Power of Attorney documents – certification & validity

Editorial
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23

CYPRUS Property News has received several complaints alleging the use of uncertified Power of Attorney documents to obtain mortgages on behalf of those purchasing property.

In many cases it appears that the banks involved failed to check the validity of Power of Attorney documents and are pursuing buyers for mortgage arrears; using the threat of court action to elicit payment.

Those who have complained to the banks concerned, receive a terse reply:

“The issues you raise regarding certification of the Power of Attorney document do not negate the validity of the contract entered into with the Bank. Under Cyprus law there is no requirement for a formal certification of a Power of Attorney. A power of attorney can be valid even if it bears only the signature of the grantor.”

We have sought legal opinion on the banks’ response to these complaints from one of the Island’s leading law firms. We suggest that anyone in this situation who receives correspondence from a bank in Cyprus chasing them for mortgage arrears replies accordingly.

Legal opinion from a leading law firm

The law in Cyprus provides for the appointment of Certifying Officers who are entrusted with the duty to certify the signature of a person signing a document such as a Power of Attorney.

The purpose of the law is twofold, the one is to facilitate a person to appoint somebody else in order to act on his behalf at his absence and therefore his signature as “principal” is required to be certified, and the other is to ensure the legality and safety of transactions, especially the ones concerning the transfer and mortgage of immovable property in Cyprus.

Generally under s. 7 of the Certifying Officers Law, Cap 39, a Certifying Officer will not certify the signature or the seal of a person unless:

  1. the signature or seal is affixed to the document in his presence;
  2. the person signing or sealing the document is personally known to the Certifying Officer, or his identity is attested by two persons personally known to the Certifying Officer, who shall sign the document as witnesses to the seal or signature of the principal party.

The fact that a person signing the Power of Attorney is doing so in the presence of the Certifying Officer, after he shows to the officer his identity card or passport and the officer compares his signature and photograph, is not enough to render the document valid or to allow the Certifying Officer legitimately to certify the signature of that person. On the contrary, such a Power of Attorney is not valid and any transfer, mortgage or encumbrance over an immovable property pursuant to the said Power of Attorney can subsequently be cancelled by the principal.

It becomes evident that private individuals, bank organizations, Certifying Officers and everybody else must be extremely careful not to put themselves in such a situation.

When a Power of Attorney is accepted by the Land Registry, this does not imply that the transfer or even the mortgage of an immovable property is valid, since it is not in a position to identify whether the person granting the Power of Attorney was personally known to the Certifying Officer. The transaction depends on the subsequent behaviour of the principal party, whether he will accept or question it. The Certifying Officers ought to follow accurately the law at all times for both the protection of themselves and of the transactions.

In the case of Georgios Antoniou v Demetras Christodoulou case number 10802, dated 19.2.2003, provides that a signature of a person can be certified by a Certifying Officer only if the person signing is personally known to the officer and that this requirement has nothing to do with the showing of his identity card. The law refers to a pre-existing personal acquaintance other than the introduction at the time of the signing. If this requirement is not satisfied, the alternative way available is to have two other persons attesting the identity of the person signing, who must be personally known to the officer and sign as witnesses. This case was appealed and the Supreme Court approved the District Court’s decision.

There are declarations, documents or transactions conducted by a representative whereby the law does not require the authority to be written and certified by a Certifying Officer. However, with regard to immovable property, and in the present case this is of interest to us, for the declaration of the agent to be accepted, either for the transfer or the mortgage of a property, the law requires the agent to submit a written authorisation/Power of Attorney legally certified by a Certifying Officer in accordance with the provisions of the Certifying Officers’ Law.

Consequently, if such authorisation/Power of Attorney was not legally certified, it may cause the transfer or the mortgage of the property to be declared null and void.

Building permits up but residential construction slows

David Crowther
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0

ACCORDING to figures released today by the Cyprus Statistical Service, 638 building permits were authorised in January 2011, an increase of 3.1% over the 619 authorised in January 2010, comprising:

  • Residential buildings – 469 permits
  • Non-residential buildings – 95 permits
  • Civil engineering projects -25 permits
  • Road construction – 8 permits
  • Division of plots of land – 41 permits

This is the first time in ten months that the number of building permits that have been authorised has increased.

However, the total value of these permits fell 20.3% from €198.1 million to €157.8 million and their total area fell 26.9% from 228.8 thousand square metres to 167.3 thousand square metres compared with the permits authorised in January 2010.

Focusing on the 469 permits issued for the construction of residential buildings, these were approved for 787 dwelling units – 370 single houses and 417 multiple housing units such as apartments and other residential complexes.

Compared to the January 2010 total of 1,290 dwelling units, this represents a fall of 39%.

Source: Cyprus Statistical Service

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

Cyprus’ most expensive residence is up for sale

Nigel Howarth
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2

THE MOST expensive house in Cyprus, the Santa Barbara Residence, which is said to be the ultimate in luxury, style and comfort, is on the market with a record-breaking asking price.

Built on a 2,025m2 plot and with a total area of 3,264m2, this unique beachfront residence in the Amathus area of Limassol, has seven bedrooms plus accommodation for up to nine members of staff. The property is built on five levels:

Level 1 – Staff quarters

Level 2 – Indoor swimming pool, hydro massage, aquarium, bar, changing rooms, solarium, steam room, Finnish sauna room, snow cabin, mud bath room, massage beauty room, gym, winter garden, utility rooms, wine cellar, food storage, freezers, staff service kitchen, plant and machinery rooms.

Level 3 – Three double bedrooms with private en-suite, home cinema/ dancing area, aquarium, winter garden, interior reception, billiard room, exterior reception room, guest wardrobes, service elevator and home security room.

Level 4 – Reception area, kitchen area, dining room with seating for 20 people, sitting room with a fireplace, library and a private study room.

Level 5 – Spacious 200m² master bedroom featuring a 180 degree panoramic sea view; including futuristic wardrobes, plasma TV, projector, outside hot tub, en suite bathroom, fireplace, private office, kitchenette, cloak room, and 3 private verandas.

Outside there is a triple garage and an outdoor swimming pool with bar.

And in case you are wondering, the property does have Title Deeds.

[youtube=http://www.youtube.com/watch?v=T5VsurE171A&rel=0&showsearch=1&w=470]

EC replies to legal rulings on Cyprus swimming pools

Nigel Howarth
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12

AS WE reported on 4th March, the authorities in Cyprus have taken legal proceedings against the owners of shared swimming pools in private development complexes because they failed to apply for a swimming pool licence.

In a written question to the European Commission MEP Arlene McCarthy highlighted the fact that Cypriot regulations are no longer applicable as they have been superseded by EU regulations and called on the Commission to ensure unfair legal proceedings against pool owners are halted and that the correct European standards are enforced.

On Wednesday, European Commissioner for Enterprise & Industry Antonio Tajani replied to Ms McCarthy’s question.

EN
E-001470/2011
Answer given by Mr Tajani
on behalf of the Commission
(23.3.2011)

The question concerns a conflict between national regulations and a European standard. The European Standard for swimming pools, EN 15288-2, appears to conflict with Cypriot law on swimming pools.

European standard EN 15288-2 was developed and adopted by the European Committee for Standardisation (CEN). Each CEN national member, which includes the national standardisation body of Cyprus, must implement the European standard by giving it the status of a national standard and withdrawing any conflicting national standard(s).

However, a CEN member may be confronted with the situation where it has to implement a European standard that does not comply with its national legislation. As the application of European standards is generally voluntary (unlike legislation), in these circumstances the CEN member is entitled to request a derogation from the mandatory replacement of the national standard by the European standard. This derogation is effected through the application of a so called ‘A-deviation’, to be included in the informative annex to the European standard.

It is not clear whether the national standardisation body of Cyprus has requested an A-deviation with respect to the European standard EN 15288-2. However, even if this was not the case, national legislation would prevail over the European standard in the event of conflict. In the absence of EU legislation applicable to the safety of swimming pools, the obligation to seek a swimming pool licence will have to be assessed by the Cypriot courts.

Further reading

Written question and answer to the European Commission E-001470/2011:  European Standard for swimming pools and its application in the municipality of Paphos

Majority of Cypriot planning amnesty laws passed

Elias Hazou
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13

Results of a recent mini-pollBY A UNANIMOUS vote, the House approved the amended laws on town planning, roads and structures, and immovable property (tenure, registration and valuation) as submitted by the Interior Ministry. Eleventh-hour amendments proposed by the parties were discussed but rejected.

MPs had hoped to pass the entire package, which consists of five items in total, but two of the items are still pending at the House Legal Affairs Committee.

The new legislation essentially provides for ‘legalizing’ real estate property that lacks a Title Deed due to town-planning or building irregularities.

Some 130,000 Title Deeds are pending, due to developers not having paid mortgages to banks for property which buyers have already paid for, or to building irregularities such as exceeding the allowed building ratio.

The government expects to make some €150,000 per year from transfer fees if affected people apply en masse.

Under the general town-planning law passed yesterday, owners of houses or apartments may now legalize their property for a fee and thus secure a final certificate of approval and the deed; alternatively, a Title Deed issued will list on it the property’s irregularities.

Only ‘minor’ irregularities – such as closing up a balcony or building a garage – may be legalized in this way. This excludes cases where irregularities affect third parties or encroach on state property, or for flagrant violations such as the building ratio having been exceeded by 30 per cent or more.

Affected people now have six months to apply to the Town Planning Department.

The regularisation fees will be determined by a three-member committee, appointed by the Cyprus Interior Minister, in each district. The committee will take a second look at cases approved by either the Town Planning or Land Registry departments, and issue a final decision.

As an incentive, 20 per cent of these fees will be shaved off for applications filed within one year of the law coming into force, and 10 per cent for applications submitted within the second year.

There are also provisions for fines for delays, omissions or fraudulent information in documentation which goes towards obtaining a Title Deed.

Anyone found guilty in court of committing a planning irregularity will be liable to a fine of up to €3,400 and to an additional €340 penalty for each day of non-compliance thereafter.

ROPUK sells to Millbak Wealth after tough times

Editorial
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5

SPECIALIST property management software developer ROPUK Network has been acquired by independent financial advisory group Millbak Wealth this week for an undisclosed sum.

Speaking exclusively to OPP, ROPUK chief executive Kevin Maddison said, “the ROP UK Network brand will disappear and all our future business activity will be taken over – and carried on – by Millbak.”

The two companies are already well known to each other. Maddison told OPP that ROPUK Network had been working for some time with Millbak, “building their management systems and back office processes. They had taken on our GMP (Global Management Platform) software to help run the business … so it made sense to effectively take us over in full.”

Millbak director Gavin Woodhouse agreed, telling OPP “we have bought the future intellectual property rights and the ongoing business relationships that ROPUK Network had.”

Woodhouse could not see any logic in installing the ROPUK Network GMP software and ending up a rival competitor. “We were going to end up as head-to-head competitors using exactly the same software. It just didn’t make sense.”

For Maddison, the move makes sense because “we have been through some very tough times in recent years and markets like Cyprus have made us battle weary. I felt it was a good time to move on.”

“Millbak will give the business more scale and there will be a lot of good energy coming out of all this,” he adds, “especially with a new sales mentality and the desire to make a fresh move forward.”

Agents have welcomed the news positively say both parties and, adds Woodhouse, there is a lot of synergy in the deal. “Kevin wanted to concentrate purely on being a software and systems provider,” he adds, “and for us we get a set of historic trading relationships to mine and the GMP platform to help us sell finance products successfully in the market.”

ROPUK Network was based in Stockton-on-Tees in the north east of England and employed around 15 people.

Its network was made up of more than 200 registered selling agents, most of whom worked in the financial services sector as IFAs. ROPUK would carry out due diligence and research on overseas property developers and developments for the network to sell, using its expert knowledge of the overseas property sector and how it works.

This information, once collated, is then entered into ROPUK’s bespoke online software system called Global Management Platform (GMP) – which could accessed from the company’s website, www.ropuk.com.

The GMP system then created a ‘buyers guide’ for purchasers that personalised the document with their own information and produced deposit and mortgage quotations relevant to the property being considered.

GMP also gives real time information to all key stakeholders involved in property purchase or investment schemes. It started life as a simple database and property list, and then evolved into a bespoke software solution to suit any developer or agent.

Millbak provides, it says, “transparent, SIPP-compliant, sustainable UK investments,” and “opportunities within the UK for resellers and distribution agents in the UK & Europe.”

OPP

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