Town Planning Amnesty statement of intent DIY guide

Nigel Howarth
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26

A NUMBER of companies and law firms are asking between €700 and €4,000 in return for helping property buyers to apply for their Title Deeds under the provisions of the recently passed ‘Town Planning Amnesty’ laws.

But their quoted service charges bear no relation to the actual cost of securing Title Deeds and there is no guarantee that Title Deeds will be issued as this will depend on the nature and extent of any planning infringements.

Furthermore, to secure Title Deeds to the property they have purchased, buyers may also have to pay: an element of the developer’s mortgage (in cases where the property has been built on mortgaged land) and a fine imposed by the authorities to legitimise planning irregularities. In circumstances where the developer is unwilling or unable to provide a ‘tax clearance certificate’ buyers will be required to pay the developer’s tax liabilities themselves.

These costs and any legal expenses incurred may be recovered by bringing a civil against the property developer through the courts.

Statement of intent application conditions

  • The Town Planning Amnesty only applies to “existing buildings” which, according to article 10D of the Streets and Building (Revised) Law 2011, are those that have a Planning and/or a Building Permit. Also the building must have been completed before the above law came into force on 7th April 2011.
  • When the period during which Statements of Intent may be submitted ends on 7th October 2011, applicants will have until 7th October 2014 to apply to the relevant Town Planning or Building Authority to obtain a Certificate of Final Completion for the building.

Preparing and submitting a statement of intent

INDIVIDUALS can submit a ‘statement of intent’ themselves, with the assistance of an ETEK registered architect/engineer without the need to spend thousands of Euros in service charges.

The first thing you need to do is establish the situation with your property whether you are entitled to apply.

If you bought the property from a developer, he will be able to advise you whether Planning and/or Building Permits have been issued and supply you with the relevant references; he will also be able to advise you of any problems that may have arisen. If your developer refuses to co-operate, you should visit your local Town Planning Department to obtain the necessary information from the officer responsible for your area. You should also do the same at the District Office – and if the property is in a Municipality, the Town Hall is the place to go.

(The authorities can impose heavy fines on developers who fail to co-operate in this matter).

If you had your property built by a contractor, you will need to discuss this with your supervising architect.

Once you have identified the situation with your particular property, and assuming that you are entitled to apply, you can then prepare and submit an appropriate ‘Statement of Intent’ with the assistance of an ETEK registered architect/engineer.

The type of the Statement of Intent that you will need to submit depends on the nature and the extent of the irregularities that exist and that need to be legalised. You will need to submit either:

A Statement of Intent under the Town and Country Planning Law.

or

A Statement of Intent under the Streets and Buildings Regulations Law.

The application forms

Pages 1 and 2 of the application forms above contain an English translation of the Greek application form contained on pages 3 and 4.

Note that it is the Greek language form that needs to be completed and submitted (the English translation is there for guidance only).

Page 5 of the application form contains a statement to be sworn by an architect/engineer at court verifying certain matters concerning the property in question.

Note that the sworn statement must accompany the completed Statement of Intent form and that the architect/engineer must be registered with the Cyprus Scientific and Technical Chamber (ETEK) who can be contacted at:

ETEK
P.O. Box 21826
1513, Nicosia
Cyprus

Tel: +357 22877644
Fax: +357 22730373
Email: [email protected]
Web: http://www.etek.org.cy/

ETEK will be able to advise you of suitably qualified architects and engineers in your area to assist.

Statements of Intent must be submitted to the Ministry of the Interior by October 7, 2011. A full application may then be submitted to the Planning or Building Authority by October 7, 2014.

Ministry of Interior planning amnesty announcement

Editorial
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4

ANNOUNCEMENT OF THE MINISTRY OF THE INTERIOR

With respect to a certain company’s advertisement, as well as other relevant adverts in the press, regarding the provision of services, for a fee, for the submission of applications based on the “Planning Amnesty” Laws, the Ministry of the Interior wishes to inform the public of the following:

  1. Any individual or legal entity may apply directly to the Authorities, which are defined by legislation, and submit an application for the legalisation of building irregularities or for the issue of updated title deeds, provided that he co-operates with a professional engineer, registered with the Cyprus Scientific and Technical Chamber (ETEK).
  2. Any citizen, holder or purchaser of a building with irregularities, must submit, by October 7, 2011, to the Ministry of the Interior, a Statement of Intent, and, if so, a full application, by April 7, 2014, to the Planning or Building Authority, for the legalisation of the irregularities. The Statement of Intent is a simple document, which requires the submission of certain, very basic, information, regarding the development and the irregularities, and not any drawings, expensive studies or a series of documents.
  3. The hiring of any Company, Agency or any other Consultancy for the preparation of necessary documentation and/ or studies, or the assignment of responsibility for the submission of applications, etc, could be arranged and negotiated by the applicant himself, with his sole responsibility, regarding the fees that will be paid.
  4. Applications will be evaluated in accordance with the legislation, and there can be no guarantee, in advance, of their approval.
  5. The Ministry of the Interior advises all applicants, that any decision, with respect to the method selected for the submission of documents and applications based on the “Planning Amnesty” Laws, must be taken with caution. The system provided by the legislation is relatively simple and does not justify excessive financial burden on the applicants, nor arrangements other than the conventional ones, which currently apply regarding standard procedures for applying for necessary development permits.
  6. The Ministry of the Interior advises against relying on guarantees that, in some cases, may be given to applicants, as these may not prove justified in the end of the process. This is especially possible with guarantees regarding the transfer of title deeds in the name of purchasers, without the need for action taken before Justice, in the case of unwilling owners.

Editor’s comments

For those wishing to submit a Statement of Intent under the provisions of the Planning Amnesty laws, we shall publish the required application forms (together with English language translations) during the coming week.

Second agency cuts Cyprus credit rating

Editorial
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2

STANDARD & POOR’S cut Cyprus’ credit rating by one notch on Friday and warned another cut was possible, deepening economic gloom for the island struggling with its worst peacetime disaster and mounting speculation it might be forced into an EU bailout.

Citing inconsistent commitments to spending cuts and risks of contagion from Greece’s debt crisis, S&P said the outlook for its BBB-plus rating remained negative.

On Wednesday Moody’s also downgraded the Cyprus economy from A2 to Baa1 and on Thursday it also downgraded the island’s two largest banks, the Bank of Cyprus and Marfin Popular Bank, because of their exposure to the Greek debt.

It was the second agency to cut Cyprus’ rating this week, bringing it in line with Moody’s Baa1 rating announced on Wednesday while Fitch remains one notch higher at A-minus.

Markets have been closely watching Cyprus for signs of stress for some weeks; yields on its international bonds have risen steadily this year and a July 11 blast which destroyed the island’s largest power station triggering political turmoil has deepened fiscal woes.

Cyprus’ central bank governor Athanasios Orphanides has warned that without urgent remedial action Cyprus could be forced into an EU support mechanism.

Dismissing such a suggestion, the government says it has met its financing needs domestically this year but it is unclear if that factors in the cost of a blast damage bill, estimated anywhere between 1 and 3 billion Euros. The top range of that estimate is equivalent to 17 percent of Cyprus’ GDP.

Discussions on spending cuts are in disarray after opposition parties accused the government this week of backtracking on reform pledges, and Cyprus’ cabinet tendered its resignation on Thursday to quell public anger at the blast, caused by munitions stored next to the power station.

The yield on a 10-year government bond issued to international investors in February 2010 was bid at 9.7 percent on Friday, up from 9.5 on Thursday and around 6.20 percent in early May. Cyprus is not a regular with international debt issues, and trading in its bonds is thin.

Deficit targets unlikely

Fitch said it believed Cyprus would struggle to meet its 2011 general government deficit target of less than 4.0 percent of GDP, and its 2012 target of 2 percent.

Missing those targets would exert pressure on general government debt which was anticipated to reach 80 percent of GDP by the end of 2011, after incorporating a 2.79 billion euro repo facility due to expire at the end of November 2012.

“Such a substantial rise in general government debt is likely to reduce the Cypriot government’s capacity to back-stop its domestic banking sector, which in our view is vulnerable to the potential restructuring of government debt in Greece,” Standard and Poor’s said.

Cypriot banks’ total exposure to Greece, which included bank, sovereign and loans in the Greek market, was equivalent to more than 160 percent of GDP. Although the Cypriot banking system was well capitalised, S&P said it anticipated potential losses in Greece could reduce current capital levels.

“Our baseline expectation is that the Cypriot government will not need to recapitalize the banks in the near future, but the ongoing uncertainty in the external environment increases the risk of this eventuality,” S&P said. – (Reuters)

Moody’s downgrades Marfin and Bank of Cyprus

Nigel Howarth
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8

EARLIER today, Moody’s ratings agency downgraded the deposit and debt ratings of Marfin Popular Bank Public Co Ltd (MPB) to Ba2/Not Prime, from Baa3/Prime-3, and Bank of Cyprus Public Co Ltd (BoC) to Ba1/Not Prime from Baa2/Prime-2.

At the same time, Moody’s confirmed the deposit and debt ratings of Hellenic Bank Public Co Ltd (Hellenic) at Ba1.

The outlook on the ratings of all three banks is negative.

According to Moody’s press release, the main factors driving the rating actions are:

  1. High exposures to Greek government bonds (GGBs), amounting to approximately 95% of Tier 1 capital for the Marfin Popular Bank and 55% for the Bank of Cyprus.
  2. Significant lending exposure to the Greek private sector, which will also likely cause a further rise in the banks’ non-performing assets and, as a result, weaken profitability.
  3. Challenges to sustain their current funding and liquidity profiles in the context of high levels of uncertainty in the region.

The negative outlook on the banks’ ratings reflects the high level of uncertainty surrounding credit developments in Greece and the impact this could have on the banks’ overall credit risk and the negative outlook also reflects the weak operating conditions in Cyprus.

Government bonds downgraded

Today’s downgrade follows yesterdays announcement by Moody’s that it had downgraded Cyprus’ government bond ratings to Baa1 from A2 over “ongoing concerns about Cyprus’ fiscal position, which are amplified by the fiscal and economic consequences of the destruction of the Vasilikos power plant on 11 July 2011”.

Yesterday’s announcement also referred to “the increasingly fractious political climate in Cyprus in the wake of the plant’s destruction”.

Adding that “This adverse development increases implementation risk to the government’s plans, many of which will require not just cross-party support, but also acceptance by the trade unions“.

Moody’s also said that the “government may need to extend capital support to at least some of its banks over the next few years given the substantial exposure of Cypriot banks to a sovereign default and macroeconomic stress in Greece”.

The outlook is now negative, Moody’s said.

EC asked to rule on unfair commercial practices

Nigel Howarth
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7

IN A WRITTEN question to the European Commission Irish MEP Seán Kelly has highlighted the fact that the current legal provisions in Cyprus to protect buyers’ rights are totally inadequate, despite assurances made to the EU by the Republic.

He has called on the Commission to confirm that the failure to transfer legal ownership of immovable properties immediately after purchase is an unfair practice.

Question for written answer
to the Commission
Rule 117
Seán Kelly (PPE)

Subject: Cypriot property developers and unfair commercial practices

Pursuant to Directive 2005/29/EC on unfair commercial practices and Cyprus Law 103 (I)/2007, which states that many buyers in Cyprus are without the title deeds to their homes, the current legal provisions in Cyprus to protect buyers’ rights are totally inadequate, despite assurances to the EU by the Republic of Cyprus.

The head of the Cyprus Consumers Association recently admitted to the media that he had not heard of the law, despite Article 17 of the directive mandating that the state inform consumers.

Can the Commission confirm that the failure to transfer legal ownership of immovable properties immediately after purchase is an unfair practice in all circumstances, regardless of what contract was signed?

Further reading

Written question to European Commission E-007067/2011: Cypriot property developers and unfair commercial practices

About Seán Kelly

Seán Kelly was elected as a Fine Gael candidate at the 2009 European Parliament election for the South constituency. He is a member of the European Parliament’s Committee on Regional Development and the delegation for relations with the United States. He also serves as a substitute member of the Committee on Culture and Education and the delegation for relations with Canada.

He has been highly active since entering the Parliament, having spoken in the plenary session 309 times, and having tabled 314 parliamentary questions as of July 2011.

Bar Association’s Disciplinary Board in the dock

Patrick Dewhurst
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15

HAPLESS home buyers are filing up to 50 complaints a month to the Advocates Disciplinary Board against allegedly corrupt lawyers, it emerged this week.

According to board member and Cyprus Bar Association (CBA) president Doros Ioannides, the majority of these complaints are filed by British expats against Paphos-based property lawyers – and mostly involve developers.

The rate of applications has become so unmanageable that, according to one scam victim, one such lawyer has even racked up more than 25 complaints over the past two years without a single judgement against her.

So what is going on at the Advocates Disciplinary Board?

According to Ioannides, the glut of applications has followed the landmark Supreme Court ruling against Paphos lawyer Nicos Papacleovoulou in April 2010, who negligently carried out his duties on behalf of a British couple in a property transaction in 1999.

Since then, he said, “many” lawyers have been disciplined by the board according to Ioannides, although he declined to give a precise figure.

The Papacleovoulou case was also the first in which a lawyer agreed to represent clients suing another lawyer in Cyprus, and it appears to have opened the floodgates to hundreds of hopeful property buyers seeking justice, compensation or Title Deeds.

“We have been receiving around 50 (complaints) a month. Most are foreigners, and most of those are British… we have many problems with developers from Paphos,” Ioannides said.

Unfortunately, the response has overwhelmed the seven-man disciplinary board; composed of attorney-general Petros Clerides, Ioannides and five other members, each with more than 15 years of practice, and there is now a huge backlog of applications Ioannides does not expect to clear until September or October.

It is a source of frustration for many complainants who have to wait in line irrespective of the scale or blatancy of the lawyers’ wrongdoing, especially since the alternative – to sue lawyers directly in court – is all but impossible due to the hefty costs and general reluctance among lawyers to go against their colleagues in court.

Only with the disciplinary board – and therefore the attorney general’s implicit backing – is a case like Papakleovoulou likely to be taken up by a legal office and pursued through the courts.

One hapless British expat in Paphos, who is taking action against his former lawyer after he learned she is the sister of the developer that was building his house, faced exactly this dilemma recently.

After taking his money and stalling on the construction of the house for several years, the expat only learned of the siblings’ relationship when a subcontractor tipped him off in 2009.

After six months of waiting for the CBA to act, he said this week: “I am very annoyed that the Cyprus Bar Association is not acting against these rogue lawyers. It seems to me the CBA is a brick wall.”

So, what, aside from having only seven part-time members is causing the delay?

In many cases, it seems to be the lawyers themselves: once a complainant has paid his €68 administrative fee, his complaint is sent on to the lawyer for their comments.

In several calls to the CBA to follow-up on his complaint, filed in January, the above mentioned expat was told that the lawyer simply had not replied to the board’s request for comments.

“This has been an enormous travesty of justice,” he said, adding: “if this was happening in the UK, that lawyer would have been suspended.”

Asked what would happen if a lawyer refuses to reply to the request for comments, Ioannides said they can proceed straight to trial.

In practice this does not always happen. For example, another Paphos lawyer – who reportedly has over 25 complaints against her for such misdemeanours as colluding with developers and forging clients’ signatures – simply called in sick ahead of her hearing, which was postponed. One such complaint was filed more than two years ago, but the hearing did not take place until June this year.

The Cyprus Mail was unable to obtain details of the remaining 24 cases against her.

The board has the authority to strike off, suspend or fine a lawyer up to €1,000, if, in their view, the lawyer is guilty of moral turpitude, disgraceful, fraudulent or unprofessional conduct. In practice, this process presents another opportunity for lawyers to stall the process.

Come September, if Ioannides’ assessment of his association’s ability to turn around cases is accurate, Cyprus could begin to see lawyers behind the bar – or even bars.

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