ACCORDING to the latest figures published by the Cyprus Statistical Service (CYSTAT) building permits for the construction of 1,381 dwellings were authorised in March 2009; down slightly on the 1,593 authorised in March last year.
During the first quarter of this year building permits for the construction of 4,553 dwellings have been authorised; up slightly on the 4,405 issued during the first quarter of 2008.
As a consequence, it is likely that a number of these permits have been issued for the construction of dwellings that have already been completed.
THE ANXIETY and stress levels of tens of thousands of foreign property-owners would have peaked after reading that the government has no plan for tackling the problem of the Title Deeds.
Some 100,000 home-buyers have been waiting for Title Deeds for their properties for years and had pinned their hopes on the government’s pledge to help.
These hopes were dashed after Tuesday’s report that new legislation regarding the issuing of Title Deeds will only apply to future property purchases and have no bearing on old transactions.
It means that buyers remain at the mercy of the developer who sold the property to them and the banks that hold their Title Deeds as collateral for loans. It is a terrible predicament for buyers; despite having paid for a property in full they do not legally own it and cannot sell it or use it as security for a loan.
News about the government’s inability to tackle the problem was conveyed to the British High Commissioner by Interior Minister Neoclis Sylikiotis, who offered to meet representatives of the interest groups. But what would be the point of such a meeting, considering that Sylikiotis has nothing constructive to propose? Would he make more well-meaning promises that he would be unable to keep?
The Cyprus government has only itself to blame for the Title Deed mess. It had given assurances that it would tackle the problem, not aware of the complexities and naively believing there was a quick-fix solution. But when technocrats started studying the matter, it must have become obvious that no law could sort out the mess created by a system that safeguarded the interests of the banks, helped developers raise funds and totally ignored the interests of property-buyers. Any attempt to help buyers obtain their Title Deeds would leave banks with unsecured loans worth hundreds of millions of euro and the collapse of the property market.
Sylikiotis should have asked his technocrats to study the matter and the options open to the government before making any public promises, because good intentions count for nothing. The government is now being accused by some buyers of “stringing them along with lies,” despite the fact that this practice was the norm for more than 20 years and nobody was willing to touch it.
The truth is that a no-pain solution does not exist and the government will find it very difficult to appease the thousands of property-buyers waiting for their Title Deeds.
Property buyers, meanwhile, are perfectly justified to protest about this unacceptable situation and to put pressure on the authorities to come up with some kind of arrangement that offers a little protection to them. It might not be the best solution possible but it would be better than nothing, which is the case at present.
PROPERTY buyers in Cyprus have reacted with shock after news broke last night that the government will not help to fix the Title Deeds saga. Final confirmation for long-suffering buyers came after months of speculation that much hyped legislation to fix the deed shambles was non-existent.
Campaigners are describing the revelation as a “bitter blow” which leaves them with no option other than to seek their deeds through the courts or sit and wait.
Turning to the courts may turn out to be an expensive endeavour which many pensioners ultimately won’t be able to afford to fight.
“The only recourse they have is through the courts. Can you imagine how long it’s going to take the courts to process 100,000 cases? They’ll all be long gone and buried before their cases are even heard, The whole situation is a complete and utter shambles,” said property analyst Nigel Howarth.
The news will also anger thousands of people stuck in limbo trying to sell their properties, which is ‘near to impossible’ without deeds according to a leading property adviser.
The devastating news came after British peer Lord Jones of Cheltenham demanded clarification about the much-discussed legislation designed to end the fiasco.
His question, to a packed House of Lords, sent British High Commissioner Peter Millet scrambling to the Minister of the Interior to seek an answer on the deeds issue.
The answer, which was published in Hansard yesterday, confirmed that up to 100,000 people will be left in the cold by the government. “Our High Commissioner, in Cyprus discussed the question of Title Deeds with the Minister of Interior of the Republic of Cyprus on 27 April 2009.
“The Minister was fully aware of the problem of obtaining Title Deeds, an issue which also affects a large number of Cypriots. The Cyprus Government will introduce legislation to speed up the issuing of Title Deeds, but this legislation will only apply to future cases. The Minister expressed a willingness to meet representatives of interest groups about this issue.”
The state is now being accused by some buyers as ‘stringing them on with lies’ after several assurances to the British Government that it intended to introduce a bill to address the issue.
“We’ve all been strung along, the British government, the property buyers, everyone…we were all conned,” said Denis O’Hare of CPAG.
“There are ways out of this situation which could cripple the economy; the government need to sit down with us and get moving on the issue,” he added.
In February it was revealed that the British Foreign Secretary David Miliband and Chancellor Alistair Darling had been in communication concerning Title Deeds.
Even then, Miliband stated that the British High Commissioner to Cyprus had “received assurances” from the Cypriot Interior Ministry that they would introduce a bill to address the situation soon.
Around 100,000 properties in Cyprus are without Title Deeds and Land Registry officials have confirmed that 30,000 of these properties have been bought by foreigners, the vast majority being British.
The news will also have serious repercussions on the flagging construction sector, which has been bruised by the credit crunch and marred by property scam nightmares and the Title Deed shambles.
“Why didn’t the Cyprus government tell the whole truth in the first place? Is it being completely honest with us now? No-one in their right mind is going to buy property here until the government does something about existing buyers who have been conned into buying mortgaged property and who continue to be defrauded,” Howarth added.
Speaking before the House Committee the Cyprus Minister of Commerce, Antonis Paschalides, said that the construction of the Limassol marina will start in early September.
Mr. Paschalides admitted that there were delays in the coordination of the competent services but the problems have been overcome and any new delays from now on will not concern the government.
The Minister also referred to the delay from the government’s failure to secure loans of the investors who undertook the construction of the marina.
About the issue, Chairman of the Limassol Chamber of Commerce and Industry, Demetris Solomonides said that the joint venture had asked by the government to guarantee the loans so as to secure lower interest rates by the banks. “This was not accepted by the government although it could do it since guarantees concerned the vessels’ anchoring, which would not be exploited by the businessman since it would be returned to the state after 53 years“, he said.
“The good thing is that the joint venture proceeded with negotiations with the banks and secured loans to start the construction. It is a project that will help not only Limassol but the entire country too“, he said.
Limassol Mayor, Andreas Christou said that the construction of the Limassol Marina is of national importance to Cyprus as the city’s trade and economy will benefit.
“Things could have been developed faster, however, time can be gained and the project can be a model for the construction of the other marinas that will follow“, he added.
Although the members of the Committee appeared satisfied for the course of the project, the MPs from Famagusta Municipality expressed their discontent for the delays in the construction of the Ayia Napa marina.
One of the problems concerns the road that splits private properties and the citizens who have filed legal actions. “So long as there are cases before the court, the state services must respect it“, Mr. Paschalides said.
The second obstacle was the General Auditor’s report according to which new tenders must be made. “It has been six years since the only tender was made and negotiations have not started yet. It will be regarded as a direct assignment to one and only businessman and this is forbidden by the law“, she said.
The issue is currently under examination by the Attorney General, who is called to give a solution.
Chairman of the Committee, Lefteris Christoforou told the Minister that he will accept no delay for the Ayia Napa marina and he will send a letter to the President of the Republic asking ways to start the construction of the marina at the same time as that in Limassol.
“The municipality of free Famagusta is always unprivileged and no big project has been constructed in the past 20 years. Also, it is unjustifiable to delay projects that contribute to the island’s economy in the middle of the economic crisis“, he concluded.
EARLIER today, their Lordships in Westminster were sent reeling by the news that the long-awaited bill being prepared by the Cyprus Government will not help those who have been conned into buying mortgaged property by rogue developers.
“Our High Commissioner in Cyprus recently raised the issue of title deeds not being supplied to purchasers on completion of a property purchase in Cyprus with the Republic of Cyprus Ministry of the Interior, and received assurances that the Cypriot Government intend to introduce a Bill to address this issue.”
However, the Cyprus Government omitted one vital fact – that the proposed bill will only benefit future property buyers; those who have already been ‘scammed’ will receive no help.
“Our High Commissioner in Cyprus discussed the question of title deeds with the Minister of Interior of the Republic of Cyprus on 27 April 2009. The Minister was fully aware of the problem of obtaining title deeds, an issue which also affects a large number of Cypriots. The Cyprus Government will introduce legislation to speed up the issuing of title deeds, but this legislation will only apply to future cases. The Minister expressed a willingness to meet representatives of interest groups about this issue.”
(You can read the full text of the question and answer by clicking here).
Rumour and speculation
FOR more than five months the much anticipated Title Deed bill has been the subject of much rumour and speculation.
At the recent Title Deed seminar in Paphos organised by the Cyprus Property Action Group Andreas Symeou, a senior official from the Land Registry, said that the only legislation being drafted was an amnesty for developers who had infringed various planning laws along with some minor adjustments to existing legislation to protect future buyers.
Last month, when speaking at the annual general meeting of the Land and Building Developers Association, Interior Minister Neoclis Sylikiotis said that that legislation was in process that would bring an end to the problem affecting the 100,000 properties bought by Cypriots and around 30,000 foreigners, most of whom are British.
It is now clear that the Interior Minister’s statement was no more than hot air; he has now confirmed that the legislation will not “bring an end to the problem affecting 100,000 properties”.
What is the Title Deed problem?
Looking at the problem another way, developers sell properties twice; first to the bank and then, for a second, time to the homebuyer.
THE key problem delaying the transfer of Title Deeds to some 100,000 properties is the fact that property developers have mortgaged the land on which they have built to the tune of €4 billion.
Even though people have bought and paid for homes built on that land, the bank’s claim to the money takes precedence over their claims to ownership and they are at risk of losing their homes. Looking at the Title Deed problem another way, properties are sold twice; first to the bank and then, for a second, time to the homebuyer.
The problem is compounded by lawyers alleging to work on behalf of buyers (but who in fact look after the interests of developers). They do not advise buyers about developer’s mortgages when they conveyance the property; many of them don’t even bother to check with the Land Registry to see if the property is mortgaged!
Unless buyers are lucky enough to find an ‘honest’ lawyer, they remain completely oblivious of the fact that a developer has mortgaged ‘their’ property – until they come to sell it – or the bank comes knocking on the door for its money.
Why be economical with the truth?
WITH the island’s reputation already tarnished by the bad publicity surrounding the deceitful and fraudulent practices of those involved in the property business, what motivated the Cyprus government to be economical with the truth? Why did it not say that the new legislation would only apply to future cases?
It has been rumoured that property developers and lawyers are so strongly connected with the Corridors of Power in Nicosia that any attempt to rectify the problems with Title Deeds or introduce a consumer protection system to deal effectively with these matters would be pointless.
What next?
WILL the government allow Cyprus to remain as MEP Nigel Farage put it “a rogue-state beyond the fringes of civilisation” and “a bandit-stronghold“, or will it act decisively to put an end to the problems blighting its property industry?
The EU has warned Cyprus that it will take the “necessary measures” if any infringement of EU law has occurred.
The European Commission has asked the Cyprus government to provide it with details of the legal provisions and practices regulating and operating in the property sector, warning that it will take the “necessary measures” if any infringement of EU law has occurred.
But as Cyprus has already demonstrated that it is prepared to be ‘economical with the truth’ when dealing with the UK government, what guarantee is there that it will not leave out important facts when answering questions put to it by the European Commission?
The EU Parliament has agreed to freeze hundreds of millions of Euros in EU payments to Spain as a result of illegal practices perpetrated against property buyers in that country, what are the prospects for the EU implementing similar sanctions against Cyprus?
Even before this latest bombshell had reached the ears of the EU Parliament its Vice President, Edward Macmillan-Scott, had stated publically that he was “appalled” and “enraged” by what was happening in Cyprus. No doubt after receiving this latest news, any statement he makes will be unprintable!
What future for Cyprus’ property industry?
Britain and other EU member states must take assertive action to protect their citizens.
ALREADY hard hit by the global financial crisis and the bad publicity surrounding its property industry, news that the Cyprus government has been ‘economical with the truth’ with the UK Government as well as its own citizens could have far reaching consequences for the future of its property industry and the economic well-being of the island.
In light of these developments we hope that the British and other governments whose citizens have been conned into buying mortgaged property will take assertive action to prevent any more of them falling into this and similar traps.
But let us not forget the many thousands of people of all nationalities affected by the deceitful practices of the property developers and their lawyers. These are the ones who need Britain and the EU to come to their rescue urgently.
ORGANISED by the Cyprus Property Action Group, CPAG, and supported by KSIA, the Cyprus Land and Property Owners Association, some 300 demonstrators gathered at the Paliomonastiro municipal park at Peyia demanding government action to resolve the numerous Title Deed problems.
The police, including the local inspector and divisional commander, were in attendance along with three rather large Cypriot gentlemen who preferred to remain anonymous.
One of the banned posters
Some of the demonstrators, like ‘Pete’, are at risk of losing their homes because the law allows developers to mortgage the land on which they are building. His property developer collapsed, owing the bank tens of thousands of Euros. Pete has spoken with the bank who confirmed it can sell his home to recover the debt.
Policeman speaking with demonstrator
Others are victims of the ‘Immovable Property Tax’ scam. This is a massive fraud in which unscrupulous property developers extort money from buyers using the threat of withholding Title Deeds to elicit payment. Claiming that this money is used to pay Immovable Property Tax, it is estimated that millions of Euros have been pocketed by the developers over the years, while only a small amount has ended up in state coffers.
CPAG spokesman Denis O’Hare thanked the demonstrators and said that there would be more opportunities for people to see President Christofias in the future.
President of KSIA, George Strovolides, also addressed the demonstrators saying that the government must take action to resolve the problems.
After the demonstration CPAG spokesman Denis O’Hare said: “There will be more opportunities to see President Christofias; he needs to understand that we are not going to go away. We have been forced into this type of action because he hasn’t replied to any of our letters, including a request for a Presidential Review into why the Police refused assistance to buyers who have been defrauded“.
Police requested that banners reading “Shame on you Mr. President” were taken down as they were ‘disrespectful’ to President Christofias.
They also asked a man carrying a banner that read “Where are you Mr. President? Got no balls? We’ve got no Title Deeds!!!” to take it down as this too was ‘disrespectful’.
