Cyprus Property – It should be “No Title Deeds” then “No Purchase” !!
There has been a flurry of articles published recently on the subject of buying a home in Cyprus. These publications have been in the Cyprus Mail Newspaper and a Magazine called “In Touch”.
(How did the Editor of the Cyprus Informer get on the front cover of Fortune? That is another story !!)
If you don’t want to read the whole of this Cyprus Informer article, here is a summary of the risk of loss that you could run if, when you purchase a home in Cyprus, you do not receive the title deeds when you pay money over. If your lawyer has not checked beforehand then there could be a mortgage on it which if it is not removed could ultimately become your liability to pay off. Even then, some lawyers have said that it is possible for the holder of the title deed to mortgage the land after you have lodged a contract for sale at the Land Registry. When you come to sell you might have to pay it off or worse still if the mortgage goes into default then your house could be sold from under you. So the moral of the story is don’t buy property in Cyprus unless you are to receive the title deeds as soon as you have paid any money over to the seller or their agent. The Cyprus Mail has published chilling accounts of what can happen if you do not. The same accounts as televised by Andrew Winter on Channel 4. http://www.girltalk.pcs-net.com/b2/channel-selling-houses/
The authors of the “In Touch” articles are Professor Dr. Andonis Vassiliades & Maria Chimonides both of The Law Office & Research Centre in Larnaca. The Cyprus Informer is conducting a review because both articles are written in a academic style and hard to follow. (It also gives our Editor a chance to add our own comments.)
Here are a few interesting facts that stand out;
- 80% to 90% of all owners of Cyprus properties do not have the title deeds
- when new properties are considered as well, the number without title deeds increases to 95%
This situation is obviously the root cause of the various frauds that some purchasers have suffered and have been highlighted in the Cyprus Press and Channel 4.
Others have been more widely held to ransom by those who retain their title deeds who in turn impose outrageous and fictitious sums which are demanded when the real owner comes to sell; a contract cancellation and transfer fee and immovable property taxes are prime examples.
Vassiliades & Chimonides suggest that there is an historical reason for the title deeds problem. The Turkish Invasion of 1974 caused one third of the population to be displaced from the then Occupied North of Cyprus. It is claimed that the Cyprus Government adopted “a more relaxed approach to housing” in order that those displaced could have new homes in the South. Unfortunately this has led to “the authorities turning a Nelson eye to continuous and blatant violations of building laws and regulations”.
The Cyprus Informer has already written about the very real risks of the Cyprus Property Bubble bursting in the near future. http://www.girltalk.pcs-net.com/b2/cyprus-property-crash/
Vassiliades & Chimonides suggest that it may take a purchaser 8 years or more to obtain title deeds to a property. Part of this is due to the huge and growing backlog at the Land Registry. But it is also due to the delays by the municipalities in issuing Certificates of Completion or Approval which must be issued before title deeds.
Without a Certificate of Approval a purchaser cannot legally live in his own house !!
“No person shall occupy or use, or cause, or permit, or suffer any person to occupy or use, any building unless and until a certificate of approval has been issued in respect thereof by the appropriate authority” [CAP. 96(10(1)].”
And if over that 8 years or more the purchaser has made additions and modifications to their property without permission of the title deed owner and the planning authority then a Certificate of Approval will not be issued until the position is regularised. According to the authorities this includes satellite dishes which require a permit issued at a cost of CYP60. http://www.girltalk.pcs-net.com/b2/fined-shorts-cyprus/
Vassiliades & Chimonides also point out that many properties are subject to mortgages to banks which were not discovered by lawyers acting for the purchasers when the contract for sale was registered at the Land Registry? Why? Because the lawyers were negligent in not searching before the contract was registered? In addition many contracts are devoid of essential clauses and protections. http://www.girltalk.pcs-net.com/b2/contract-contents-buying/
Mrs Jeanette Truscott is a British lawyer who practices in Paphos as part of the Vlamis Law Office who spoke at a recent meeting of the Peyia Community Association. In response to a question Jeanette confirmed “that it was NOT illegal for developers to mortgage land that they had already sold to individual customers.”
Can legal action be taken to obtain title deeds that are being withheld? Yes under Specific Performance but that can only be effective when there are no other complications, anomalies or loopholes in the orginal contract or permissions. http://rochfordessex.net/cl2/titledeeds.pdf
The Cyprus Informer has published a further article on “The Cyprus Property Title Deed Problem” at http://www.girltalk.pcs-net.com/b2/property-tips/cyprus-property-mortgages-land-title-deeds-and-banks/
The British High Commission list names of Cyprus Lawyers. But is not a recommendation or guarantee. A spokesman said “The British High Commission does not vet lawyers”. The list is just one of Cyprus Lawyers who speak English !! Other listings on the British High Commission web site are also just information, not a recommendation.
As The Cyprus Informer has stated in other articles, complaints can be made against Cyprus Lawyers by making a written report to the Attorney General of Cyprus together with a cheque for CYP40. Unfortunately complaints take 2 years or so to be investigated without any guarantee that a complaint may go to a formal hearing. Furthermore it seems that any decision to go to a formal hearing will be made by a lawyer and that the hearing will be in court with the complainant having to meet the legal costs. No surprise that some complainants ultimately decide not to go to a hearing. No Fee – No Chance!! http://www.girltalk.pcs-net.com/b2/property-tips/lawyer-problems/
Georgios Costas Vlamis is an advocate who practices in Paphos and he spoke at a recent meeting of the Peyia Community Association. Of great interest he said in response to a question about the competency of lawyers “that Cypriots society was ‘not yet ready’ for one lawyer instituting proceedings against another.” Says it all really, doesn’t it?
It may be possible to obtain legal aid in Cyprus;
According figures supplied by the Bar Association’s Disciplinary Board to the Cyprus Mail, there have been 98 complaints against lawyers so far this year. Last year there were 107 and in 2005 there were 151 but few have been resolved because of a lack of resources.
How do you find that elusive INDEPENDENT CYPRUS LAWYER that every pundit and expert says you must have? One that is independent of the developer, vendor of land and estate agent? It is a small island and many are related by loose and closer family ties. Go to another town? It is obviously much, more expensive and there is still no guarantee of independence. The Cyprus Informer would recommend getting a written declaration of independence, a clear written statement of fees and don’t forget to provide an instruction letter setting out what you want the lawyer to do. Lawyers may just refer to The Code of Conduct. Still get a declaration, statement of fees and an acknowledgement of your specific instructions. http://www.girltalk.pcs-net.com/b2/cyprus-property-buyers-2/
Can you still purchase property in Cyprus safely? Yes, provided that you brief yourself properly and know that if you decide to take a risk then what you could lose.
But the bad publicity in the UK and Cyprus Newspapers and UK TV is damaging the Cyprus Property Market. Justifiably so and the Cyprus Government must take urgent action to protect annual tax revenues of 200 million alone. Otherwise the bubble will burst for everyone. People will lose homes in the inevitable cascade of defaults, especially if property purchasers do not have their own unencumbered deeds.
Reforms have been proposed by The House Legal Affairs Committee but The Cyprus Informer doubts that the Cyprus Property Market can stand the loss of the huge mountain of credit that is supported by title deeds which have been retained and borrowed against. The Cyprus Central Bank now requires developers to put up more land security for development loans and this itself could damage the viability of smaller development companies. If the reforms go through then the Cyprus Government must steps in and guarantee debt like the UK Government did in the case of the Northern Rock (Wreck) Bank. But that is unlikely and the EU is likely to see that as unfair intervention if it is made direct to the property market and not to the banking sector.
So the Cyprus Informer says to brace yourself for NO CHANGE and if you are purchasing property in Cyprus make sure that you know what you are doing. If you have already purchased and do not have title deeds then get a lawyer to check out if there is a mortgage on your property that is not yours and if so take legal advice on what you can do.
It would seem that the CPAG Campaign is gaining momentum. The Cyprus Informer wishes CPAG every success in obtaining the necessary reforms. http://www.girltalk.pcs-net.com/b2/cyprus-property-pressure/
The advice provided on The Cyprus Informer web site is free – no payment of any kind is requested to access the information. Even though there is no payment required I, the owner and author of this site, ensure that the information provided is as accurate as possible. Sometimes I publicly ask lawyers for legal opinions to ensure that this standard is maintained. This is a link to a page on this site entitled Cyprus Property, Mortgages, Land, Title Deeds and Banks where I have published opinions of two named lawyers.
Cyprus Property Help & Advice Centre™ ® ©The Black Art of Buying Property in Cyprus™ ®
The Cyprus Informer™ ® ©
http://cyprusinformer.eu
Related posts:
- Cyprus Property, Mortgages, Land, Title Deeds and BanksI am pleased to be able to explain in detail the relationship between Cyprus Property, Mortgages, Land, Title Deeds and Banks. Are these mortgages scams? It is important that each instance is considered seperately. Some instances may be scams, taking advantage of a system which can be manipulated to facilitate fraud. But, in Cyprus, we are dealing with a country...
- Property RegulationsThis article has been pulled together from a variety of public domain sources Cyprus became a full member of the EU on 1ST May 2004 resulting in many changes for EU Nationals planning to purchase property in Cyprus:-Cyprus became a full member of the EU on 1ST May 2004 resulting in many changes for EU Nationals planning to purchase property...
- Title Deeds Quote: This article was written by me. Sellers have a habit in stating that "The Property Comes with Title Deeds" as if not having title deeds is a bad position. This is not so in Cyprus and many more property transactions take place without title deeds than with them. If not then the Cyprus Property Market would grind to...
- “Our house in Cyprus is a very very very fine house”Dorian Kokas gives advice and helps foreigners cut through bureaucratic red-tape in Athens. What would the same situation be in Cyprus? This is my contribution to Dorian's story !! Greek Real Estate: Buying Property in Greece & Cyprus Real Estate: Buying Property in Cyprus Our house is a very very very fine house With paperwork so grand And taxmen on...
- Is a Cyprus Property Crash Inevitable? Firstly the Cyprus Government is on a policy strategy to curb the property market in terms of building capacity and prices. The Cyprus Informer article on the Looming Crisis in Banking and the Cyprus Government Policy is here http://www.girltalk.pcs-net.com/b2/cyprus-banking-crisis/ The Cyprus Property Action Group is rightly campaigning for major reforms in the property market so that purchasers get their...
- Cyprus Property Bubble on Verge of Bursting A new Cyprus Law is proposed making any mortgage rank behind a registered contract for sale will mean that banks will want their money back. Once the mortgage is out of the way then Title Deeds can be issued doing away with waits for legal ownership of 10 years or more becoming a thing of the past. Also Contracts with...
- Deposits – Cyprus Property Buying Purchasers are often asked by Developers and Estate Agents to give a cash deposit to, for example, secure a particular property and take it off the market, secure the purchase price or simply show goodwill in the transaction. Often these are declared upfront to be non refundable. We don't agree that this is appropriate because the deposit and all payments should...
- Cyprus Property News Grapevine Magazine on Cancellation Fees “There was shock amongst developers when, for the first time, Paphos District Court ordered a property company to reimburse a British couple monies they were obliged to pay when they sold a house without Title Deeds. The homeowners were never issued Title Deeds and when they decided to sell on their property, had to...
- Property purchase agreementsSales agreements: all you need to know The second in a five-part series that was published in the Cyprus Press and it intends to advise British and European home owners of the differences in purchasing a property in Cyprus. It is not a do-it-yourself guide The Law regarding Conveyancing. This article is an excerpt from the booklet Living in Cyprus...
- Contract Flipping – Much MoreContract Flipping is a situation where a person enters into a contract to purchase a new property off plan but only pays 30% as a deposit before he/she sells it on for a profit. Essentially the speculator is able to leverage the potential price increase in property over the one or two years it takes to complete the property. In...
No comments yet.