Limassol high-rise development damaged flats

claims that high-rise construction ruined flats
Photograph: Cyprus Mail

EIGHT families living in an apartment block in Limassol fear they are living on borrowed time as their building has been deemed too dangerous to live in by local authorities.

Right behind the city’s fast developing coastline where dozens of high-rise buildings are underway, the Mairoza 10 tower on Ithakis street now bears red warning signs from the municipality saying ‘keep out dangerous building’.

Inside, the old building cracks can be seen on the walls and the pillars that support its structure.

On May 30 a letter seen by the Sunday Mail told residents it was a ‘final warning’ and said the building was dangerous for those living in it and for passers-by.

Residents had 15 days to evacuate but should the building collapse, the municipality bore no responsibility, it said.

Apartment owner Demetris Christodoulides told the Sunday Mail the 15 days were up but they had nowhere else to go.

“They tell me it’s too dangerous here. Alright I’ll go but to go where? I tried looking for somewhere else to rent but the prices are too expensive. We have nowhere to go.”

The same view is shared by the other tenants, he said.

The problems, according to Christodoulides began appearing about two years ago when construction for one of Limassol’s luxury high-rise buildings, the Pafilia ‘One’ – set to be the tallest residential seafront tower in Europe, according to their website, with 37 storeys – got underway.

“When they were drilling underground our whole building was vibrating, we could feel everything shaking,” Christodoulides said.

“At first, we thought it was an earthquake. Then we realised what was really going on.”

Christodoulides, who owns the apartment and lives in it with his wife and daughter, is arguing the visible cracks on the building’s columns are a result of the vibrations of the drillings related to the construction of the high-rise building just in front of their home.

“We know the building was old. We know it has problems. We’re not complaining about its deterioration. We’re talking about the very obvious cracks around the building that are putting it in danger of literally collapsing.

“The local authorities have so much money to spend on the carnival. And for us, they have nothing.”

Approached by the Sunday Mail to comment on the case, the Limassol municipality was not immediately available.

Someone close to the case from the municipality however called the idea that the damage was a result of the construction “laughable”.

In their own statement, Pafilia said they were closely monitoring construction “through specialised instrumentation and definitely no vibrations are caused or recorded from the construction of One Tower.

“Vibrations with possible consequences can be caused in the case of using heavy vibrating rollers and other machinery in infrastructure projects (roads) which is not applicable on a residential development.”

Though Christodoulides is pleading with the municipality and the developer to help them find somewhere to stay, he says he is prepared to take the case to court.

How far it will go though is a difficult to tell. The building was built after the Turkish invasion in 1974.

Residents know the rules and regulations were not strictly adhered to at the time, particularly as there was a rush to set up places for people to live.

In addition to that, lies the simple fact that the building is old. How can residents prove the damages to homes are a result of the construction not the inevitable result of time, even possibly exacerbated by the construction?

His plight has also come to the attention of the Limassol active citizens’ initiative, a group of local residents who say they are against the way tall buildings appear to be cropping up everywhere without a long-term plan in sight.

“We’re not against developments,” members of the group told the Sunday Mail.

“We want tall buildings, we want developments but we want it done in a way that is proper and sustainable.”

Last month Interior Minister Constantinos Petrides said in the first three months of 2018 alone, the government issued building permits for 25 high-rise buildings and 60 more are pending, most of them in Limassol.

The initiative fears that this is being done too quickly, without any long-term plan in sight and with complete disregard for Limassolians.

Already rent prices are going through the roof and finding an affordable place to stay is becoming exceedingly difficult.

“These apartments aren’t for the public good. They’re not going to help people find a place to stay,” the group said.

Instead they’re seen as expensive apartments locals can’t afford that will become ghost towers as investors make use of the citizenship-by-investment scheme, allowing foreign investors to acquire a Cypriot passport by investing €2m in assets or companies, including real estate.

“Are we all second-class citizens because we haven’t bought a passport?” the groups asked.

The initiative has launched a petition calling “for the immediate freezing of all licensing procedures for high-rises” until a general spatial plan and a strategic environmental impact study for high-rises are drawn up and evaluated. “At the same time, we call for the inclusion of public consultation in all cases of high-rise licensing procedures.”

They argue the tall buildings should be built in a dedicated area with the infrastructure to support it, ideally towards the outskirts and not on the coast.

The structure of the city should resemble an amphitheatre with taller buildings in the back and shorter ones in the front, unlike the way it looks now and is expected to look in the next few years, two members said.

Countering arguments that tall buildings block the view of the sea, the interior ministry argues that the effects are on the contrary worse when the buildings are lower and wider as opposed to taller and thinner.

Though Petrides did not wish to go into detail over the benefits skyscrapers may have, he pointed to a framework posted on his ministry’s website of “general principles and preconditions for the construction of high-rise buildings with clear documentation of the town planning method followed during the assessment of the applications”.

Residents however do not feel it accurately reflects reality as it outlines a high-rise building must be in an open space so as not to have consequences on neighbours.

The blocked view and sunlight, along with the fear of being cast in shadow makes residents feel differently.

Moreover, little thought has been given to the effect construction has on the beach, according to Greens MP Charalambos Theopemptou.

Those near the construction sites often see that as drillings go on, water from underground comes to the surface.

This water is then dumped into the sea through a pipe, Theopemptou said. Not deep into the ocean but very near the shore.

“It’s not just one tower. We’re talking about a few dozen. So we’ll have this going on for about two years as construction continues.”

Theopemptou clarified this isn’t just plain water. It has mud and thin grains of sand. As a result, the sea becomes more opaque and anything alive in the sea will die.

“Fish don’t give birth in the air,” he said.

Nonetheless, the environment department has gone ahead and given construction companies the permit to do this when other options were readily available, Theopemptou said such as dredging which had been carried out in the past for other projects at the harbour and marina area.

Additionally, a craft could have been used to dump the water further out to sea.

“They need to study the consequences first and then approve not vice versa.”

Nonetheless, the environment department told the Sunday Mail they had studied the issue extensively ensuring that dewatering “should be done at an appropriate water depth, taking into consideration the precautionary principle and reassuring the least environmental impacts to the marine environment.”

It did not specify what exactly it deemed to be appropriate.

Theopemptou said the temperature of the city would also get warmer as the heat island effect is exacerbated.

With a close eye on the beach year round, the winter swimmers’ association has seen changes. The group’s leader Ermoula Stylianidou told the Sunday Mail they have lately noticed the beach is getting more and more filthy and the sea opaque.

Though Limassol’s beaches the past few summers have been found to contain awful waste, “the situation is now out of control. People swim and walk on the beach for health benefits. Now we’re seeing the opposite. They’re getting infected.”

At the rate things are moving, no obvious end appears in sight. The initiative comprised of Limassol’s active citizens argues the true beneficiaries are the developers and legal offices benefiting from the passport scheme.

Hoteliers on the other hand are concerned according to Theopemptou that the investors will use the apartments as short-term lets on services such as Airbnb.

As one member of the initiative put it: “Everyone is looking out for their own interest and not the public good”.

Cyprus cooperative bank investigation (Update)

Cyprus cooperative bank investigationATTORNEY general Costas Clerides is to appoint an investigative committee to look into the Cyprus Cooperative Bank following allegations of mismanagement that led the government to take control of the bank and sell most of its assets to the Hellenic Bank.

Clerides told the Cyprus News Agency that he has instructed the setting up of a committee that will investigate the situation in which the bank now finds itself.

Following the attorney general’s announcement, Government spokesman Prodromos Prodromou said that President Anastasiades has suggested the investigation to Mr Clerides. The President’s proposal is to call foreign experts with knowledge of the issue to provide the investigation with more credibility.

Prodromou advised that the committee will investigate why €7.5 billion in loans were handed out, which are now non-performing adding that loans made by politicians as well as Cooperative Bank executives will be investigated.

He also cited political intervention in the management of the bank.

The general director of the Cyprus Cooperative Bank, Nicholas Hadjiyiannis, said that the bank was not given enough time to restructure its non-performing loans, noting that this was due to an amendment of the European Central Bank’s monitoring framework.

In remarks to the Cyprus Broadcasting Corporation (CyBC), Hadjiyiannis stressed that the bank’s situation had been made increasingly difficult with more than 100,000 customers refusing to pay their loans as well s many withdrawing their deposits.

He referred to the ways loans were handed out and overestimates on properties, which cost the bank €60 million and which is now being tried in court.

He added that only the mass buyouts of homes would have saved the bank, but this would have had massive social consequences.

Update Friday 22 June

According to Kathimerini Cyprus, CCB on Friday froze accounts with deposits over €2500 in cases where owners either have delinquent loans or have defaulted on their terms causing the bank to have an unresolved Non-Performing Loan (NPL).

The move is not connected to the recent deal with Hellenic Bank taking over the healthy part of the CCB, according to sources within the bank.

On the contrary, those sources said the freeze was in the works for some time and it was scheduled to be rolled out in the near future.

But it appears that the Hellenic deal accelerated the process.

Non-performing loan laws inefficient

Cyprus non-performing loansONCE again Cyprus has been admonished for its ineffective efforts to reduce the high levels of non-performing loans (NPLs) in its banking system.

It its annual report the European Stability Mechanism (ESM) says that “Although the necessary legal frameworks aiming at reducing non-performing loans are now in place, they are still inefficient and little used.

“Instead banks are more and more in favour of offloading impaired assets from their balance sheets, mostly via debt-to-asset swaps, which deliver NPL reduction in the short-run.”

And points out that their approach “leaves banks with significant exposure to the real estate sector.” And that “Furthermore, new regulatory requirements challenge the banks’ outlook.”

The ESM concurs with other EU institutions and the IMF, which also consider that the foreclosure legislation passed in 2014 is ineffectual and needs reform.

In its annual report the ESM stressed that “To boost economic resilience, the country [Cyprus] needs to consolidate public finances by further reducing public debt and counteracting the concentration of economic activities by diversifying from the tourism and construction sectors.”

And that “Despite successive reforms, Cyprus must regain reform momentum to enhance the efficiency of the public sector and judiciary, while supporting fiscal sustainability.”

On a more positive note the ESM acknowledged that “Cyprus has achieved a solid recovery over the past few years.

“Cyprus enjoyed its third consecutive year of growth in 2017, outperforming most of the euro area. Cypriot public finances improved, supported by fiscal prudence and better-than-expected economic developments.”

Further reading

ESM Annual Report 2017 (Cyprus chapter)

Management committees fall foul of law

AS REGULAR readers will be aware, Management Committees are responsible for the management and administration of communal areas in apartment buildings and residential units in some other types of building complexes in Cyprus.

Management Committees collect communal expenses from the unit owners to operate, insure, maintain and repair the communal areas such as: entrance foyers; stairwells; lifts; external walls; and common facilities such as swimming pools and tennis courts. Committees invariably open bank accounts to manage these expenses.

Although the law and regulations governing the management of buildings under joint ownership works well in cases where everyone pays their communal expenses, it is hopeless in situations where owners refuse to pay. Reform of the law is urgently needed to enable committees to better deal with these situations.

But a new problem has recently come to my attention, which results from legislation introduced in 2017 governing associations, foundations, clubs and federations. This has resulted in banks freezing the accounts of some committees.

Although this law was never intended to affect committees, for reasons best known to themselves, some Management Committee have opened bank accounts with a name that includes ‘Residents Association’ and this has brought them into conflict with the 2017 legislation.

By calling themselves an ‘Association’ rather than a ‘Committee’ they are required to provide the bank with their ‘Articles of Association’, which has been approved and stamped by the Interior Ministry and other information as required by the law. As they have been unable to supply this information, some banks have frozen their accounts.

If you are a member of such a Committee, I suggest you visit the bank and resolve the problem. If you are in the process of establishing a Management Committee do not, under any circumstances, try to open a bank account that includes the word ‘Association’.

(I am currently the Secretary of the Cyprus Third Age Association (C3A), which is one of many thousands of U3As around the globe that gives members the opportunity to make new friends, pursue their interests and participate in a range of activities through regular meetings and special interest groups organised and run by members.

Like all the other Associations in Cyprus we have been affected by the legislative changes, but the impact on ourselves has been minimal.)

Passports scheme could bring Dutch disease

Cyprus passports scheme could bring Dutch diseaseTHE FISCAL Council is warning that the passports-for-cash scheme could mean that some sectors of the economy could suffer while others grow, a phenomenon known as the Dutch disease.

In its Spring 2018 report, the Fiscal Council says that the current growth in sectors associated with big foreign investors could lead to the transfer of resources away from other productive sectors of the economy.

Investment hypes are short-lived

The council, which is charged with issuing public warnings to avoid a fiscal derailment in the future, said in its report dated May 30 that the citizenship programme in Cyprus is associated with foreign investment that is based on factors that could change later on.

Favourable external factors, loose monetary policy from the European Central Bank (ECB), and a number of investor programmes are expected to run their course and could be significantly limited according to the fiscal council.

The citizenship programme has come under fire, citing fears that real estate prices are driven up so much that it could create a bubble down the line

The report also includes a warning of an imminent Dutch disease, where some sectors of the economy end up suffering due to high administrative and operating costs while others grow.

The citizenship programme has come under fire from critics in Europe but also some circles on the island, citing fears that real estate prices are driven up so much that it could create a bubble down the line.

While the programme is designed to draw in millions in investment and development money in exchange for citizenship to individuals who make a lasting business commitment to the island, many reports from local and foreign media have pointed out a major loophole which allows investors to give up their business interests in Cyprus years later but still keep their EU-wide passports.

The fiscal council is concerned that the reform momentum may have been diminished during a time of positive growth, warning that it is better to do the hard work now rather than waiting for a crisis to force reform upon a fragile economy.

“Reforms should be an ongoing process that would cover all sectors of the economy,” said a statement by the fiscal council.

Source: Knews

Further reading

Cyprus Fiscal Council Spring Report 2018

Rent scam suspects detained in Limassol

Rent scam suspects detained in Limassol
Limassol District Court

TWO PEOPLE in Limassol are behind bars on suspicion they were renting out a property that did not belong to them, defrauding tenants by pocketing €800 each month and then disappearing.

According to police, two suspects aged 22 and 20, were arrested Sunday following complaints by lawful tenants who were renting a home in Moni village.

The tenants were paying €800 rent each month for the last four months. After realising the two suspects were doing something wrong, they got frustrated and called the police.

On Monday the Limassol District Court ordered the two suspects be remanded in custody for four days.

Officers at Moni police station are in charge of the ongoing investigation.

Source: Knews