Government to pay for Pissouri mess

INTERIOR minister Socratis Hasikos attributed responsibilities to surveyors on Thursday as regards damages to homes in the Limnes area of Pissouri due to land slippage and said that the government will pay for their mess.

Speaking at the House interior committee, Hasikos said that surveyors made “frivolous approaches” when studying on the suitability of the soil in the area before building houses, and that now the government “is called to address the issue”.

“Pissouri houses were damaged because the subsoil somehow was not solid enough to build on safely,” Hasikos told MPs, “so we got to where we are today, as many houses have been damaged”.

Limnes residents had been urging the government for several months to seek solutions to prevent the 60 homes from collapsing, the House interior committee had heard in September.

Several houses have sustained structural damage including cracks in interior and exterior walls, swimming pools, roads, pavements, footpaths, retaining walls, drains, water pipes and other infrastructure.

An earlier announcement by the interior ministry had said that the land slippage was mainly due to the underground water, in combination with the geological conditions of the area. The ground, up to a depth of 16 metres, is made up of loose material that came from past landslides in the wider area, and the ground morphology does not allow the water to escape.

“The area from the name alone ‘Limnes’ according to me should have been prohibitive to someone to proceed with building, unless they take all those engineering measures to ensure that the infrastructure is built on solid ground,” Hasikos said.

Asked whether the government bears responsibility, he said that when that area was designated as residential there was no legislation to compel the state, or the interior minister, to conduct surveys before it is classified as residential.

“A (specific) law was voted at a later stage. The surveyors had then, as they do now, the responsibility to conduct studies whether what is about to be built is safe,” Hasikos said. “There are responsibilities, yes”.

He said that his ministry is waiting for a report to see how the government can help the affected residents. He added that state services were allocated a budget to take preventive measures and at a later stage to safeguard the homes.

As regards restoration work, he said that “we are talking about a lot of money, but I cannot say numbers at the moment”.

MPs however, attribute responsibilities to the government as well.

Committee chairman Yiannos Lamaris said that the situation was created due to insufficient actions and surveys, but also with the contribution of the state that issued the relevant permits.

He agreed with the government’s move to identify the problem through a scientific study but also through satellite images.

Lamaris said that the costs for the restoration of the whole area to the degree that it is no longer deemed as dangerous will be very high, probably up to €20m.

He added that on Monday officials from the Limassol district office will visit the area and that Hasikos pledged to visit the area at a later stage and meet with the residents.

DISY MP Andreas Kyprianou said that the problem lies in that the state did not inform surveyors properly and in time of problems of the subsoil in the area, and surveyors, when the foundations of the houses were been dug, did not take any measures to address loose soil and cases of accumulation of large amounts of water.

Hourican disappointed by shenanigans

John HouricanLAWMAKERS have let bailed-out Cyprus down at times, the outgoing chief executive of the country’s biggest bank said Wednesday, adding that “shenanigans” which delayed key laws aimed at helping banks collect on a huge number of bad loans have left him disappointed.

In a scathing critique of Cypriot legislators, Bank of Cyprus CEO John Patrick Hourican said it’s been “embarrassing” for him to explain abroad actions that had delayed and diluted a key foreclosure law that was passed last year.

He said in an interview with The Associated Press that the law is neither strong enough nor its implementation swift enough, hampering the bank’s ability to boost lending and getting the economy growing faster. Legislative gaps — like where auctions on foreclosed property will be held — remain a stumbling block.

The Bank of Cyprus was at the centre of a March 2013 multibillion euro rescue deal that forced a seizure of uninsured deposits in the country’s two largest lenders and shuttered the smaller bank.

Although Cyprus has earned plaudits for sticking to its rescue program’s terms, creditors point out that bad loans remain the country’s No. 1 priority. Around half of Bank of Cyprus’ 24 billion euros ($25.6 billion) worth of loans are sour, Hourican said.

Hourican said Cyprus was “poorly treated” by its European Union partners and called the deposit grab a “cardiac arrest” of such scope that confidence in the Cypriot banking system will take many years to fully restore.

Hourican, who took the job in October 2013 and helped put the deeply ailing bank on a firmer footing, conceded that lawmakers have done their bit to satisfy creditors’ demands. But “populist” rhetoric is prompting some borrowers to hold back from repaying what they owe on the impression they can get a “better deal.”

“The parliamentarians have decided heading into an election year that it’s good to raise populist measures and what they’re doing is driving up delinquencies and not helping us fix them,” Hourican said.

“I would like some maturity and responsibility taken in helping the country driving its legislative agenda, recognizing that depositors of this bank are the victims at this point in time, whether you like it or not.”

Cypriot President Nicos Anastasiades will plead with bank chiefs Thursday to tackle the bad loan issue more quickly.

“Now we can provide credit to the economy … but it will be turbo-charged by people meeting their obligations,” Hourican said.

© 2015 Associated Press

Reduced VAT for home renovations

Reduced VAT for home renovationsPRESIDENT Nicos Anastasiades announced on Wednesday, that the government intends to lower VAT for renovating housing units from 19 per cent to 5 per cent.

Speaking at the 88th Annual General Assembly of the Cyprus Chamber of Commerce and Industry in Nicosia, the President said that the decision to reduce VAT was taken following a proposal from the island’s business community.

The reduced rate of VAT will apply to renovations carried out on all housing units and not just primary residences, which has been the case until now.

The President explained that vulnerable consumer groups and residents of remote communities will also benefit from lower VAT when repairing their homes to upgrade their structural adequacy or to improve their energy efficiency.

The proposal is expected to be ratified at the next meeting of the cabinet.

Building permits August

THE NUMBER of building permits authorised during August 2015 stood at 312 compared with the 298 authorised in August 2014; an increase of 4.7%, according to the latest figures from the Cyprus Statistical Service.

Compared with August 2014, the total area of these permits fell 12.0% to 41,428 square metres from 47,060, while their value fell 9.0% to €44.2 million from €48.5 million.

During August, building permits were issued for:

  • Residential buildings – 217 permits
  • Non-residential buildings – 56 permits
  • Civil engineering projects – 10 permits
  • Division of plots of land – 24 permits
  • Road construction – 5 permits

During the first eight months of 2015 the number of building permits authorised for both residential and non-residential projects has fallen by 0.6% to 3,286 compared with the 3,307 authorised in the same period last year, while their value has risen by 21.7% to €685.7 million and their area has increased by 17.0% to 589.0 thousand square metres.

New home construction

The 217 residential building permits approved in August provided for the construction of 199 new dwellings comprising 111 single dwellings and 88 multiple dwelling units (such as apartments, semis, townhouses and other residential complexes).

This is a fall of 12.3% compared with August 2014 when building permits were issued for the construction of 227 new dwellings.

There appears to be a move away from the construction of small holiday homes and holiday apartments to residential properties, with the average area of a dwelling rising to 218.6 sqm at the end of August.

Cyprus building permits August 2015

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

URGENT notice – trapped buyers

ALTHOUGH more than 4,000 ‘trapped buyers’ have applied for their Title Deeds under the provisions of the ‘hidden mortgage law‘, many have been discouraged from doing so by inaccurate statements posted on the Internet.

These statements, which claim that “property buyers in Cyprus that bought by way of a housing loan are NOT offered title deeds whereas those that paid ‘in cash’ are finally being offered their deeds”, first appeared on an Internet forum and have been promulgated on Facebook and other social media sites.

Despite an exchange of correspondence with these people in October, they continue to promote their misguided views. Their reasons for doing this are unclear, but it appears that one of the perpetrators may be operating an unlicensed estate agency selling property in the Protaras area. This may be a ruse to drive traffic to his website.

I would like to assure everyone who has been deceived into believing that they cannot apply for their Title Deeds if they bought by way of a housing loan that:

If a purchaser wishes to apply for the Title Deeds to the property they purchased, the only requirements are that:

  • their contract of sale has been deposited at the Land Registry
  • they agree to deposit any outstanding financial obligations to the vendor into a suspense account set up by the Land Registry. (e.g. In their contract, some people were able to hold back a few thousand Euros until the Title Deed was available for transfer – they have to agree to deposit this money with the Land Registry.)

The fact that they have a housing loan is of no relevance.

You’ll find the application form and other information in the article ‘Applying for Title deeds‘.

Troika concludes eighth review

FINANCE Minister Harris Georgiades announced on Friday that Cyprus has completed the eighth review of its economic adjustment programme, but warned that reforms must continue to improve the island’s economic performance.

Mr Georgiades anticipates that the eighth review will be the last and will be completed formally in mid-January after a Eurogroup meeting, which will be followed by the disbursement of a further tranche of the bailout loan.

It seems that a delegation from the troika of the island’s international lenders may not have sufficient time to carry out a further review before Cyprus exits the economic adjustment programme on 31st March 2016.

Prior actions

The troika has set four conditions (prior actions) for releasing the next bailout tranche:

  • Parliament has to adopt the bill relating to the creation of a new state-owned telecommunications company.
  • Cabinet approving the bill regulating CYTA employees labour issues.
  • Cabinet deciding the manner and format of the unbundling of the Electricity Authority of Cyprus (EAC), on the principles set out in the third EU energy package.
  • Confirmation by the troika of the loan sale bill that was adopted by parliament on 12th November 12 is to their satisfaction.

I have no news on the various outstanding property-related issues but will update everyone as soon as the information is available.