Trapped buyers and the new legislation

The issue of trapped buyers has concerned thousands of citizens for many years. These are individuals who purchased immovable property, fulfilled their contractual obligations, paid the purchase price, yet were unable to secure a title deed.

The main cause lies in the existence of prior encumbrances, such as mortgages, memos or other charges burdening the property due to the seller’s obligations to third parties.

With Law 110(I)/2025, the legislator seeks to restore protection for these buyers through a new, more balanced and constitutionally aligned framework, effectively incorporating the principle of proportionality.

Specific conditions and control mechanisms are introduced to safeguard the bona fide purchaser, without disregarding the rights of sellers and mortgage lenders.

When is a trapped buyer protected?

Firstly, the contract of sale must relate to immovable property or part thereof and must have been concluded by December 31, 2014. Additionally, it must either have been deposited at the relevant District Land Registry Office by that same date, or deposited at a later stage pursuant to a court order, provided that the relevant court application was filed by December 31, 2024.

A second requirement is that a title deed must have been issued for the property forming the subject matter of the contract. The legislator has also addressed pending older applications, allowing for their examination under certain conditions, provided that the issuance of a title becomes feasible within the prescribed timeframes.

The most critical issue concerns pre-existing encumbrances, which lie at the heart of the deadlock affecting most buyers, those who have purchased and paid, yet the property remains burdened by a mortgage, memo or other charge predating the deposit of the contract.

Application to the Land Registry and overcoming encumbrances

Law 110(I)/2025 provides that a buyer may proceed with the transfer of the property by submitting an application to the Land Registry, even where prior encumbrances exist, subject to certain conditions.

The first condition is to secure the written consent of the persons in whose favour the encumbrances operate, so that they may be lifted or cancelled in relation to the property sold. Such consent includes a written release from a licensed financial institution.

What makes the law particularly significant is the second scenario, in which, even in the absence of such consent, the trapped buyer is no longer left without remedy. If the purchase price has been fully paid and the beneficiaries of the encumbrances refuse to consent, the buyer may apply to court, within 45 days of the refusal, seeking an order declaring that such refusal is abusive and unjustified.

If such an order is issued, it effectively substitutes the required consent and allows the process before the Land Registry to proceed. This development shifts control away from the absolute discretion of the lender or encumbrance holder to judicial scrutiny, guided by good faith and the prevention of abuse of rights.

At the same time, the law provides for the suspension of pending procedures under other legislation, such as foreclosure, bankruptcy or corporate proceedings, until the issuance of the relevant court order or the completion of the examination of the application.

In this way, buyers are afforded a period of protection, preventing the alienation of the property while they pursue the safeguarding of their rights.

What the buyer must do in a timely manner

The new law favours trapped buyers; however, protection does not operate automatically. The buyer must act promptly, verify whether the relevant conditions are met, ascertain whether a title deed exists or can be issued, secure the necessary certificates and submit a complete application to the Land Registry.

If any part of the purchase price remains outstanding, the buyer must declare readiness to pay and deposit the amount into a designated temporary account. If a beneficiary of an encumbrance refuses consent, the buyer must apply to the court within 45 days.

The value of Law 110(I)/2025 lies in its recognition that a bona fide purchaser should not remain hostage to deficiencies, omissions, or encumbrances created by the seller. At the same time, it seeks to achieve this in a manner that respects constitutional balance and does not indiscriminately extinguish the rights of third parties.

In my view, Law 110(I)/2025 constitutes a serious and necessary step in the right direction. It does not resolve every case, but it now provides trapped buyers with real tools; the right to apply, the possibility of judicial intervention, the suspension of detrimental procedures and, most importantly, the prospect of finally registering the property they have purchased in their own name.