The long fight for a building permit

Cyprus building permit bureaucracyI FIRST applied for a building permit to Strovolos municipality in early September 2018. In October, I enquired about the progress of my application and was told that the technician handling it was on a month’s leave. I contacted her in November when she expressed surprise that I expected an answer within 2018 as she had such a “huge workload”.

It’s not me!

I called the lady again in January when she then claimed that she was not the one handling my case and that she would ask the technician assigned to it to call me back. Perplexed, I contacted the municipality’s receptionist who confirmed that she (the one who had denied it) was in fact the one handling my application! Needless to say, no one called back.

Six months had passed when I wrote a rather indignant email to the mayor to protest – hinting at legal action – as further attempts to contact the technician had been unsuccessful. The mayor did not deign to respond, but one and a half months later a different technician called me to say that he had been the one handling my application from the beginning.

It’s your fault!

He informed me that my application number had changed, adding that the delay was partly my fault as I had stated the wrong case number on my email. He also mentioned that they had not realised that I was so desperate to obtain the permit!

He said he would be able to examine my application within a month and then asked me whether I wanted him to go ahead or not, implying that if I proceeded with legal measures as I had warned in my email, he would not examine my application.

It was obvious that we were getting nowhere any time soon, so in a second email and after eight months had passed, I explained that I would inform the press of their behaviour unless my permit was issued without further delay.

The only response I received was from a member of the municipal council who tried to find out which newspapers I was in contact with and thought appropriate to inform me that another council member had plates (they knew people in high places to shield them from scrutiny). Two days later, the technician called to inform me that he had examined my application but gave no indication as to when a permit will be issued.

Excessive workload!

The municipality claims that they are unable to cope with the volume of applications, but this is not borne out by the facts. For example, according to the most recent publicly available data, in 2016 Strovolos municipality issued 260 building permits of which only 124 concerned residential buildings up to 900m2 or four storey buildings. The remaining 136 concerned non-residential permits, that is larger buildings/auxiliary constructions/extensions /pavements /change of usage, etc. Clearly, a significant percentage of these permits did not require much time to examine. Yet, this is how much was produced in that year, even though 20 technicians work at the municipality.

According to the statistical service, in the urban area of Nicosia (all eight municipalities) 1,485 building permits were issued in 2018 (increased by a total of 538 since 2016). However, these also include auxiliary buildings, extensions and change of usage.

The number of permits by municipal area has not yet been officially released but even if we assume a 100 per cent increase in permits issued by Strovolos compared to 2016, the long delays still make no sense.

The serial number that was given to my September application i.e. 227/18, no doubt reflects the number of applications that were submitted up to September 11, 2018 and does not suggest a building boom. The manipulative effort to convince me that this number had changed is nothing else than an idiotic attempt to conceal the obvious, and likely happened because of the doubts expressed in my email.

Interior Ministry directives ignored

The time currently required for issuing a permit is unacceptably long. Even more scandalously, the municipality blatantly ignores the two directives in force issued by the interior ministry that would facilitate the process.

One of them 248/2013 clearly states that building permits for up to four storey buildings, if certain conditions are fulfilled, can and should be issued within 30 working days. In fact, other municipalities, Aglantzia for instance, have adopted and act according to this directive. The Strovolos municipality seems to be operating in a different universe.

The directive stipulates that the 30-day time frame becomes invalid when there are discrepancies in the documentation. It seems that the municipality has taken advantage of this clause to cover their ineptitude. They use it as a distraction by informing applicants of (what they consider) discrepancies, eight months after the submission of the application.

Their policy not only defies the citizens’ right to benefit from the ministry’s directive but also completely disregards the financial burden imposed on applicants through the long delay (rents, increase of building material costs, etc.).

Municipalities report directly to the Council of Ministers and although they follow the Streets and Buildings regulations law, some of them have chosen not to adopt the directives relevant to this law. They are not accountable to the ministry which issued the directive and their status allows them to act as they wish. As the interior minister has pointed out, it is the political parties which object to local government reform.

But what is the reason for these unacceptable delays as the “excessive workload” excuse doesn’t hold up? Is it just ineptitude, or something more sinister?

It’s who you know not what you know

Most people feel that with many state services, you have to have connections to get your job done in a timely manner. In these eight months I have spoken to other applicants for building permits and those in the business (contractors, civil engineers, and even a couple of municipal councillors). The common tenor was that (a) Strovolos municipal services are highly problematic and (b) the applicants with the strongest connections will receive preferential treatment.

Lacking these, the second-best thing is apparently to visit the municipality in person, preferably repeatedly and frequently, and (depending on your disposition) plead with, or pester the technicians involved. Those applicants with no connections will have their applications dealt with in the usual manner, i.e. delayed.

All this is made worse because there is no transparency. The mayor and the members of the council, all members of political parties, seem to feel that the municipality is not accountable to their residents. Government directives and principles of good governance are thereby simply ignored.

The European Code of Good Administrative Behaviour, issued by the European Ombudsman is 28 pages long, but a nice way to summarise its contents is by saying that every action undertaken by the Strovolos municipality in this affair is the exact opposite of what the code stipulates.

European Commission reports “limited progress”

Sadly, but unsurprisingly, the malaise is not restricted to local government. The central government, according to the European Commission’s 2019 European Semester report on Cyprus, has made only “limited progress” in reforming public administration and local government. It points out that the reform of the latter “has been stalled in the House of Representatives since 2015” and that its implementation will benefit the local communities by, among other improvements, “simplifying the process of issuing title deeds and building permits”.

Limited progress has also been made in the reform of the judicial system. As things stand now it would be an exercise in futility to seek judicial redress for the damages incurred through the local authority’s scandalous ineptitude.

The European Commission’s European Construction Observatory 2018 Report on Cyprus also makes interesting reading. It deals among other things with the levels of perceived corruption in Cyprus. And guess what? Special mention is made of the process of issuing building permits.

Cyprus building permit bureaucracy

Property auction process may get harder for banks

Cyprus property auction process may get harderONLY a year after the legal framework behind red loans and the speeding up of the auction process by banks was strengthened and opposition parties are now pushing forward legislation aiming to do just the opposite.

On Friday, a draft bill will be tabled providing that the auction process gets slowed down. In other words, the opposition will now try to get back the weapons granted to banks last year.

Behind the draft bill are centre Diko, the Greens and the Solidarity Movement. But because the proposal does not get the required majority to be approved with the support of only these three parties behind the scenes talks are ongoing. These aim to get main opposition Akel and socialist Edek on board.

The draft bill seeks to change twelve points of the auction process, including the following:

  • Extending the due date from that of the notice of delivery from 30 to 45 days.
  • The appointment of two appraisers should be made from a predefined list at the office of the Land Registry Department’s Director so as to ensure the objectivity of the reports on a property’s market value.
  •  The mortgagee should be able to inform interested buyers over the mortgaged property instead of merely providing information if he/she so wishes.
  • Extending the time that the reserved selling price is maintained at 80% of the market value from 3 months to 6 months.
  • Prolonging the period after the notice that a mortgaged property will be auctioned from 30 to 45 days, so that there is sufficient time from the mortgaged borrower’s side to respond and for the best possibility of securing a sale at reserved prices.
  • Safeguarding the constitutional housing right within the context of an auction in proportion to provisions of basic law.
  • Deletion of the provision for the aggregation of interest and legal expenses as secured by the initial mortgage of a property prior to its breaking up into distinct new mortgages.

At the same time, the three parties argue that the proposed bill aims to eliminate the injustice created by the law and defuse the power of a prohibitive court order. In order to put the break on an auction today, it is necessary not only to issue a relevant court decree but also to register a new application procedure.

© In-Cyprus.com

Cypriot passport investment applications falling

Cypriot passport investment applications fallingNEW APPLICATIONS for investments in exchange for Cypriot passports are on a downward trend, possibly as a result of new stricter rules applied under European Union (EU) pressure, an official involved in the program said on Friday.

Kyriakos Koundouros, director of Interior Ministry’s Town Planning Department, told Cypriot web-site StockwatchCy that the number of new investments is greatly reduced in relation to the two previous years.

“New measures introduced in May by the government to pacify European Union concerns leads to a delay in processing applications and this may lead to fewer investments in exchange for passports,” Koundouros said.

Finance Minister Harris Georgiades, in a rare public announcement on the issue, said in February that between 2013 and the end of 2018 the government approved 1,864 applications, involving transactions totalling 6.6 billion euros.

Most of the investors were Russians, who centred on the southern city of Limassol, and Chinese, who showed a big interest for investment in the western tourist city of Paphos and to a lesser extend in Limassol.

Costas Hadjipanayiotou, director of the Environment Department at the Ministry of Agriculture, said that there are several applications under scrutiny, but added that no new applications have been received so far.

His department is involved in the process as each transaction must pass environmental criteria.

The president of the association of property owners, George Mouskides, said he believed that the downward trend in investing in property is a wider trend affecting investments not only in Cyprus, but also in many other countries.

“The new stricter rules applied since May is probably having a negative effect on those who are interested to acquire a Cypriot passport. But we have to wait until the end of the year to be certain about that,” he said.

Copyright © XINHUANET.com

Trapped buyers law changes discussed

Trapped buyers law changes discussedHOUSE Legal Affairs Committee members on Wednesday began discussing a bill that aims to amend and improve the 2015 trapped buyers law concerning thousands of home buyers in Cyprus left stranded without a title deed.

The MPs are debating article-by-article of the legislative proposal which is set to go before the plenum for a vote by mid-July, before the House breaks for the summer recess.

The bill is being drafted with heavy feedback from the island’s Department of Land and Surveys. The final draft is expected to be discussed on June 25 at an extraordinary meeting of the parliamentary committee.

MPs want to strengthen the trapped buyers bill as much as possible in order to stand against future court appeals by banks, land developers and others involved in these cases, insiders said.

In 2015, parliament passed a law aimed at helping thousands of buyers who had paid for their properties in full but had not been issued with their title deeds because the developers had earlier mortgaged the properties.

Trapped buyers law unconstitutional

However, banks contested the law and won rulings stating it was unconstitutional.

Courts said it violated Article 26 of the constitution, which affords individuals the right to enter freely into any contract.

But in September 2017, a Larnaca court upheld the law, allowing trapped buyers to obtain their title deeds irrespective of the developers’ own commitments to banks. The final say now lies with the Supreme Court.

If the Supreme Court rejects the appeals and accepts the decisions by primary courts, then the procedure will be further blocked.

At the same time, the bill runs against time with legal procedures which are underway abroad as foreign trapped property buyers in Cyprus are appealing before the European Court of Appeals.

If strengthened legislation is adopted then this will help mitigate the financial penalty that may be imposed on the Republic of Cyprus.

Some 31,000 properties are without titles today with thousands expected to never secure them. Meanwhile, out of 17,443 submitted applications from trapped buyers, 6,086 have received property titles.

© In-Cyprus.com

Discussions completed on Airbnb bill

Discussions completed on Airbnb billLEGISLATORS on Tuesday said they wrapped up discussion of a bill regulating the operation of short-term Airbnb-style properties, and hoped to send it to the plenum before the House breaks for the summer recess in mid-July.

MPs came to a consensus regarding the ease with which individuals should be able to rent out apartments in residential buildings.

There had been two schools of thought on this:

  • Under the first, anyone should be able to rent out their apartment. If subsequently the other residents in the building complain about nuisance, a provision in the law would allow them to file their complaint to the junior ministry for tourism.
  • The other school of thought was that permission to rent out an apartment should be subject to the agreement of a building’s management committee or the majority of the apartment owners.

In the end, MPs decided to go for the former.

As it stands, the bill provides for a three-year transition period to be afforded to current Airbnb renters to acquire a VAT number and comply with safety and health regulations – pre-conditions for registering their properties.

The aim is to create a dedicated registry for short-term self-catering accommodation and then taxing that income, bringing cash into state coffers.

Each property thus registered is to be assigned a number, which will be used in online advertising platforms so that punters may know whether the property in question is registered or not.

The bill covers furnished villas, residences and apartments used for tourism purposes.

Earlier, it was heard in committee that there are approximately 40,000 accommodations across the island being used for short-term rentals that are unlicensed and thus not subject to the legislation governing tourist lodgings.

Building permits for more new homes in Cyprus

THE TOTAL number of building permits authorised in Cyprus during March 2019 stood at 522 compared with the 531 authorised during March 2018; a fall of 1.7% according to official figures released by the Cyprus Statistical Service and provided for the construction of 615 new homes.

Compared to March 2018 the total value of these permits rose by 9.5% to €178.3 million. However, their total area fell by 2.8% to 142.1 thousand square metres.

During March 2019, building permits were issued for:

  • Residential buildings – 384 permits
  • Non-residential buildings – 86 permits
  • Civil engineering projects – 17 permits
  • Division of plots of land – 25 permits
  • Road construction – 10 permits

Building permits for new homes

The 383 residential building permits approved in March 2019 provided for the construction of 615 new homes (dwellings). These comprised 285 single houses (compared with 283 in March 2018) and 99 multiple housing units including apartments, semis, townhouses and other residential complexes (compared with 80 in March 2018).

Of those 615 new homes, 284 are destined for Limassol, 180 for Nicosia, 82 for Larnaca, 56 for Paphos and 13 for Famagusta.

Building Permits Issued for the Construction of New Homes
(Number of Dwellings)

Month 2018 (Dwellings) 2019 (Dwellings) Increase/Decrease %age Change
January 476 548 72 15.1%
February
431
576 145 33.6%
March
467
615 148 31.7%
Totals 1374 1739 365 26.6%

Annual figures

During the quarter of 2019, 1,591 building permits were issued compared to 1,515 in the corresponding period in 2018; an increase of 5.0%, while their total value and area increased by 13.2% and 12.7% respectively.

These 1,591 permits provided for the construction of 719 new homes in Limassol, 539 Nicosia, 271 in Larnaca, 178 in Paphos and 32 in Famagusta.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.