The conclusion and signing of a Sale and Purchase Agreement (SPA), when purchasing a property, is recommended in cases where the property has no title, for example when it is under construction or if there are financial and other pending issues that postpone the transfer of the property to the buyer to a future date. In other cases, it is recommended that buyers transfer the title to the property directly in their name, in which case a PPA is not necessary.
If you agree to purchase a property and sign a Contract of Sale, then, after you have it on paper, file it with the Department of Cadastre and Land Surveying (DCS) as soon as possible and no later than six (6) months from the date of signing. Upon filing the PPA, the provisions of the Sale of Real Estate (Special Performance) Law, No. 81(I)/2011, are activated, which are intended to protect you in the event that the seller fails to meet his contractual obligations set out in the PPA.
If you have purchased a property with a sales deed, you are required to file it directly with the TCA, for the following reasons:
[*]Upon filing your own PIOE, a subsequent PIOE filing with the TCA for the same unit/property by another person cannot be accepted. [*]In cases where the seller refuses and/or fails to implement his contractual obligations, as a buyer, you have the right to apply to the Court for a Court Order to register the property in your name, or for compensation (right of specific performance of the Sale Deed). [*]You have the right to assign, as an assignor, your rights and obligations set out in the Deed of Sale to a third party (transferee), without the seller's written consent being necessary. That is, you can donate or sell your rights/obligations as a purchaser to another person. The "assignment agreement" is filed with the TCX by the parties, i.e. the assignor and the transferee, within six (6) months of its signing, together with the submission of a certificate of settlement of the assignor's capital gains tax from the Department of Internal Revenue. [*]If you have secured financing for the purchase of the property, you have the right to assign to your lender the rights arising from the PPA. That is, you are facilitating your loan by charging the POE for the benefit of your lender. [*]If you are purchasing a unit in a residential development, you gain the right to know the rate (percentage) of your unit's value relative to the total value of the entire development. The seller, after obtaining planning permission, is required to determine the factor of value of each building section or land being subdivided and submit it to the TCX so that the buyer knows in advance the factor of value of the unit he/she is buying. The portion of the mortgage debt attributable to the buyer is determined by the value factor of each property relative to the total value of the entire mortgaged property. If the property, is subject to a prior mortgage, you have the right to pay the "mortgage debt" attributable to you, according to the value factor, to the mortgage lender directly, i.e. to the financial institution and not to the seller. Provided that you pay the above amount and in the event that the mortgage lender refuses to release the property from the mortgage, then you can proceed with an application to the Court for a special execution order to register the property in your name, ignoring the mortgage which precedes the Sale Agreement (SPA). [*]The filing of the PIOE creates an encumbrance (encumbrance in rem) against the immovable property, which follows the order of priority with respect to other encumbrances in rem, according to the date of its filing. [*]If you do not file the PIOE with the TCA within six (6) months from the date of its signature, then upon transfer of the real property in your name, you will be required to pay the transfer fees increased by ten percent (10%).
(NΓ/EXP)
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