In Cyprus, ownership of immovable property is what the Land Registry says it is. Every buyer relies on that rule, and every lawyer repeats it.

On 22 September 2026 the Supreme Court gave a reminder that the rule has an exception. In Kermanou v. Koutsofta and others (Civil Appeal 209/2017), a registered owner sued her relatives and neighbours for trespass over a strip of land that her title clearly showed as hers. She lost. The Court held that she held the strip as trustee for them, because of an oral sale made more than forty years before the action was filed.

The judgment confirms that an oral sale of land can give rise to a constructive trust, that the trust can bind a later owner who knew the facts, and that none of this appears on the title.

The facts

Kermanou owned two adjoining plots in Liopetri, plots 137 and 380. In 1972 he orally sold to his son-in-law, the husband of his other daughter, a piece of about 600 m² for £1,000. The piece was intended for his granddaughter, then a minor. 516 m² lay in plot 380 and a strip of 85 m² in plot 137, so that the building plot would come out square. No contract was signed and nothing was registered at the Land Registry.

The buyer built his daughter's house there and, in 1976, a boundary wall in the position shown to him by the seller himself, together with a garage with a building permit. The wall enclosed the 85 m² strip.

In 1979 the seller divided the land by two registered gifts: plot 137 to his daughter and part of plot 380 to his granddaughter. The strip was not separated and, on paper, followed plot 137, even though the wall was shown on the survey plan that accompanied the gift to the granddaughter. For thirty years nobody challenged the wall or the garage.

In 2010, while new survey plans were being prepared, Land Registry officers told the daughter that the strip was registered in her plot. The granddaughter filed a first action, which was dismissed in 2014 on procedural grounds without the merits being examined. Then came the daughter's action for trespass against the granddaughter, her two daughters, to whom the granddaughter had meanwhile gifted the property, and the family company that uses it. The defendants counterclaimed: a declaration that the strip belongs to them in equity, an order for its transfer and, in the alternative, a right based on possession for more than 30 years.

The Famagusta District Court did not believe the claimant. The critical question was why the wall had been built where it was, and not on the boundary shown on the survey plan, if there had been no agreement. Her explanation was found to be "unreasonable".

The rule and the one exception

Section 4(1) of the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224, provides that no right in immovable property exists, is created, acquired or transferred except under that Law. It applies "notwithstanding" section 29(1)(c) of the Courts of Justice Law 14/1960, through which the principles of equity apply in Cyprus. Section 65ΙΕ of Cap. 224 adds that a trust over immovable property must normally be created in writing and registered at the Land Registry.

Yet section 4 of Cap. 224 itself applies "subject to" the law on trusts. That is where equity comes back in. In Odysseos v. Pieris Estates (1982) 1 CLR 557 the Supreme Court held that the exception is not limited to express trusts but also covers constructive and resulting trusts. In Christoforou v. Christoforou (1998) 1 AAD 1551 it held that the words "no trust" in section 65ΙΕ "do not include resulting and constructive trusts". Tsangaris v. Gavriilidou (2003) 1 AAD 472 said it plainly: sections 4 and 65ΙΕ "do not prevent the application of the principles of equity in relation to constructive or resulting trusts".

The line of authority is therefore settled: section 4 does not close the door to trusts imposed by equity, even without a document or registration.

What the Supreme Court decided

The appeal was dismissed unanimously. Five points matter:

  1. Sections 4 and 65ΙΕ do not prevent a constructive or resulting trust over immovable property, even without a document or registration at the Land Registry. The Court followed Odysseos, Christoforou and Tsangaris (above).

  2. An oral sale of land can give rise to a constructive trust in favour of the buyer. What is needed is clear terms, a common intention and acts in reliance on it, in particular acceptance in practice by the person against whom the arrangement operates. The burden of proof lies on the person making the claim. The Court draws on English case law: Gissing v Gissing [1971] AC 886, Ely v Robson [2016] All ER (D) 140 (Jul) and Matchmove Ltd v Dowding [2016] EWCA Civ 1233. In the last of these, an oral agreement for the sale of land was held enforceable through a constructive trust.

  3. A later owner who knew is bound. The daughter took the land by gift, and took it subject to the trust. The trial court found, and the Supreme Court upheld, that she not only knew of circumstances indicating the trust but had been told of the agreement by her father himself. The Supreme Court also noted that the situation that had existed for years "without any protest" from the claimant "reasonably demonstrates" her knowledge.

  4. The later written gift did not cancel the earlier oral agreement. The claimant argued that the 1979 gift to the granddaughter, which did not include the strip, replaced any earlier arrangement. The Court answered that replacement would have required express reference to the cancellation of the sale and a common intention (Grant v Edwards [1986] 2 All ER 426, Pigkos Estates Ltd v. Kalogirou (2015) 1 AAD 1953). On the contrary, leaving the strip out of the gift was exactly what gave rise to the trust.

  5. The word "trust" does not need to appear in the pleadings. The counterclaim relied only generally on "the principles of equity". It is enough that the pleaded facts support the trust (Kennedy Hotels Ltd v. Indjirdjian (1992) 1 AAD 400).

What the buyers did not get

The defendants were declared owners in equity. They did not get title.

The trial court rejected the request for transfer and registration, because that first requires the plot to be divided (Papaioannou v. Andreou (2001) 1 AAD 903), and division is subject to its own rules under Cap. 224. It also rejected the alternative claim based on possession, since the defendants were claiming to be owners already. The Supreme Court examined neither. The practical result: the wall and the garage stay, the trespass action is dismissed, and title remains with the claimant as trustee.

In other words, the trust worked here as a shield. Can it also work as a sword? In other cases, yes. In Christoforou one sister held a whole plot as trustee for the other. The trial court made an order by which the plot was given to the beneficiary "now also formally as owner", and the Supreme Court dismissed the appeal. It noted, however, that "no question arises here of seeking specific performance of any contract".

In Kermanou there are two obstacles to title. The first is that the strip is part of a plot. In Papaioannou v. Andreou (2001) 1 AAD 903 the Supreme Court confirmed a constructive trust but set aside the registration order: "Registration here presupposes division. Which is regulated by legislation. Whether division is feasible will be established only once the mechanism for such a change in the land register is set in motion." The second is that, unlike Christoforou, the trust here arose from a sale. There Odysseos applies, to which we return below.

What the judgment adds

Kermanou does not open a new path. It follows a line drawn in 1982. Three points deserve attention.

First, this is an oral sale for a price, decided finally. The Supreme Court had already accepted in 1982, in Odysseos, that "a contract for the sale of land gives rise to a constructive or resulting trust". There, a flat buyer who had paid the full price obtained an interim order protecting his possession. The Cypriot examples given in Kermanou itself are disputes between spouses and cohabitants (Pentafkas v. Pentafka (1991) 1 AAD 547, Kleridis v. Stavridi (1998) 1(A) AAD 521) and arrangements between parents and children (Iereidis v. Panayiotou (2006) 1 AAD 498). Kermanou recognises, in a final judgment after a full hearing, a trust arising from an unwritten sale for £1,000, and relies expressly on Matchmove, where an oral sale of land was held enforceable through a trust.

The principle is stated in general terms, and in Matchmove the seller was a company. The facts of Kermanou, however, are family facts, and the Court expressly places it among cases of "provision of immovable property by parents to their children on the basis of a specific arrangement". Anyone seeking to distinguish the judgment in a commercial oral sale will start there.

Second, it follows Odysseos on what the trust gives. In Odysseos the Supreme Court held that a constructive trust "cannot, in Cyprus, create an estate in land" without compliance with the law on specific performance. At the time that was Cap. 232; today it is Law 81(I)/2011. The buyer can, however, protect his possession, and indeed "as against the owner, as well". The result in Kermanou is the same: possession yes, registration no. But registration was refused by the trial court because division was needed, and the Supreme Court did not examine it. The judgment refers neither to Law 81(I)/2011 nor to Cap. 232. Whether a buyer under an oral sale can seek registration where no division is needed therefore remains open. Odysseos, albeit at the interim stage, suggests the answer is probably no.

Third, knowledge can be inferred from silence. The daughter was not a party to the sale. She received the land by gift seven years later. The trial court found that her father had told her about the agreement. The Supreme Court did not stop there, though. It held the inference of her knowledge reasonable "given that for years the existing state of affairs persisted without any protest from the appellant. Something that reasonably demonstrates the appellant's knowledge of the oral agreement". For an owner who tolerates someone else's visible structure for years, that sentence is the most important part of the judgment.

What it means in practice

If you are buying land. The title and the search certificate show what is registered. They will not show an old agreement on which everyone has acted for decades. Walk the plot with the survey plan in hand. A wall, a fence or a building that does not match the boundary is a question for the seller before you sign. Ask who built it, when, and on what understanding.

If you own land and someone else's structure stands on it. Before suing for trespass, find out what your predecessors agreed to and tolerated, and what they told you themselves. In Kermanou knowledge was proved directly, through the claimant's father. But the Supreme Court noted that long silence in the face of a visible structure "reasonably demonstrates" knowledge. And knowledge can make you a trustee.

If you rely on an old oral agreement. You may have a defence, but not automatically title. Gather the evidence early: witnesses, permits, old plans and surveys. Consider the route to registration separately. If the agreement was a sale, under Odysseos the trust on its own does not create ownership. If it concerns part of a plot, division comes first.

If you are dividing family land. Put the agreement in writing and register it. Kermanou is a family story. The cheapest way to avoid it is a short written agreement and an application to the Land Registry while everyone still agrees.

Quotations from Greek-language judgments are our translation.