Who is parliament trying to protect?

Nigel Howarth
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Who is parliament trying to protect?

Who is parliament trying to protect?THE DECISION of the House Finance Committee not to put the ‘hidden mortgage’ bill to a plenary meeting of the house before the summer parliamentary recess has been slammed by Interior Minister Socratis Hasikos.

The bill, which was submitted by the government in June, is designed to resolve the situation where those who have bought property are unable to get its Title Deed because the land on which their property was built was mortgaged by the developer who is unable or unwilling to settle the debt, or the transfer has been blocked because the developer owes taxes to the state.

But despite MPs agreeing that these trapped home buyers should be protected, the House Finance Committee decided not to put the bill before parliament for a vote before the summer recess; the delayed ‘hidden mortgage’ bill will now be debated and voted on at an extraordinary plenary session of parliament to be held on 3rd September.

The ‘hidden mortgage’ bill enables the buyer or the seller of the property (who has deposited the relevant contract of sale at the Land Registry), the mortgagee of the property, the lender under the loan agreement with the buyer, the director of a committee to be established by the cabinet, to request the transfer of a property to its purchaser.

The Director of the Land Registry will then review the transfer request and may request evidence enabling him to decide whether the request is legitimate. If the ‘trapped buyer’ has not paid the full sale price, the Director will invite them to deposit the balance of the purchase price into a special account.

(The actual evidence that may be requested and the procedure for opening a special account to hold any remaining sale price is to be established by the cabinet.)

If a person does not comply with this request for evidence within a specified period, the Director may impose a fine on them of up to €10,000 and a further €100/day until the requested evidence is supplied. But before imposing a fine the Director will advise them of the reason for imposing a fine and request that they make representations to him within 30 days.

Interested persons – the buyer, seller or mortgagee, and those with encumbrances and prohibitions may complain to the Director in cases where (a) The buyer/seller have not completely fulfilled their contractual obligations or (b) the contract of sale between the buyer and seller is invalid.

Assuming all goes well, the Director will invite the buyer to pay the Property Transfer Fees within 30 days. If the buyer fails to pay the Property Transfer Fees within 5 days after the 30 days, the Director will transfer the property into the name of the buyer and will lodge an encumbrance against the ‘new’ title for twice the Property Transfer Fees – or if the purchase is the subject of a loan, the lender may pay the transfer fees.

‘Hidden mortgages’ may be transferred to other property owned by the seller or guarantors. (I understand that the Association of Cyprus Banks objects to this claiming that it will cost the banks €1 billion.)

Pissouri report this month

Andria Kades
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Pissouri report this month

pissouri_housing_initiative-_groupA TEAM of geologists should have a study on the Limni area in Pissouri ready by the end of this month looking into how to combat the land slippage problem, according to Animal Party head Kyriakos Kyriakou.

Although the interior ministry could not confirm this, it recently announced it was investigating the matter and looking at measures it could implement such as expanding infrastructure that channel rain water away from the area and drilling new wells to monitor the underground water.

“Three homes have already been demolished, while new cracks appear every day at the others,” said Kyriakou, who is involved in the Pissouri Housing Initiative Group (PHIG). Homeowners have appealed to the government for help as several houses sustained structural damage due to land slippage such as cracks in interior and exterior walls, swimming pools, roads, pavements, footpaths, retaining walls, drains, water pipes and other infrastructure.

“Each new crack sounds like shooting that can shake us out of bed in the night and every morning we inspect every inch of our homes to see if the cracks and rifts have grown.”

About 50 homes have been affected and in the meantime, they are in a race against time wanting to know when and how their problem will be dealt with.

“We fear that the summer drought will lead to further subsidence of the ground and we fear that the next rain will penetrate the already affected foundations of our homes.”

The ministry said the problem in the Pissouri area was mainly due to the underground water, which is close to the surface, 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 landslide in the wider area,” the ministry said in a written statement. “The ground morphology does not allow the water to escape, as the area’s name ‘Limnes’ (lakes) denotes.”

Editor’s comment

I attended the meeting yesterday where we heard from Peter Field, the chairman of PHIG, that a Cypriot family with young children could be made homeless in a matter of weeks if the problem isn’t rectified.

Mr Kyriacou advised that he had spoken with the chairman of the relevant parliamentary committee, Dr Adamos Adamou MP. He is aware of the issue and will be visiting the area next week to see for himself the problems and talk to the group. Dr Adamou has given his assurance that the matter will be discussed by the Environmental Committee by the end of September.

The British owner of one of the houses I visited said that they’d had no problems until February this year when a large sinkhole appeared overnight in their front garden. Since then cracks have opened up in many of rooms of their house, which continue to to expand. She told he how she lay awake at nights listening to the sound of her house groaning and cracking.

The Cypriot owner of a recently built property told me how her house had started to sink and that she was in litigation with her developer to recover her money having discovered that her property had been built on on a ‘lake’.

A report from the Ministry of Agriculture, Natural Resources and Environment to the Pissouri Community Council some years ago recommended the construction of a suitable drainage system for rainwater, which will cover the whole “Lakes” area, together with possible other flood control projects.

This recommendation was never implemented.

September vote on hidden mortgages bill

Editorial
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September vote on hidden mortgages bill

hidden mortgagesAN EXTRAORDINARY plenary session of the parliament has been scheduled for September 3 in order to satisfy a Troika demand for the voting of a bill addressing the issue of home buyers ‘trapped’ in mortgaged properties by that date.

In light of this decision, the exemption of such cases from foreclosure legislation until year-end – voted by the House – has been amended to September 5.

Interior Minister Socratis Hasikos slammed parliament last Friday for shelving a government bill designed to protect house buyers without title deeds.

The bill, submitted by the government in June, was meant to sort out the mess created by the failure to provide title deeds to people who paid for the property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

Last Thursday, parliament apparently decided to kick the can down the road, despite the universal demand by political parties for the government to resolve the problem.

Troika starts seventh review

Nigel Howarth
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Troika starts seventh review

cyprus-troikaA DELEGATION from the troika of Cyprus’ international lenders started a crucial quarterly review of the island’s economic adjustment programme yesterday focusing on banking issues and public sector reforms.

Sources said that the troika team, which visited the Central Bank headquarters yesterday morning, discussed progress in implementing legislation concerning the repossession of mortgaged properties and the sale of loan packages to third parties.

Other members of the troika team discussed privatising state assets and introducing a general health system to replace health care provided by state run hospitals.

Opposition parties, which have the majority of seats in parliament, vehemently oppose the selling off of semi-governmental operations providing telecommunications and electricity.

The introduction of the general health system has been postponed several times and is likely to be put off again following the resignation of the health minister Philippos Patsalis who cited health reasons for his decision.

Tomorrow (Thursday) the troika team are expected to discuss the Title Deeds backlog and the issue of home buyers who are unable to get a Title Deed due to their developer’s ‘hidden mortgage’.

Further delegates from the troika are expected to arrive in Cyprus next week.

The review is scheduled to last 10 days rather than the previous five-day reviews.

Aristo trial court ruling July 28

Editorial
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Aristo trial court ruling July 28

THE COURT’S ruling on the Aristo trial – a suspicious land-development project in Skali, Paphos – will be issued on July 28, presiding judge Dora Sokratous said on Monday, following the prosecution’s closing arguments.

During Monday’s hearing, state prosecutor Ninos Kekkos argued that the defendants – Aristo Developers, founder Theodoros Aristodemou and wife Roulla, the company’s draftsman Christos Solomonides, and former Paphos municipal engineer Savvas Savva – conspired to defraud the public in a land-zoning project of land to be turned into 177 residential plots by reducing the legally-designated green areas.

In order to bring their illegal plan to fruition, Kekkos said, they committed the crimes of forgery – of Land Registry plans and the project’s planning permit – as well as the circulation of forged documents, and securing a building permit under false pretences.

He added that Aristo and the Aristodemou couple were aware of the ownership status of streams, a church, and public roads located within the land under development, which they claimed had been their own property.

Kekkos argued that, although Savva was aware of the Water Board’s view that the stream was not part of the green areas allotted to the development – 18 per cent of the total area under development – he never disputed the blueprints submitted by Aristo, which categorised the stream as a green area.

He added that a blueprint scaled smaller than legally prescribed, the existence of which the defendants denied knowing, was found and seized by police at Aristo’s offices.

According to the state prosecutor, the company purposefully avoided disclosing the net area of the 177 residential plots it planned to develop on the blueprints it submitted with its application for a permit, resulting in a Paphos municipality technician incorrectly transcribing the area given by the company in a letter accompanying the application.

With regard to the alleged bribery of Savva by Aristo and Aristodemou, the prosecution argued that, according to police investigators’ findings, Aristo’s founder cashed a cheque for €20,000 in €500 notes in August 2010.

Two days later, Savva was found to have deposited the same amount, in notes of identical denomination, to his own bank account. Another witness had Savva paid an additional €5,000 from Aristodemou.

The prosecution argued that these sums were paid to Savva as kickbacks for his contribution to furthering the defendants’ joint illegal cause.

In closing, Kekkos argued that the way Aristodemou attempted to present his company’s robustness, by stating that it had made sales of €800 million in the last decade, simply aimed at creating the illusion of prosperity.

Had Aristodemou wanted to disclose the real picture, Kekkos argued, he would have also informed the court of the company’s debt, liabilities, and liquidity.

Crocodile park protest tomorrow

Editorial
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Crocodile park protest tomorrow

Cyprus-crocodile-parkTHE ANIMAL Party will stage a protest on Tuesday outside the ministry of agriculture and environment against the creation of a crocodile park in Cyprus.

The protest will take place at 11am.

A joint Israeli-Cyprus venture is seeking permission to set up a crocodile park despite the controversy it has stirred up over the past year when the news first emerged.

The application by TSA Crocopark Ltd, which is being discussed by the Environmental Impact Assessment committee, reduced the number of Nile crocodiles from the originally proposed 1,002 to about 170-220. Under the proposal the site would be located off the Nicosia-Limassol highway near the Choirokoitia exit.

The Nile crocodiles would come from Fatzael Crocodile Park in Israel which was closed down after 70 creatures escaped in 2011 causing mass panic in the area. Residents of Psematismenos and Tochni had refused to consider the matter last year when it was first raised last year.

The Animal Party said on Monday the message they wanted to send the minister of agriculture was clear. “We will not let the minister to turn Cyprus into a vast zoo,” a statement said.

“The majority of citizens are against these developments while you insist in dolphinariums and parks, a crocodile slaughterhouses and introducing every kind of exotic animal,” it added, also making reference to the Siberian tigers recently acquired by a Nicosia zoo, and two Asian elephants at a Paphos zoo.

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