Home Blog Page 635

Planning: amnesty & development proposals

Nigel Howarth
-
0

WE understand that a bill concerning an amnesty for property owners who have committed urban planning violations will be submitted to the Cyprus Parliament before the end of the year.

Speaking to Parliament, Interior MInister Neoclis Silikiotis said: “It’s not an issue of urban amnesty only, but it is about mortgages to banks or other urban planning violations. We try to clarify all this with laws. The victim in this case is the buyer, who was not aware of these problems”.

The Interior Ministry’s budget for 2009 has been increased to help facilitate the computerisation of public services and the simplification of the Urban Planning and Land Registry procedures. (We understand that Cyprus currently ranks last in the EU in the sector of electronic governance).

Development proposals

IN a separate development, the Urban Planning Department is proposing to allow the construction of smaller apartments in higher blocks and introduce measures against land owners who refuse to release their land for development.

It seems that the Department wants to reduce the minimum area for one-bedroom apartments. Currently, the minimum size for a one-bedroom unit is 55m2, but the Department may look to reduce this to 45m2 or even 40m2. This will have the effect of pushing values down.

The Department is also proposing the granting of permits for the construction of 25 storey blocks of apartments.

In an interview with StockWatch, Urban Planning Manager Mr. Christodoulos Ktorides said: “I would say that prices will return to normal levels. The current property prices are not real and must return to their normal level. There will be a fairer and mass offer; it will be a form of super market of economic sale and production of flats”.

Concerning the construction of high-rise apartment blocks, he said: “We will select areas where development will not cause traffic and environmental problems and we will offer increased building ratio and more floors. We won’t go on with proposals to impress but with feasible proposals”.

And with regard to the proposed measures land owners refusing to release their land for development: “If someone has a mature land ready for development and fails to divide it, he will be punished for not allowing development. We will give counter-incentives so that they are enforced to develop it the soonest possible. We will start with incentives and we will end up with serious counter-incentives”.

MacAnthony malpractice judgement by NFOPP

Nigel Howarth
-
0

In a recent judgement against MacAnthony Realty International (MRI) by the National Federation of Property Professionals (NFOPP):

“The tribunal were appalled to hear of the Company’s misleading business practices, including unfulfilled promises of guaranteed rental returns and misleading descriptions of the facilities that would be available to owners.

The Company accepted deposits for unbuilt and unidentified properties. In some cases a purchase price was not included in the documentation provided to buyers. These problems were compounded by the Company’s poor service, including their reluctance to resolve grievances after sales had been agreed

Despite these omissions, the Company’s position is that there is no right of cancellation by buyers, and therefore their deposits have not been returned to them. As a result members of the public have lost considerable sums of money resulting from false and enticing statements made by the Company.”

The full text of the judgement is below, and may be the subject of an appeal by MRI.

THE NATIONAL FEDERATION OF PROPERTY PROFESSIONALS

The Determination by the Disciplinary Sub-Committee of Case No. 52346

The Determination is dated: 2 September 2008

The Respondent:             The Complainants:

Mr D MacAnthony
MacAnthony Realty International
C/Jancito Benavente S/N
Marbella
Malaga
Costa del Sol
Spain

The Hearing

1.1   The NFOPP Disciplinary Sub-Committee sitting as a Tribunal met at Arbon House on Wednesday 20 August 2008.

1.2   The Tribunal was chaired by Mr J F Atkins assisted by Mr I Lumbard and Mr M Hayward.

1.3   In attendance were Mr M D K Jones, the Business Practices Officer, Mr D Oliver, the Compliance Officer and Mr P Bolton King, the Federation’s Chief Executive.

1.4   The Complainant was in attendance at the hearing.

2.     The Business Practices Officer alleged the following, breaches:

Rule 2(2) No member shall do any act (whether in the business of estate agency or otherwise) which:
–     (h) involves unprofessional practice or practice that is unfair to members of the public.

Rule 2(3) A member who is a principal shall be responsible for the proper supervision of his partners, fellow directors and staff in the conduct of his business and shall be liable under these Rules of Conduct for any breaches as if such breaches had been committed by him.

Rule 6 Duty to abide by the aims and rules of the Association.

Rule 7(1) A member shall not seek business by methods which arc oppressive or involve dishonesty, deceit, or misrepresentation. Members shall not use any business term, name or initials which could cause contusion between their own business term, name or initials which could cause confusion between their own business and that of the Association. In pat Ocular, the word ‘HomeLink’ or the initials `NASA’ may only be used in their correct context with reference to the Association.

Rule 12 Duty to applicants and others.

The Federation’s Chief Executive entered a plea of not guilty on behalf of the Respondent.

The Tribunal’s Decision

After hearing the evidence and after deliberation the Tribunal’s findings were:

Rule 2(2)(b) – Proven
Rule 2(3) – Proven
Rule 6 – Proven
Rule 7(1) – Proven
Rule 12 Proven

The Business Practices Officer advised that the member had no previous disciplinary record prior to the date of the hearing.

The Federation’s Chief Executive advised that no plea in mitigation had been received from the member, however; he did refer the Tribunal to previous correspondence received from the member and his legal representatives.

Penalties

Rule 2(2)(b) – £1000
Rule 2(3) – £1000
Rule 6 – £1000
Rule 7(1) – £1000
Rule 12 – £1000
Costs – £163

The Tribunal made the following statement:

“We have today heard a number of complaints concerning the practices arid service of MRI International (the Company). Mr D MacAnthony is Chairman of the Company and he was a member of the National Association of Estate Agents (NAEA) when the relevant breaches occurred. Rule 2(3) of the NAEA’s Rules of Conduct confirms that members are responsible for the conduct of their staff.

A number of the complainants attended the hearings to represent their cases and were questioned by the Disciplinary Sub-Committee (the Tribunal). The Tribunal were disappointed that despite a previous adjournment of the hearings at Mr MacAnthony’s request, neither Mr MacAnthony, nor a representative from the Company, nor a legal representative of the Company, were present at the hearings.

The Tribunal were appalled to hear of the Company’s misleading business practices, including unfulfilled promises of guaranteed rental returns and misleading descriptions of the facilities that would be available to owners. The Company accepted deposits for unbuilt and unidentified properties. In some cases a purchase price was not included in the documentation provided to buyers. These problems were compounded by the Company’s poor service, including their reluctance to resolve grievances after sales had been agreed.

Despite these omissions, the Company’s position is that there is no right of cancellation by buyers, and therefore their deposits have not been returned to them. As a result members of the public have lost considerable sums of money resulting from false and enticing statements made by the Company.

In all of the cases considered by the Tribunal the complainants were represented by Legal Independence/Martin Echevarria, who were recommended by the Company. Although the Tribunal’s considerations related to the Company and not the professional conduct of Legal Independence/Martin Echevarria, the Tribunal cannot emphasize too strongly the particular importance of independent legal advice when purchasers are considering purchasing overseas properties. The Tribunal is currently considering whether to take this matter further with the Law Societies /Bar Associations in the relevant countries

The complaints heard today were a sample of many more complaints received by the NAEA about the Company.

The irresponsible practices brought to light by these cases risk damaging consumer confidence and the reputation of estate agents working in the UK and overseas. The NAEA expects the highest standards of practice and ethics from its members. The level of the fines imposed reflect the seriousness with which the Tribunal views the behaviour of the Company, and therefore of Mr MacAnthony.

The NAEA has received a resignation of membership from the Company. As membership is individual and personal, the Tribunal understands the NAEA has presumed that Mr D MacAnthony has resigned. The Tribunal welcomes this development as they would have had no hesitation in terminating his membership in addition to the financial penalties imposed.”

Signed

Mr. J F Atkins FNAEA (Honoured)
Chairman – Disciplinary Sub-Committee

(See also MRI Overseas Property withdraws from NAEA)

Is our home in Cyprus mortgaged?

Nigel Howarth
-
0

I WISH I’d read your excellent magazine before we bought our home in Cyprus as I think we may have made a couple of mistakes. We foolishly used our developer’s lawyer to check things out and draw up our contract of sale and I’m worried about a few things.

  • Can we find out whether the Cypriot developer has mortgaged on the land where our home is being built and if he has, is there anything we can do about it?
  • Our developer’s name is on our contract along with several other names. Do you know who these other people could be?
  • Can the developer or the other people mentioned in the contract mortgage the land on which our house is being built even though we have signed a contract?

I know you must get many questions, but I’d be very grateful if you could give me your advice.

Answer

The number one golden rule when buying property in Cyprus is to take independent legal advice and not to sign any papers or hand over any money until you have done so.

Unfortunately many people fall into the trap of using the so-called “free” legal services offered by the property developers or use a lawyer who has been introduced or recommended by the developer. Regrettably, it costs some buyers many times more to sort out the problems than if they had paid an independent lawyer to act on their behalf in the first place!

The British High Commission in Nicosia publishes a list of English-speaking lawyers who are able to offer advice, which it has graciously allowed me to put on my website along with a number of their other ‘must read’ documents from the High Commission. You can find them in the download area of my website.

To answer your specific questions:

  • It’s relatively straightforward to find out whether there is a mortgage on the land. The Land Registry can carry out a Title search and produce a report showing what the situation is. You’ll may need a lawyer to arrange this on your behalf if you are not in Cyprus – the N50 Land Registry Search Application Form is in Greek and it can take the Land Registry quite some time to complete the search. If you want to use a law firm, I suggest you instruct one of those listed by the British High Commission (see above). When you discuss the matter with the lawyer be sure to have your contract with you. This should contain the reference details of the site that will enable the Land Registry to carry out the search. If you want to do it yourself, take the completed N.50 form with you to the District Lands Office together with your passport and contract.
  • The other people whose names are on your contract are most probably the owners of the land. In Cyprus there is a system known as ‘Antiparoxi‘ which is an agreement between the land owner and the property developer. It enables the developer to build on the land without having to pay for it. But in exchange for the land, the developer will give the land owner one or more of the properties he’s building. (Your lawyer will be able to check this out with the Land Registry as part of the Title search).
  • Under certain circumstances it is possible for a developer to mortgage the land on which he is building even though he has sold properties on it. (I personally know of several cases in Paphos and Limassol where banks have granted mortgages to developers in this situation).

The Cyprus Government is well aware of the problems with some of the property developers here. Three years ago it promised to “arm property buyers with an arsenal of weapons against unscrupulous property developers“. But so far, it hasn’t lifted a finger to help!!

Cluttons comes to Cyprus

Nigel Howarth
-
0

Cluttons, the London based partnership of surveyors, has announced that it is extending its presence in the Mediterranean basin with an associated office in Athens. Cluttons Greece will oversee the markets of Greece and Cyprus and focus primarily on high-end residential properties.

Robert Key, Managing Director of Cluttons Greece, commented: “Despite current global economic conditions, we are very confident in the future of the Greek and Cypriot luxury homes markets. By marketing properties through our international network of offices we are able to offer private home owners and developers alike the best possible exposure foreign buyers. We also look forward to introducing Greek buyers to opportunities that Cluttons has access to around the world.”

Founded in 1765, Cluttons LLP has a network of offices in the UK, Europe, the Middle East and South Africa. The partnership offers a very wide range of professional property management, agency and consultancy services across the commercial and residential sectors, for both investors and occupiers.

Is the Cyprus property market frozen?

Stefanos Evripidou
-
0

THE ONCE lucrative property market has come to a standstill as buyers, sellers and banks wait for the full effects of the global credit crunch to show, said property experts yesterday.

According to Charalambos Petrides, Vice President of the Property Valuers’ Association, the credit crunch has come at a time when the property market is due for a correction.

“Prices had to settle down, otherwise we’d have problems in the future. It just so happens to have coincided with the credit crunch, and with sterling’s losses against the euro. The Brits are selling instead of buying, and repatriating capital so the effect is double,” said Petrides.

However, the combined effect of a market correction and global economic downturn remains anyone’s guess, added the director of Landtourist Estates.

“Sure there are effects on sales but no one knows how much they will be. It depends on the type of property and how deep the recession will be,” noted Petrides.

“There is a freeze in the market. Land Registry figures are a good indicator of the market right now. Property sales have gone down by around 40 per cent.,” he said.

The Land Registry figures for 2008, based on contracts of sale and title deed transfers, reveal sales in Famagusta have dropped by 45 per cent compared to the previous year, Larnaca by 40 per cent, Paphos by 38 per cent, Nicosia 15 per cent and Limassol 12 per cent.

Business for Nigel Howarth, a property adviser to British expatriates in Cyprus, reflected a similar trend.

“Since January things have quietened down quite a bit. I would say interest in buying property has gone down by two thirds,” he said.

The huge drop in sales can also be explained by the meteoric rise in demand for real estate in 2007.

“You have to bear in mind that 2007 was an exceptional year. The total amount of property sold in 2007 reached €4.53 billion, while between 2002 and 2006, the annual figure floated between €1.15 and €3 billion,” said Petrides.

The downturn was to be expected given last year’s outstanding results and spiralling prices, but the effects have not been equal across the island.

“Limassol and Nicosia are not so affected. The coastal regions with mass produced flats of no architectural value certainly have a problem. It’s hard to sell them now with the credit crunch. There’s a lack of cash and no one is buying,” said the Vice President.

Nicosia is mostly a local buyers’ market and prime locations won’t be affected.

“Time will tell. Everyone is adopting a wait and see policy right now. The buyer is waiting, the seller does not want to sell with the market like this, and the banks are waiting to see what’ll happen next before loaning more. It’s a frozen market,” said Petrides.

Michael Thomaides of Thomaides Properties in Limassol agreed that there was little movement in the property market.

“Sales are terrible, whoever says otherwise is lying. There is a small Russian flow for top end properties, but the English market has crashed,” he said.

“The downturn began at the beginning of the year. Trying to sell anything now to the core market above €2,000 per metre will prove very difficult,” he added.

“Resales are moving better than new properties but it’s a buyer’s market. Finance is the key. Even the millionaires are not willing to spend their own money.”

Finance is not just an issue for buyers though, noted the sales director.

“Banks need to support the good developers who’ve been issuing title deeds and doing everything properly. A lot of cowboys came into the market and thought it would last forever,” said Thomaides.

“Some developers are desperate for cash now. One in Larnaca is offering 20 per cent commission on sales, which is crazy.”

Regarding the prospect of VAT on land prices from next January, Thomaides was clear: “Putting VAT on land is suicide. It will destroy the market.”

Yiannis Thomas from Nicosia insisted that the true extent of the fall in sales was there for all to see in the government offices dealing with property transactions.

Thomas, who dabbles in property speculation, described his recent visit to the Tax Office to the Cyprus Mail.

“Usually the place is packed with huge queues of sellers going to pay their capital gains tax on profits of the sale. It can take a whole day sometimes. Yesterday I walked in and it was just me and the employees.”

“I asked the girl behind the counter what’s going on, and she replied there were no sales any more,” he said.

Copyright © Cyprus Mail 2008

Cyprus property trends: Does Google hold the key?

Nigel Howarth
-
0

EARLIER today I was speaking with a journalist from one of the local newspapers. Needless to say, our conversation was on the subject of property, including the interest being shown by foreign buyers.

As the earlier article “Cyprus property: should we fear a slump?” by Stefanos Evripidou reported, there are many conflicting views by various ‘interested’ parties and it is extremely difficult to get an accurate picture of the situation.

As far as I’m aware, the only ‘accurate’ source of information on the number of properties being sold in Cyprus and the prices they are achieving is the Land Registry. Virtually all Contracts of Sale for property are deposited there, and so it should be a relatively straightforward process for the Land Registry to analyse their database to provide this information.

Indeed, earlier this month the Land Registry produced figures showing that 29,949 non-Cypriot buyers were waiting for their Title Deeds and that in the last three and a half years, 4,400 property Titles had been transferred to non-Cypriots. These figures immediately scotched the widely reported assessment that it takes between five and eight years to get Title Deeds. A bit of simple arithmetic shows that the average time to get Title Deeds is more like twelve years, if past performance is anything to go by!

Does Google hold the key?

After we’d finished our conversation, I thought some more about his question. It occurred to me that Google may hold the key to answering at least some of his questions about the Cyprus property market.

Google Trends is a tool from Google Labs that shows the popularly of Internet searches from the beginning of 2004 to now. By simply visiting Google Trends and typing ‘Cyprus property’ the amount of interest being shown by Internet users using Google to search for Cyprus property over the last four years is displayed as a graph. This is what I discovered:

As you can see from the graph below, the index peaked at around 1.75 in the middle of 2004. At the present time, the index is on a downward trend around 0.5. So we could say that interest in those looking for Cyprus property has dropped by somewhere in the region of 70%.

Google trends for Cyprus property - all regions

Looking at the results of Google searches emanating from the UK below, the situation is marginally worse. From a peak of around 1.8 in July 2004, the index is now hovering around the 0.5 mark.

Google trends for Cyprus property - UK region

OK, this isn’t a very scientific method of finding out what’s happening in the Cyprus property market. But Google does paint a worrying picture for those trying to sell property here.

1...634635636...693Page 635 of 693