Around 28,000 Title Deeds issued since 2009

Editorial
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SPEAKING before the annual general assembly of the Cyprus Association of Real Estate Agents in Nicosia, the minister highlighted the legal and administrative initiatives taken by the government to solve the problem of pending Title Deeds.

“The general assessment of the four bills promoted by government and passed recently by parliament is that they constitute a significant reform of the legal framework governing the legitimacy of thousands of buildings and the issuing of Title Deeds,” said Sylikiotis.

“As a result of the new mechanisms introduced at the Land Registry and the coordinated effort by all relevant services, around 28,000 Title Deeds have been issued from 2009 until now,” he said, adding that the authorities are now able to issue town planning permits for regular developments within three to four months on average.

Statistics

During the first eight months of this year 7,929 property transfers took place compared with the 4,709 contracts for the purchase of property deposited at the District Lands Offices.

Source: Department of Lands and Surveys

The Land Registry’s assessment of the market value of the properties transferred totalled € 1,311,438,600.16; 7.9% higher than the sale price of €1,215,923,351.44 declared by vendors and purchasers.

In a recent article by Antonis Loizou he reports that only 21% of those invited to transfer their property, thereby gaining its undisputed legal ownership, are prepared to carry out the transfer.

Town Planning Amnesty architects and engineers

Nigel Howarth
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SUBMISSIONS of Statements of Intent under the temporary provisions of the Town Planning Amnesty must be accompanied by a sworn statement provided by an architect or civil engineer registered with the Cyprus Scientific and Technical Chamber (ETEK) confirming that the property existed on 7th April 2011.

ETEK has produced a list of suitably qualified architects and civil engineers who can assist with the completion of the necessary application forms and provide sworn statements. The list includes a total of 168 individuals based in the districts of Famagusta, Larnaca, Limassol, Nicosia and Paphos.

Download the ETEK list of architects and civil engineers.

Those wishing to submit a ‘Statement of Intent’ or a full application are recommended to contact two or three of those listed and obtain competitive quotations for the work.

The period during which ‘Statement of Intent’ may be submitted ends on the 7th October 2011. Applicants will have until 7th October 2014 to apply to the relevant Town Planning or Building Authority for a Certificate of Final Completion for the building.

Note

Since the Town Planning Amnesty was announced, hundreds of people who have bought property in Cyprus without Title Deeds have been targeted by a number of organisations and individuals offering to submit applications to the authorities on their behalf. The cost of their ‘services’ ranges between €1,000 and €4,000 (plus VAT).

The ‘Statement of Intent’ is a simple document, which requires the submission of certain basic information regarding the development and the irregularities; drawings and/or expensive studies are not required.

Readers who have been contacted by these organisations should read the Planning Amnesty Announcement provided by the Interior Ministry.

Meeting to discuss Oroklini theme park scheduled

Nigel Howarth
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ACCORDING to reports in the local media the meeting will take place between the Interior Minister, Neoclis Sylikiotis, and a joint delegation of representatives from the company set up by local land owners and representatives of the Russian investors.

The meeting will address two issues. The first concerns the exchange of state-owned land amounting to some 300 donums (around 40 hectares) for land held by the landowners elsewhere. The second concerns the change of use of the land and the need for new infrastructure.

At an estimated cost of €800 million, the project will occupy an area of nearly 1,000 donums (approximately 135 hectares) and will include a waterpark, a luxury hotel and many restaurants (assuming that it goes ahead).

Cyprus Town Planning Amnesty penalties announced

Nigel Howarth
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UNDER the temporary provisions of the Town Planning Amnesty, those wishing to have planning irregularities that result from overbuilding are required to pay a ‘compensation levy’ (penalty).

This penalty is based on the extent of the overbuilding, which must not exceed the parameters defined by the relevant laws.

Under the Town and Country Law, the excess density should be no more than 30% of the allowed density for the area or zone, providing that the total area of the approved footprint of the building has not been exceeded by more than 10%.

Under the Streets and Buildings Regulation law, the excess must not exceed 10% of the allowed density for the area or zone, half of which must be accommodated within the building’s approved footprint. (In cases where the irregularities are very severe, the Building Authority has the power to issue a certificate of unauthorised works, requiring the Department of Lands and Surveys to register a note on the title. This note will prohibit the transfer of the property to another person.)

(Please view ‘Planning Amnesty Explained‘ by Yiannis Koutsolambros for a full explanation).

The compensation levy is calculated by multiplying the extent of the overbuild, in square metres, by the value shown in columns 5 or 6 of the tables below. (The tables are in Greek, but it is relatively straightforward to translate their contents using Google Translate or Yahoo Babel Fish).

Tables for properties located in:

Note that planning infringements due to reasons other than overbuilding, may be legitimised without incurring a ‘compensation levy’.

Owners kept in the dark over the future of their homes

Bejay Browne
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FRUSTRATED owners of properties which appear to be sliding down a hillside in Paphos say they are being left in the dark over the future of their homes and fear they may be demolished.

A large crack appeared in the road below the development in April, which is a busy hub for traffic to and from Kamares village.

The road was closed by the police and owners of the stricken properties were told it was unsafe for them to stay there.

Similar problems with a cliff-side development in Pissouri village resulted in three houses collapsing.

The Paphos development, built by Tremetoushiotis developers Ltd under the umbrella of Top Properties consists of 14 units: four apartments, two villas and eight townhouses, which are at a skeleton stage and face directly onto the busy road. Only four of the properties have been sold and all of them to British buyers.

Les and Christine Payne, aged 59 and 53 years respectively, bought their ‘dream home’ off plan from Top properties over five years ago. They received the keys two years ago and ‘spent a fortune’ on furnishings, air conditioning and other items for their new home.

Today the disillusioned pair, say they have been left in the dark over the future of their two-bed, two-bathroom home.

“We don’t know what’s going to happen to our investment,” said Les, “we keep asking and asking but nobody seems to give us any answers. We paid cash and remortgaged our house in the UK to fund purchasing our apartment in Tala.”

The pair bought their home for 79,000 CY pounds, but say the final cost was more due to the currency changeover to the Euro. The property was their ‘retirement’ and they were planning to move into it permanently in a couple of years.

Those dreams now appear to have been thwarted, and the ongoing problems with their Cyprus home have caused Christine to suffer from depression and stress, for which she is receiving medical treatment.

“I have been off work for about six weeks and I don’t know when I will be going back,” she revealed.

The couple, who live in the UK, managed to enjoy only a handful of holidays in their new apartment before it was deemed ‘unsafe’.

Les said, “We are staying in Tala in an apartment which we have had to rent for the period of our stay. We are here to clear all of the furniture out of the apartment and it will go into storage, which is something else that we will have to pay for.”

The Paynes say they believe that there is a disagreement between Top properties and the authorities.

“The developer is saying they shouldn’t have given him building permission if they knew the land was unstable, but the authorities say he should’ve done all of his surveys properly before he started to build, but we are only going on what we have been told,” Les explained.

The buildings at the top of the development have all experienced movement and, according to the Paynes, there is also now movement in the townhouses directly facing the road.

The pair originally heard of the problem via an email forwarded by their next-door neighbours, who said a managing agent had told them “that the Kamares road had been closed”.

“This was end of March this year, not long before we were due to come on holiday and we were told that we couldn’t stay in the apartments”.

The Paynes say that Top Properties initially said the movement in the foundations was caused by an earthquake, but the couple found out that, while there had indeed been a slight tremor the true cause of the problem “was … the heavy rains”.

The municipality engineer who accompanied the couple to the site, noted Les, “reckons there’s not enough drainage and because there are three retaining walls at the site, when it rains it just takes everything away”.

The distraught pair say they were promised monthly updates from the developer, but that none has been forthcoming.

“The only way we get a response is if we get in touch with them and even then they don’t tell us anything as such … We need to know if the problem can be rectified or if it’s going to be demolished, maybe without us knowing anything about it,” stressed Les.

Meanwhile, huge gaping cracks are apparent around the construction and the Paynes say their building has dropped by at least two feet.

“We contacted the developers during this trip, but they couldn’t tell us anything.

They offered us an appointment but we declined, as every time we’ve come here we’ve struggled to get an appointment and we are told the same things,” said Christine.

The Paynes say they have no other course of action open to them other than retaining a lawyer.

Meanwhile, Paphos municipality building permits office head Evagoros Andreou stressed: “we are aware of the situation and are dealing with it”.

He added that they were waiting for the Interior Ministry to approve the formation of a specialist ‘ad hoc’ committee – hopefully within the next couple of months – consisting of “members from ETEK and other bodies to examine the situation.”

“They will make suggestions as to whether the site should be repaired or demolished.

The situation will be handled with care and in accordance with the law. This is a very complicated case”.

“I believe the developer has said he has no money available to undertake repairs,” a representative for the local engineers who wished to remain anonymous noted.

“It’s now up to the Paphos district office to force the developer to do something to secure the neighbourhood. In addition, something must be done to drain water away from the building.

Some ideas may include constructing supports down to the road at the base of the building. I’m sure that court action will be taken if necessary.”

Declining to answer questions posed by the Mail, a spokesperson for Top Properties who did not wish to be named, noted: “It’s an ongoing situation and we have spoken to the clients individually and are in constant contact with them.

We are waiting for a decision from the authorities as to what to do.”

Conveyancing property in Cyprus and due diligence

Nigel Howarth
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CONVEYANCING is the act of transferring the legal title in a property from one person to another. This involves lawyers representing the purchaser and the vendor carrying out the legal work required, which entails checking the title and other matters concerning the property, making enquiries on behalf of the purchaser, drafting contracts, etc.

The conveyancing process culminates in completion (readers from Scotland will know this as settlement), at which time the transfer of legal title (ownership) of the property from the vendor to the buyer takes place together with the transfer of the legal rights and obligations associated with the property.

In Cyprus, completion occurs when the purchaser pays the Property Transfer Fees to the Land Registry. Shortly after, the Land Registry will issue them with a printed Title Deed bearing their name as the legal, registered owner of the property they have purchased.

Due diligence

In many countries, lawyers acting on behalf of those buying property carry out due diligence as part of the conveyancing process automatically – i.e. without being specifically instructed to do so. They will carry out title searches, local authority searches – and make enquiries concerning planning permissions, planning proposals, road schemes, etc. and all the other tasks required to protect the interests of their client.

In Cyprus, however, there appears to be no defined tasks that a lawyer is required to undertake when conveyancing a property; consequently, due diligence can be somewhat of a hit and miss affair. Some lawyers fail to carry out even the most basic of checks, which may result in severe complications and difficulties for those whose interests they are being paid to protect.

It is therefore essential that those buying property ensure that their lawyer carries out the required tasks to safeguard their interests. They should also ensure that their lawyer confirms all the information and advice they provide in writing so that there can be no dispute about what has been said and what has been agreed at a later date – and they should keep a file of correspondence together with detailed records of emails and telephone conversations.

How can a lawyer help?

When buying property in Cyprus, a lawyer should, as a minimum:

For all types of property

  • Confirm that the person selling the property is its legal, registered owner.
  • Confirm that the property is free from any claims/encumbrances (such as a mortgage) and prohibitions. If the lawyer finds any encumbrances or prohibitions, they should advise their client of the risks they present and possible steps that may be taken to protect their interests.
  • Confirm that the vendor is in a position to deliver title of the property.
  • Ensure there is free and legal access to the property from a public highway.
  • Deal with their obligations to pay property taxes in a fair manner.
  • Draft and finalise the legal contracts.
  • Arrange for the payment of Stamp Duty and the stamping of the contact at the tax office.
  • Deposit the signed contract at the Land Registry for Specific Performance. (Note that under the new Specific Performance Law, the vendor may also deposit the contract).
  • Ensure that the vendor pays any taxes due by him, thereby ensuring that a tax clearance certificate will be issued.
  • Check that the property is not affected by town planning proposal. Obtaining a formal written statement from a planning authority in Cyprus is not possible. The best that can be expected is an informal, non-binding, off-the-record comment from one of the officers. A lawyer should also advise clients about the zoning of the area, the building coverage and density, but not if a neighbour has applied for permission to set up a goat farm! And as the zoning may change at a later date, a lawyer will be unable to offer any guarantees on this aspect of a purchase.
  • Facilitate the transfer of ownership of the property from the vendor to their client and the payment of Property Transfer Fees.

For ‘off-plan’ property (property that is bought before it’s been built or during construction)

  • Establish the credentials and credit worthiness of the developer.
  • Confirm that the necessary Town Planning Permission and Building Permits have been issued for the construction of the property.

For resale property

  • Ensure that the property is shown on the Title Deed.
  • Obtain a structural survey and professional opinion on the asking price from a RICS surveyor.

For land

  • Establish the precise location of the land.
  • Establish that the land may be used for the client’s intended purpose. As planning applications can only be submitted by the legal registered owner of the land, all that can be expected is an informal, non-binding, off-the-record comment from one of the planning officers.
  • Obtain a survey of the land to assess its suitability for the client’s intended purpose.

For properties sharing common facilities such as entrance halls, stairways, exterior walls, swimming pool, tennis courts, gardens, etc.

  • Determine whether the required committee for the management of the common areas has been established.
  • Draft and finalise the legal contracts associated with the payment of management fees and insurance of the common facilities. (This only applies to resale property as there cannot be a management committee for properties that do not exist. For off-plan purchases, provision should be made for the establishment of such a committee with responsibility for common areas resting with the developer until such time as the committee is formed).
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