A.C. Hadjioannou & Co Law Firm ELECTRONIC COMMUNICATIONS PRIVACY, DATA RETENTION AND DATA PROTECTION IN THE ELECTRONIC COMMUNICATIONS SECTOR

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1 A.C. Hadjioannou & Co Law Firm ELECTRONIC COMMUNICATIONS PRIVACY, DATA RETENTION AND DATA PROTECTION IN THE ELECTRONIC COMMUNICATIONS SECTOR LAND LAW (immovable property law, Cyprus land registry, private ownership, restrictions, acquisitive prescription, trusts registration, etc)

2 CONTENTS Editor-in-chief: Geena Papantonopoulou Editor: Marina Tsikouri Business development managers: Georgia Siakandari Juliana Berberi Art Director: Theodoros Mastrogiannis Creative Director: Andreas Menounos Desktop Publishing Films: Yannis Dedousis CYPRUS LAW DIGEST ISSN Χ NOMIKI BIBLIOTHIKI SA, 2012 COPYRIGHT The content of this Guide is copyright of NOMIKI BIBLIOTHIKI S.A. Copying of part or all of the content of the Guide in any form is prohibited other than that in accordance with the following permission: a) you may copy pages from the Guide for your personal use only, b) you may recopy extracts from the Guide to indi vidual third parties for their personal information, but only if there is acknowledgment to NOMIKI BIBLIOTHIKI S.A. as the copyright owner of the Guide. DISCLAIMER The content of this Guide is intended for information purposes only and should not be treated as legal advice. The publication is necessarily of a general nature; NOMIKI BIBLIOTHIKI S.A. makes no claim as to the comprehensiveness or accuracy of the Information provided; Information is not offered for the purpose of providing individualized legal advice. Professional advice should therefore be sought before any action is undertaken based on this publication. Use of this Guide does not create an attorney-client or any other relationship between the user and NOMIKI BIBLIOTHIKI S.A. or the legal professionals contributing to this publication. 23, Mavromichali Str., Athens Greece Tel.: Fax: info@nb.org Useful Insights of the Cypriot Economic & Business Environment...20 Judicial System...38 Basic Aspects of Cypriot Law...76 Business Entities...98 Securities Banking System Foreign Investments Mergers & Acquisitions Competition Industrial & Intellectual Property Rights Transportation Insurance Insolvency - Bankruptcy Technology - Media - Electronic Communications Energy Environment Real Property Personal Data Employment Tax Immigration Legal Profession in Cyprus Related Information

3 TECHNOLOGY - MEDIA - ELECTRONIC COMMUNICATIONS

4 ELECTRONIC COMMUNICATIONS Costas A. Hadjioannou, Advocate, Barrister at law Partner at A.C. Hadjioannou & Co Law Firm Background Information National Telecommunications in Cyprus were provided on a monopoly basis by the Cyprus Telecommunications Authority (CYTA) a public corporation established by Law CAP302 from 1954 until Such monopoly was extended to international services in CYTA was both the Regulator of the sector and the service provider being subject to controls imposed by law and regulation approved by the legislature. The only exceptions to this monopoly was the terminal equipment market which was liberalized by regulations adopted by CYTA in 1989, and later in 1996, internet service provision which was liberalized by CYTA through contractual arrangements with prospective internet service providers. Laws enacted in 2002, provided for the establishment of a Corporation sole the Commissioner of Telecommunications and Postal Regulation/ (later renamed the Commissioner of Electronic Communications and Postal Regulation) (hereafter the Commissioner ) and for the gradual transfer of CYTA s powers to him as from 1st January 2003 and the abolishment of the monopoly in service provision by the issuing of licenses to other service providers. By the 1st of May 2004 date on which Cyprus joined the European Community the electronic Communications sector was fully liberalised the Commissioner being the National Regulatory Authority. CYTA remains a public corporation but its activities are limited to service provision. Legal Framework Since the 1st of May 2004 Cyprus has been following the EU legal framework. Law 112(I)/04 enacted on the 30th April 2004 as later amended implements the EU primary legislation, consisting of EC Directives 88/301/EC (repealed by Directive 2008/63/EC), 98/34EC, 1999/5/EC, 2002/19/EC, 2002/20/EC, 2002/21/EC, 2002/22/EC, 2002/58/EC, 2002/77/EC, 97/67/EC, 2002/39/EC, Regulation 733/2002, 2887/2002 (repealed by Directive 2009/140/ EC), 874/2004, 1211/2009, Directives 2009/140/EC and 2009/136/EC. Directive 2006/24/ EC was implemented, by Law 183(I)/2007. The Electronic Communications market is supervised/regulated by three independent authorities namely the Commissioner, the Commissioner for the Protection of Personal Data and the Radiotelevision Authority. Naturally the activities of service providers are subject to ex-post control of the Competition Authority. Secondary Legislation-Specific Matters A large number of Regulations adopted by the Commissioner in the exercise of powers delegated to him by Law 112(I)/04 provide for specific matters in more detail. 230

5 Interconnection: Organisations with significant Market Power (SMP) are obliged to interconnect their networks with the networks of new providers. To this purpose they are obliged to publish a Reference Interconnection Offer (RIO). The minimum content and rate of charges are regulated by the Commissioner who has extensive powers to impose amendments to the published RIO s. The content and procedure for amendment is provided by regulations and includes public hearings, costing systems and methods for determining rates as well as the framework of charges. Unbundling the local loop and sub loop: The Law provides for an obligation of the SMP s to provide fully unbundled access to the local loop and sub loop to new entrant enterprises in this particular field of activity, under the same terms, with the same quality and at the same time frames as those applicable to them. SMP s are obliged to publish a Reference Unbundling Offer (RUO) and LLU costs and the Commissioner has the power to impose amendments in a similar manner as with the RIO s. Leased Lines: Their availability by SMP s and the charges for leased lines up to 2Mbs both wholesale and retail and the wholesale provision of and charges of terminal segments and trunk segments of leased lines is regulated and SMP s are obliged to publish Reference Offers for wholesale services. Co-location: Co-location is obligatory subject to feasibility and regulations provide for methodology of determining compensation as well as for the reservation of space available for co-location purposes. Rights of Way Trespassing Rights: The Law provides that operators may lay pipes along public streets and roads pavements and public land subject to the Commissioners prior approval. Regulations provide for a procedure to be followed when approval is required which includes co ordination with other authorities such as the water board, electricity authorities and of course the public works department of the Ministry of Works. The rights granted are subject to restoration of all damage caused. Regulations also provide for the laying of pipes along roads under construction or reconstruction. Entry on and use of private land is allowed only in cases of emergency or with the owners consent. In exceptional cases when it is absolutely necessary to use private land and the owner is not co-operating the Commissioner may approve or adopt the compulsory acquisition of the required land. Market Analysis: The imposition of regulatory obligations on providers of electronic communication networks and/or services is subject to the prior definition of markets, analysis of the competition in each market, and if the market is not sufficiently competitive the designation of one or more operators as SMP s. The regulatory obligations imposed must be proportionate. The methodology procedure and powers of the Commissioner in defining and analyzing markets and selecting the regulatory obligations are provided in Regulations in detail. Often obligations described above are included in Orders or Decisions issued as a result of market analysis. The Law requires a market analysis to take place at least every three years. Regulations also provide for a National Numbering Plan and number allocation, universal service (content and cost), terminal equipment, terrestrial digital tv and other matters. Antenna construction: Antenna Construction is subject to a building permit. An Order of the Minister of Interior Affairs exempts certain antennas from the requirement and lays rules as to the issue of a permit for the rest which take into account their height, A.C. Hadjioannou & Co Law Firm 231

6 the direction of their radio coverage, and existing surrounding structures or potential structures. Starting provision of Electronic Communication Services in Cyprus When the use of scarce resources such as spectrum is not required it is fairly easy to start offering electronic communications. A General Authorisation is required for the offering of all kinds of electronic communication services. In fact anyone intending to provide electronic communication network or publicly available electronic communication services including special radio networks has to complete and submit to the Commissioner a Registration Declaration under a General Authorisation Regime. This Declaration is required also for the provision of electronic communication services through the infrastructure of other operators. When the intended activity requires the use of numbers or spectrum the operator has to apply to the Commissioner for the allocation of numbers at a fee and secure the required frequencies prior to submitting the declaration. The fees payable are calculated as a percentage of the gross income or expected income from the provision of public communication network or services excluding any VAT or national or EU subsidy. The current fees are as follows: Zone (Euro in million ) GI: Gross annual income % Percentage per Zone GI 10 0, GI 40 0, <GI 80 0, <GI 200 0, <GI 300 0, <GI 400 0, <GI 0,3920 Spectrum Spectrum being a scarce national recourse has been retained by the state. Frequencies are allocated by the Ministry of Communications and Works pursuant to a frequency plan in place. Operators requiring frequencies for the offering of their services have to first apply and secure the frequencies from the Ministry and then start service provision. Once frequencies are allocated the service provision is subject to the Commissioner s powers and regulation. Are the relevant markets mature or congested. Is there space for newcomers? The Cyprus market has a lot of maturity signs. There is not yet full coverage for broadband services but the gap is fastly closing. The double play market is growing and triple and quatro play is emerging. MVNOs are now active in the market but only to a small extent. 232

7 Mobile Communications There are currently two licensed operators providing mobile services. CYTA being the incumbent operator has been offering mobile GSM services since the mid 90s MTN (formerly Areeba) was licensed in 2003 and started operations in Both offer 2G and 3G services and CYTA s network effectively covers the whole of island (excluding only parts of the Turkish occupied area). MTN was slow in acquiring a market share but now holds over 27% of the market. CYTA has a cooperation arrangement with Vodafone and is able to offer Vodafone services and international roaming at attractive prices. The size of the market (approximately population) have so far frustrated thoughts of a third license being awarded although that was the original intention which has not yet been abandoned. Fixed Communications CYTA is the incumbent operator. It is still a public corporation established by law and therefore fully controlled by the state. Despite the limitations inherent in its public nature (obligations to purchase equipment through public tenders and inelastic procedures, limitations in personnel organization and budgetary approvals and controls) it manages to remain efficient and adaptive and provide services in accordance with international standards and public demand. Despite the liberalization of the sector since January 2003 CYTA holds about 87% of the market of fixed connections. CYTA is heavily regulated since all fixed alternative operators still depend on its copper network leased lines for offering their services. The prices and terms of Interconnection, LLU services and leased lines are the subject of reference offers approved by the Commissioner. The same applies to retail prices. In fact regulatory obligations imposed by the Commissioner aimed at affording space for newcomers in effect prevent the development of triple play and quatro play offerings by Cyta. The other major operators namely Primetel and Cablenet are seeking to deploy their own fixed network especially in urban areas. Rural areas are not yet targeted due to the high cost and the small size of the market. The price controls imposed on CYTA are designed to allow some room for competition however these controls have to be balanced so as not to operate to the detriment of the consumers. All three major operators now offer content (TV) and are able and do offer double play services. Synergies are emerging for the combination of fixed and mobile service offerings. The fixed telephony market is declining as customers turn to mobile services and the cost of monthly subscription for a fixed line is high. Households which had two or three lines now retain only one mainly for internet access and iptv. Some smaller operators who were offering services on a number selection/ pre selection basis or exclusively internet access or international services have ceased their activities or have been taken over or merged with others. Market forces rather than legal barriers seem to prevent newcomers from entering the market as a high investment is required to deploy a network and/or to compete with the existing operators in a small market. A.C. Hadjioannou & Co Law Firm 233

8 Is on line gambling allowed? Gambling is generally illegal in Cyprus. Online gambling was illegal in Cyprus until very recently when a new law enacted in 2012 which has not yet been implemented fully, makes online gambling legal subject to the control of licenses. The law has not yet been implemented so the details and procedures of how licenses are obtained are not yet clearly defined. What about iptv? As stated above all three major fixed service providers now provide content and tv. The tv content provided over fixed lines had for a long period of time escaped regulation as the Radio Television Authority had powers only over wireless radio or tv operators. New laws enacted in 2011 have included terrestrial cable tv offerings in its powers. Therefore a license from the Radio Television authority is required for the provision of iptv or any transmission of tv programs over cables or otherwise. There are still pending amendments to these laws which aim to regulate the nature of the organizations providing these tv services and a definition of the programs to be included in each license. This is due to the fact that the original provisions relevant to wireless radio and tv broadcasts were designed to control the classic programs and included provisions for limiting the direct or indirect control any one person could exercise on the content of the program. It is expected that these provisions will be limited to the classic programs but the provision of iptv will still be the subject of a license from the Radio Television authority which will impose conditions. A.C. HADJIOANNOU & CO LAW FIRM 4 ALKAEUS STR NICOSIA, CYPRUS Tel.: Fax: office.admin@achadjioannoulaw.com Url: Languages Greek, English Number of Lawyers: 9 Contact Costas A. Hadjioannou AREAS OF PRACTICE Real Property Regulatory Compliance Electronic Communications Banking and finance and Media Intellectual Property Contract - Commercial Law Litigation Administrative Law Debt Recovery Company Law and Corporate Formation and governance / Competition M & A Insurance/Personal Injury Procurement Claim/Torts Privacy - Data Protection Tax Law/Planning Product Liability Offices in Larnaca, Limassol and Paphos 234

9 TECHNOLOGY - MEDIA - ELECTRONIC COMMUNICATIONS

10 PRIVACY, DATA RETENTION AND DATA PROTECTION IN THE ELECTRONIC COMMUNICATIONS SECTOR Nitsa C. Hadjioannou, Advocate, LLB Hons. LEIC, Barrister at law Associate at A.C. Hadjioannou & Co Law Firm Constitutional Protection of the Confidentiality of Communication The Cyprus Constitution adopted in 1960 in addition to the protection of every persons private and family life (Art 15) which is subject to exceptions necessary for the interests of security of the Republic or public safety or order or public health or morals or the protection of the rights and liberties of others specifically protects the secrecy of correspondence and other communications. Art. 17 of the Constitution as it was before its amendment provided: 1. Every person has the right to respect for, and to the secrecy of, his correspondence and other communication if such other communication is made through means not prohibited by law. 2. There shall be no interference with the exercise of this right except in accordance with the law and only in cases of convicted and unconvicted prisoners and business correspondence and communication of bankrupts during the bankruptcy administration. The sixth amendment to the Constitution passed in 2010 deleted and replaced Sub Article 17.2 above. The new Sub Article 17.2 abolishes the exception in respect of the business correspondence and communications of bankrupts during the bankruptcy administration but introduces new exceptions to the exercise of the right protected by Article Thus nowadays interference with the right protected by Article 17.1 is permissible if it is allowed by a law in the following situations: A. In the case of convicted or unconvicted prisoners. B. By a Court Order issued pursuant to the provisions of a law on the application of the Attorney General of the Republic and if the interference is a measure which in a democratic society is necessary only for the purposes of the security of the Republic or for the prevention, detection or prosecution of: Premeditated murder or manslaughter Trafficking of people (whether children or adults) and offences relating to child pornography Supply, trading, cultivation or production of narcotics or other psychotomimetic or dangers drugs Offences relating to the currency of the Republic Corruption offences for which on conviction the sentence provided is five year imprisonment or more A.C. Hadjioannou & Co Law Firm 235

11 C. By a Court Order issued pursuant to the provisions of a law for the purpose of detection and prosecution of serious crimes for which the sentence provided in the event of conviction is five or more years imprisonment and when the interference relates to the traffic data and location data and relevant data required to identify the subscriber or the user. Legal Framework For a long period the only protection afforded for the confidentiality of communication was article 17 of the Constitution and the Telecommunications Regulations which provided generally for the secrecy of communications. Law 92(I)/96 made it an offence punishable by three years imprisonment to intercept, monitor or disclose any private communication or use same knowing that it was the result of interception or attempt to do any of the above or possess or use any equipment capable of intercepting any communication. Private communication is defined to mean any oral communication or telecommunication by a person in circumstances where such person would expect that it would not be intercepted or heard by any person other than the one intended to receive it whether it be made by the use of wires or wireless. Further content of communication is defined to include matters said, the identity of the parties involved, the existence, purpose and meaning of the communication and the telephone numbers of the communicating parties. The only exceptions to this absolute prohibition of interception/ disclosure are: The interception / disclosure with the consent of both communicating parties. The interception / disclosure of a communication with the consent of the victim in the event of indecent disturbing or threatening calls. The accidental or intentional interception for the purposes of maintenance of telecommunication equipment or the preparation of telephone bills subject to the respect of the confidentiality of the information received. The interception monitoring or disclosure of a communication ordered by a Court. Such order however can only be issued on the application of the Attorney General and only when the subject of surveillance is a prisoner convicted or unconvicted. Thus the exception to the right to confidentiality provided by the Constitution was limited to prisoners. Law 112(I)/04 introducing the European Directives on Electronic Communication provide for: The retention of traffic data only for the period allowed for objection to the telephone bills and that thereafter they should become impersonal. The retention of billing data only for the period allowed for recovery of payment. The erasion of any and all such data thereafter. The disclosure of location data in emergency situations. Regulations issued under the powers of the Law allow providers to retain traffic data for a period of six months. Law 183(I)/2007 introducing Directive 2006/24/EC provides for the obligatory retention of traffic data and location data by service providers for a period of six months. The data to be retained are both incoming and outgoing calls fixed or mobile and internet access, 236

12 data relating to the equipment used and location data and identity of the subscribers. However the content of the communication is specifically excluded. The Law provides for a power of the Court to Order the retention / preservation or disclosure of such data to the Police for the purposes of detecting and prosecuting crimes punishable by imprisonment of five years or more. It further allows the disclosure of location data in cases of kidnapping without a Court Order provided a Court Order is obtained within two days. Data so disclosed if proved to be irrelevant to the crime under investigation should be destroyed. The Commissioner for the Protection of Personal Data is monitor the enforcement of the law. Effectively to ensure that no unauthorized disclosure is made and that data disclosed is destroyed if not relevant to the crime under investigation. Application of the Protection The Cyprus Courts have been very strict in the protection of the right to Confidentiality of Communications. In one situation where an employee of a Public Authority was suspected for corruption and his fixed phone was tapped the court excluded the evidence of recorded conversation as illegally obtained annulled his dismissal as made without reason and thereafter in an action by the employee for damages for infringement of his right to confidentiality of communication awarded damages to him. In another situation evidence of the subscriber and the numbers called by a cell phone found in the scene of a murder which pointed to the accused were excluded as obtained in violation of the rights to respect of the confidentiality of communications and the charges against the accused were as a result dismissed. The Court refused orders for disclosure in cases of Customs fraud even where the Republic pursuant to international treaties was obliged to disclose information to foreign authorities e.g. Customs Treaties, Interpol. Further in a case decided before Law 183(I)/07 and the amendment to the Constitution it refused an order for the disclosure of the subscriber of a number to be called, designated as recipient on a parcel containing drugs, received through the post. A Court Order for the disclosure of the subscriber of an IP address for the investigation of child pornography was quashed by the Supreme Court in a case decided before the recent amendments and as result all the evidence obtained as a result excluded and the accused discharged. The most recent case decided in September 2012 demonstrates the sensitivity of the Courts in allowing interference with the right to confidentiality of communication. The complainant filed a complaint that someone interfered with her Facebook account and changed the name of the account and photograph. Later she managed to recover access to the account and through the facilities afforded by the website managed to identify the ip address which interfered with her account. She promptly disclosed the ip address to the Police who secured a Court Order for the disclosure of the subscriber of the ip address. The Supreme Court quashed the order on two grounds. Firstly on the procedural side the application for the Order was based on a wrong and inapplicable provision of the Constitution. Secondly the ip address being a private telecommunication data could be A.C. Hadjioannou & Co Law Firm 237

13 disclosed only by a Court Order. The disclosure of the ip address by the complainant to the Police was illegal as it was not authorized by a Court Order therefore the subsequent order for disclosure of its subscriber was obtained based on illegal and inadmissible evidence and it should be quashed. The laws in place and the attitude of the Courts have led service providers to be extremely weary of any disclosure and to even scrutinise Court Orders often challenging them themselves. Effect of the legal provisions In effect it can be safely said that the Confidentiality of Communications is more than sufficiently protected in Cyprus. Service Providers are obliged to retain and preserve for a period of six months traffic and location data and such other data relevant to the identification of the subscribers or users and the time and duration and place of the communication. The content (i.e. matters said or written) are not included and it is an offence to record them or retain/preserve them. (Law 183(I)/07) Service Providers are obliged to: Take the appropriate measures to ensure that the preserved data are of the same quality and enjoy the same protection and security as data of the network. Take the appropriate technical and organizational security measures to protect the data against accidental or unlawful destruction, accidental loss or alteration, or unauthorized or unlawful access, storage, processing or disclosure. Take the appropriate technical and organizational security measures to ensure that they can be accessed by specially authorized personnel only. Take the appropriate technical and organizational measures for the automatic destruction of the non preserved data after six (6) months of the communication. The interception and monitoring of electronic communications is allowed only: (a) when the communicating party is a prisoner convicted or unconvicted or (b) it is done for the purpose of (i) security of the Republic or (ii) for the prevention detection or prosecution of the crimes enumerated in the amended Article 17.2 B of the Constitution (above). Only the Court can on the application of the Attorney General authorize by an Order the interception/monitoring and disclosure/use of the communications subject of surveillance and further only the Court on the application of the Police approved by the Attorney General can authorize the disclosure/use of the data retained. The Court when issuing an order imposes conditions as to the extend, use, disclosure or destruction of the data. Service Providers are obliged to comply with such Court Orders but they are also obliged to resist any other attempts at disclosure or surveillance. If they fail to comply with either obligation they are liable be held guilty of an offence. The Commissioner In the Protection of Personal Data is the independent authority entrusted with monitoring the application of Law 183(I)/07 (the retention preservation of the traffic and location data) and ensure that data is not unlawfully processed or disclosed. 238

14 He is entrusted with powers of search and inquiry and of investigating complaints and powers of imposing administrative fines or submitting matters to the Attorney General for the purpose of establishing criminal liability. The subjects of surveillance are entitled to be informed of the fact within 90 days from the termination of surveillance and if they have suffered damage they are entitled to compensation. To all the above it should be noted that prepaid mobile service is still anonymous in Cyprus. A.C. HADJIOANNOU & CO LAW FIRM 4 ALKAEUS STR NICOSIA, CYPRUS Tel.: Fax: office.admin@achadjioannoulaw.com Url: Languages Greek, English Number of Lawyers: 9 Contact Costas A. Hadjioannou AREAS OF PRACTICE Real Property Regulatory Compliance Electronic Communications Banking and finance and Media Intellectual Property Contract - Commercial Law Litigation Administrative Law Debt Recovery Company Law and Corporate Formation and governance / Competition M & A Insurance/Personal Injury Procurement Claim/Torts Privacy - Data Protection Tax Law/Planning Product Liability Offices in Larnaca, Limassol and Paphos A.C. Hadjioannou & Co Law Firm 239

15 REAL PROPERTY

16 LAND LAW (immovable property law, Cyprus land registry, private ownership, restrictions, acquisitive prescription, trusts registration, etc) Costas A. Hadjioannou, Advocate, Barrister-at-Law Partner at A.C. Hadjioannou & Co Law Firm Background The underlying principle of Cypriot Land Law is that every interest or right over or affecting immovable property is registered and can be traced in the Registries of the Lands and Surveys Department kept in the District Land Offices (one for each of the five Districts). These include ownership, easements, privileges rights of way, rights reserved, mortgages and encumbrances, contracts of sale, springs, boreholds wells, watercourses irrigation channels and rights thereon, trusts and leaseholds. This was made possible by the General Survey and Registration conducted in the 1920s. The General Survey resulted in the adoption of survey plans made to scale for the whole of Cyprus on which each piece of land as it was held then is plotted to scale and numbered. Practically all privately owned land was then registered in the name of the owners and title deeds issued. Each registration and title deed relates to a plot on a Government survey plan made to scale and the area covered by the registration and corresponding title deed is the area of the plot on such survey plan. Forest land and government land (known as chali land) public roads and footpaths lakes, rivers, streams and natural watercourses are clearly plotted on such plans and indeed forest land is on the ground clearly marked by distinctive land marks ( Koukos ) on its boundaries. No rights can be acquired over such land otherwise than by a decision of the Council of Ministers. The only rights which do not appear on the Land Registries are beneficial interests in trusts imposed by law eg. constructive and resulting trusts, contracts of sale not deposited with the Land Registry, and easements and rights of way acquired by long use (i.e. over 30 years) which have not yet been registered. All if disputed have to be determined by a Court. However the title or rights of a bona fide purchaser for value without notice cannot be defeated by trust imposed by law and contracts of sale not deposited with a District Land s Office. The general survey and registration and the compilation of a Land Registries since the 1920s means that the history of each registration and of its related plot (i.e. previous owners the way they acquired ownership the original plot and subsequent divisions or additions) is readily available. Thus mistakes related to wrong registration or wrong plotting( which are scarce situations) can be traced and corrected. Further the various rights acquired or abandoned are traceable and the survey plans enable the demarcation of boundaries with precision. 278

17 Since the enactment in 1946 of the Immovable Property (Tenure Registration and Valuation) Law CAP 224 no title to immovable property can be acquired by any person by adverse possession against the Government or a registered owner. Thus a holder of a valid title deed issued by a District Land s Office is to all intends and purposes protected against adverse possession or any other claims. The title deed is a two page document which certifies that the named holder is the registered owner of the plot number of the Sheet Plan of the location referred there in. The area of the plot the date of registration and the easements or rights of way or other permanent rights in favour of or over the plot are also included. Other temporary rights such as mortgages and encumbrances can only be discovered by a search in the Land Registry. Forms of Ownership CAP 224 of the Laws as amended which is still the basic law regulating the rights over immovable property provides for and recognizes the following forms of ownership. Full title The full title to immovable property means that the registered owner is entitled to the whole interest in the plot of land and can do whatever he likes with his property subject to any town and country planning restrictions. Beneficial Ownership Beneficial Ownership confers on the owner those rights which are provided in the trust deed which is deposited with the Land Registry. He has no title as the registration and the title deed is issued to the trustee who is the legal owner. The title deed expressly states that the property is held on trust. Another form of beneficial ownership is the life interest reservation. This confers on the beneficial owner the right to possess or exploit the tenement for the period of his life while the title is in the name of another. This is usually a course adopted by parents when transferring their land to their children. Leasehold Leasehold Ownership confers on the Leasehold title deed holder those rights which are provided in the lease which is deposited with the Land Registry. Such leasehold title deeds can be issued for long leases i.e. 15 years or over and subject to the provisions of the lease, can be sold, transferred or mortgaged at the holders option. Undivided shares Ownership in undivided shares is a singular form of ownership. The owner is registered in e.g. 1/3 undivided shares of the plot of land or building covered by the registration. Such ownership is invariably the result of inheritance where the heirs instead of selling the property and sharing the purchase price or alternatively distributing the property they register the property in their names in undivided shares in proportion to their hereditary right e.g. three children of a deceased register a plot in their names in 1/3 undivided share A.C. Hadjioannou & Co Law Firm 279

18 each. Each undivided shareholder has a right to possession together with the others to the whole of the property without a specific part of the property being allocated to him. They can together lease or sell the property. Each one has the right to transfer by donation or inheritance his share and further has the right to mortgage or otherwise encumber his undivided share. Each undivided shareholder is entitled to sell his undivided shares subject to the other undivided share holders option to purchase his shares at the price achieved. Finally each undivided shareholder is subject to the powers of the Director of Lands and Survey s Department (the Director) to compulsorily divide or sell (if it cannot be divided) the plot on the application of one of the other undivided shareholders. Division of immovable property Large plots of land can be divided in smaller plots by the Director on the application of the registered owner or compulsorily on the application of an undivided shareholder. Such smaller plots may have an area of approximately 7200m2 or 2880m2 or 1440m2 depending on whether they are irrigated or there are vineyards or trees on such land. However no land, which is included in a building zone in the town and country plan, can be divided into smaller plots without a division permit from the appropriate authority. Such permit includes the approved plans of the smaller building plots and conditions for the construction of roads and availability of water supply and electricity. Where there are buildings they are either included in the registration of the plot of land or there can be a division of such buildings and a separate registration and title deed be issued of the various tenements. Such division may be: Horizontal (applicable mainly to apartment buildings) It applies when there is ownership of a separate parts of a multi storey building (e.g. a floor or parts of a floor apartment). Division and separate registration of the tenements can only be achieved with the permission of the planning appropriate authorities and in accordance with the approved building plans. In such a case, each registration conveys in addition to the apartment a percentage in undivided shares in the plot of land and the common use areas. Vertical (applicable to semidetached or detached houses). It devides the different ownerships /properties on separate buildings (or parts of these buildings) that were constructed on a single plot of land. Usually the plot is divided and the registered owner has a full title to the building and land included in his title. Acquiring Property Property may be acquired: By straight transfer by the registered owner. Such transfer may be by gift or sale or exchange with other property and is achieved by the signing of a transfer form before a District Land Office. By inheritance on the application of the Administrator of the estate of a deceased person. Pursuant to the provisions of an express trust. 280

19 By division or distribution. By a Court Order which is issued in the most common situation in cases of wrong registration, fraudulent transfers, breach of trust, and breach of Contract. In each situation the Land Registry will transfer the registration to the new owner and issue a new title deed to him. Transfer fees of 5-8% depending on the value are payable for sales, donations to anyone other than parent, child, brother or sister or spouse. Commonly Encountered Problems The most common problems faced by owners are: Access As most plots of land have no access to a public road owners often need a formal right of way to access a public road. The Director has power on the application of an owner of a plot without access or without satisfactory access to designate a right of way through adjacent plots up to the nearest public road for use on foot with animals or vehicles. The width is usually 4 meters nowadays. The law provides that it should be the shortest way causing the least nuisance to the adjacent owners. Further the owners of the adjacent properties are compensated usually by the market value of the land affected. Although so compensated the land covered by the right of way remains their own the right being only a right of passing over it. Borderline Disputes Often owners of adjacent plots claim that strips of land on their borderline is part of their plot. The Director is empowered to determine at first instance such disputes, on the application of either party, according to the survey plans whether the disputed strip is part wholly or in part of the one or the other plot. Performance of Contract of Sale of Land Executory Contracts of Sale of Land may be deposited, as an encumbrance on the land, with the Land Registry Office of the District where the land is situated. This gives them priority over subsequent encumbrances and also over previous contracts of sale of the same property which were not deposited. Further it empowers the Court to order the Specific Performance of the Contract. In fact until recently the Court could not order specific performance of the contract unless the contract was deposited with the Land Registry. Recent enactments enable the court to order specific performance even if the contract is not deposited if the circumstances justify such an order but it is always advisable to deposit the contract within the time allowed as the priority of claims over the property is regulated by the date of registration of the encumbrance. The problems mostly arise when a contract of sale of an apartment or a house is signed while the construction is not complete or even before it commences and hence there is no separate title deed for the unit purchased. If the developer fails to comply with the conditions of the building permit or if he abandons works or if he had previously mortgaged the plot to secure finance for the building works and has failed to repay then the separate registration and title deeds for the unit sold cannot be issued and the purchaser could be exposed. Recent amendments A.C. Hadjioannou & Co Law Firm 281

20 to the legislation and the Specific Performance law enable the purchasers to take over the building and completion of works and apply for separate title deeds in certain situations, to pay the balance due on their contracts to the Mortgagee and force the exclusion of the unit they purchased from the mortgage and to force through the court Specific Performance of their contract. Further amnesty laws enable existing violations of building permits to be covered by amendments to the permit at a cost and therefore separate title deeds be issued. These new developments of the law are expected to solve the problems faced by purchasers of buildings under construction. However the provisions are complicated and it is always advisable to involve a legal advisor at the negotiation stage and obtain all the information available from the Land Registry. Compulsory Sales Compulsory Sales of immovable property may take place in the following instances. By a decision of the Director on the application of an owner of undivided shares when the property cannot be divided. By a decision of the Director or a Court Order in satisfaction of a debt when the property is mortgaged. By order of the Court in execution of a judgment against the registered owners to satisfy the judgment debt. Sale is conducted by the Director by public auction pursuant to the Rules of Sale. Disputes often arise as to the timing of the sale, the reserved price or the procedure followed. Hereditary Rights The appreciation in the value of land has led to a lot of expatriates who have for a long time even generations neglected their rights to inheritance to seek and claim their hereditary rights. The existence of the Land Registries and the availability of the history of each registration enable them to trace the properties of their ancestors. Usually the properties have been registered in the names of the rest of the heirs. In such situation the Director has no power and the only way to claim is through the Court. In all the situations where the Director is empowered to decide he does so according to the Registries, Records, and Plans kept in the Land Registries. He has no power to decide over conflicting claims of ownership or hear evidence. Further every Director s Decision is subject to an appeal to the District Court of the District where the land is situated and from the decision of the District Court to the Supreme Court. Restriction on the rights to Immovable Property Article 23 of the constitution of Cyprus safeguards every persons right to acquire own possess enjoy or dispose of any movable or immovable property. No deprivation or restriction or limitation is allowed except for restriction or limitations which are absolutely necessary in the interest of public safety or public health or the public morals or the town and country planning or the development and utilization of any property to the promotion of the public benefit or the protection of the rights of others 282

21 and only if imposed by law. Just compensation must be paid for any such restrictions or limitation which materially decrease the economic value of such property. Such compensation if not agreed is determined by the courts. The restrictions and limitations imposed are those relating to Town and Country Planning and the imposition of various planning zones which restrict the use of the land (e.g. agricultural residential, industrial etc) or the buildings to be constructed e.g. area or height or both or the ability to build eg. by imposing a maximum length of access to a public road. There is also a protection of the coast line beyond which no building is permitted. Finally immovable property may be compulsorily acquired or requisitioned by the state or public authorities for public purposes provided by laws 15/1962 & 21/1962. Just compensation is payable in each situation which if not agreed is determined by the Courts. A.C. HADJIOANNOU & CO LAW FIRM 4 ALKAEUS STR NICOSIA, CYPRUS Tel.: Fax: office.admin@achadjioannoulaw.com Url: Languages Greek, English Number of Lawyers: 9 Contact Costas A. Hadjioannou AREAS OF PRACTICE Real Property Regulatory Compliance Electronic Communications Banking and finance and Media Intellectual Property Contract - Commercial Law Litigation Administrative Law Debt Recovery Company Law and Corporate Formation and governance / Competition M & A Insurance/Personal Injury Procurement Claim/Torts Privacy - Data Protection Tax Law/Planning Product Liability Offices in Larnaca, Limassol and Paphos A.C. Hadjioannou & Co Law Firm 283

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