Specific performance — the remedy compelling a party to fulfill their contractual obligations — sits at the intersection of law and conscience. In Cyprus, it draws life from both equity and statute, most notably through the Sale of Immovable Property (Specific Performance) Law of 2011 (Law 81(I)/2011). Understanding the remedy’s role, limitations, and procedural requirements is essential, particularly in the real estate sector, where monetary damages may fall far short of justice.
The Origins: Equity as a Shield and a Sword
Cyprus’ legal tradition — rooted in both common law and equity — allows for remedies beyond compensatory damages where fairness demands it. Specific performance was historically available only under the principles of equity: a court order directing a party to carry out their part of a contract when damages would not suffice.
The rationale is moral. The law assumes that when someone promises to transfer a house, money won’t necessarily replace it — especially in a market of limited availability, emotional attachment, or unique positioning.
Under English legal influence, equity was imported into Cyprus judicially and later codified under Article 29 of the Courts of Justice Law, Cap.14/1960, which allows Cypriot courts to apply equitable doctrines. This includes specific performance, constructive trusts, and proprietary estoppel.
The Statutory Framework: Law 81(I)/2011 and Beyond
Before 2011, specific performance of real estate agreements fell under Cap. 232, which proved inadequate. The 2011 law, as amended by 28(I)/2012, 48(I)/2017, and most recently 132(I)/2023, introduced a robust legal mechanism.
Key elements of the 2011 law include:
- Depositing the contract: Under Article 3, no clause in a contract can prevent its deposit with the Land Registry. Either party can deposit the sale agreement — a prerequisite for invoking specific performance.
- Limitation period: A claim must be filed within the statutory limitation period for breach of contract (Article 6(1)). However, the court may still allow a claim under Article 6(2) if it is “just and reasonable,” even for oral or unregistered agreements, provided third-party rights are unaffected.
- Consequences of delay: Under Article 9, even after securing a decree of specific performance, the successful party must act within 12 months to register the sale, or risk losing the benefit — unless the court extends the deadline.
- Assignment agreements: Articles 11 and 12 provide for the registration and enforceability of assigned sale contracts and further permit judicial latitude to allow late deposits in the buyer’s interest.
The 2023 Amendment: Strengthening Buyer Protection
Published on 12 December 2023, the Sale of Immovable Property (Specific Performance) (Amendment) Law of 2023 introduces a new mechanism specifically targeting transactions involving properties encumbered by registered mortgages or existing contracts.
Where the property is already burdened, the filing of the sale contract now requires accompanying written declarations in prescribed forms:
- Form A: A joint declaration by the seller and the mortgagee stating that upon deposit of 95% of the sale price, the mortgagee will release the encumbrance and issue Form B (a payment certificate). If the mortgagee fails to do so, Form B itself — duly signed and sealed — authorizes the Director of the Land Registry to transfer the property directly to the buyer.
- Form C: Alternatively, the buyer may acknowledge the existence of the encumbrance and declare a willingness to proceed without the protections of Form A.
While the introduction of Forms A, B, and C is a welcome step toward transparency and security, the amendment is not without ambiguity. The forms refer explicitly to mortgages, leaving uncertainty around other burdens like prior contract filings. Additionally, the standard wording may not easily accommodate land plots, co-ownership structures, or complex contract types such as exchanges or assignments.
Nevertheless, the amendment aims to guarantee a buyer’s right to registration where the purchase price has been paid, and the only barrier is a pre-existing charge. Its success will depend on judicial interpretation and how Land Registries implement these powers in practice.
Equity in Action: Judicial Discretion and Key Cases
While the statute gives structure, equity retains influence. The courts will not award specific performance in every case — it remains a discretionary remedy.
Cypriot jurisprudence reflects this:
- In Chacalli v. Koullouren (1895), the court denied specific performance where statutory consent for land sale (arazi mirie) had not been obtained. Damages were granted, but equity could not be stretched to enforce an invalid transfer.
- By contrast, in Christos Klirides (Executor of Petroullas Rousou) v. Herodotos Stavrides (1998), the Supreme Court recognized a constructive trust in favor of a cohabiting partner. While not a typical specific performance case, it shows the willingness of the court to compel property transfer based on equitable principles, particularly where injustice would otherwise result.
- In Stylianou v. Papacleovoulou, a mistaken conveyance led to extensive improvements by the buyers. The court, invoking proprietary estoppel, ordered rectification and refused to allow the sellers to reclaim the improved land — equity demanded enforcement of the buyers’ expectations.
These cases affirm that equity — whether through specific performance, constructive trust, or estoppel — will intervene where a rigid application of law would offend justice.
Conclusion
Specific performance in Cyprus is not simply a technical remedy. It is a declaration that certain promises matter enough for the court to enforce them exactly as made. When applied correctly, it affirms the sanctity of agreements, the reliability of transactions, and the power of equity to rectify injustice.
The 2023 legislative reform strengthens the mechanism, particularly for buyers dealing with encumbered property — providing a statutory “shortcut” where obligations are fulfilled but encumbrances persist. It marks a serious shift toward a buyer-centric approach, although further refinements and judicial guidance will be necessary to clarify its full application.
At Phoebus, Christos Clerides & Associates LLC, we regularly advise buyers, sellers, developers, and financial institutions on the evolving legal framework surrounding immovable property transactions. We remain committed to delivering strategic, practical guidance where law and fairness intersect — especially when specific performance is not just the right remedy, but the only just one.