees for a local research. The District Lands Officer determines then as a reserved price, the market value of the property, reduced by 10% and notifies his decision to the interested persons.

Fixing of the date of sale

After all notices have been sent and all fixed periods of time as specified in the Law and in the Rules of Sale have been complied with, the Director of the Department of Lands & Surveys shall fix the date of sale and notify this to all interested parties. He shall then prepare the notices of sale (Form N.70) and cause one copy to be sent to the auctioneer, one copy to be posted up in any place where notices are posted in the village or quarter where the property is situated. The place, date and time of such sale shall also be published in the local press.

All interested parties may apply to the Court and obtain an order of cancellation or alteration of any decision taken by the Director of the Department of Lands & Surveys.

The auctioneer shall proceed with the sale of the property at the date and time fixed by the Director unless:

The mortgagor or any other person appearing on behalf of the mortgagor pays to the auctioneer such amount for settlement of the debt and payment of all expenses of the intended sale prior to the commencement of the sale procedure.

The mortgagor or any other person appearing on the mortgagor's behalf at the procedure of sale of the property pays to the auctioneer an amount which together with the amount collected up until that moment settles the debt and pays all expenses of the intended sale.

Application of the Proceeds of Sale

The proceeds of the sale of immovable properties shall be applied in the order given hereinbelow for purposes of payment of:

All fees, charges and other expenses of the sale.

Any fee, tax, rate or duty which is a first charge on the immovable property sold in priority to any other charge thereon.

Any debt payable under a prior mortgage.

Any amount secured by the mortgage in favour of the mortgagee who applied for the sale of the property.

Any sum secured by any mortgage subsequent to the mortgage in favour of the mortgagee who applied for the sale.

Any claims and judgments (memos) etc., registered in order of the respective priorities of their registration.

Any balance payable to the mortgagor.

Source Department Of Land And Surveys

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