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Opposition MP Bids to Break the Deadlock on Title Deeds

Leo Leonidou
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An amendment to the law regarding the issuing of title deeds for property buyers is being sought by a DISY deputy in an effort to combat the huge delays facing property buyers caused by the recent property boom.

Last October, a law was passed with the aim of speeding up and simplifying the complicated procedure. But one year on, it has proved to be ineffective, with many people complaining that they are not receiving their deeds within the time period promised.

According to Ionas Nicolaou of DISY, the relevant authorities were not even aware of the change.

“Buyers were informed that they could go to the Land Registry and present a certificate of approval for the building work issued by the Interior Ministry’s Town Planning and Housing Department,” he told the Cyprus Mail. “They would then receive their deeds not more than a year later. Incredibly though, officials at the Land Registry were not notified of the changes and sent people away saying they could not register their claims for deeds.”

Nicolaou says he immediately met with then Interior Minister Andreas Christou asking for clarification on the situation and began working on a new bill whereby buyers would be able to have a title deed issued regardless of whether the vendor is willing.

George Coucounis, a lawyer specialising in the field, has said that when somebody has not received their deed, legal action has to be taken against the vendor with the appointment of a third party who would issue title deeds on behalf of the vendor. To be able to take such action, special provisions had to be included in the purchase contract, which should also have been submitted to the District Land Office within a specified time period.

But Nicolaou’s bill involves no legal action, “which is too time-consuming, expensive and complicated.” He is proposing that, “a buyer has the opportunity to apply to the Land Registry for the deed on presentation of Town Planning’s certificate of approval,” adding that, “in the case of a block of flats, the block must be divided into separate flats, with each buyer receiving a separate deed. As the law currently stands, only the developer can apply for the deeds and not the individual buyers.”

Nicolaou will be meeting with the Land Registry Department within the next fortnight to discuss his proposed bill, “and we will proceed if everything goes according to plan,” he said.“It is a huge issue that needs to be addressed, with stories of people waiting 19 years to receive their deeds not uncommon.”

Copyright © Cyprus Mail 2006

Caveat Emptor – Let the Property Buyer Beware

Editorial
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The property boom on the island over the past few years has led to many buyers not receiving their title deeds as the authorities struggle to stay afloat, swamped with applications.

In September 1999, it had been announced that thousands of property buyers who had not received title deeds from the seller could now take their case to court after the Supreme Court ruled that the issuing of title deeds of immovable property without the seller’s consent was legal and constitutional and should take effect as soon as contracts are lodged with the Land Registry Department.

The situation affects both locals and foreigners on the island, who are facing the problem of negligence by sellers in issuing a separate title deed and transferring the property to the the legitimate owner.

At the time, lawyer George Coucounis, who won the Supreme Court case, had said:

“Now, buyers have the right to refer to provisions of law, irrespective of the time they have deposited their sale contract with the Land Registry. Buyers can now apply to the court to order the seller to issue separate title deeds for the property they have bought.”

But the problem has not been solved with the Supreme Court decision, as thousands of buyers know only too well. A British couple who bought an apartment in Nicosia four years ago are still waiting for their title deeds despite their contract promising their delivery no later than two years following the purchase.

“The situation is unacceptable,” Stephen Hughes told the Sunday Mail. “Every time we call, the developer keeps stalling, telling us they will be issued next month.”

This week, Coucounis admitted to the Sunday Mail that, “there is still a problem in the issuance of title deeds and this is due to the three parties involved in their issuance, the developers, the purchasers and the appropriate authorities.

“There is a significant number of developers who do not take the necessary action for the issuance of separate title deeds due to financial benefits, irregularities in construction and a variety of other reasons.”

He added that in certain developments developers failed to pay off mortgages on the property, either to finance other investments of theirs or because they were unable to repay, with the result that title deeds remained with the banks.

This is a possibility that seriously worries Hughes. He said others in the complex where he had bought were all in the same boat, despite properties being bought in full, without mortgages. But what if the title deeds are being held by the bank because the developer had not off his mortgage on the property? “What happens if the developer goes bankrupt and the bank takes the flats, despite all of them being paid for?” he asked.

The developer of the specific property insists this is not the case, saying his company pays off all its debts within two years.

He says the problem lies elsewhere. “The deeds have not been issued as we have not received them. They are with the Land Registry Department.”

He estimated it would be another four to five months before the deeds were released.

“Everybody will get them in the end, so I don’t know why they are complaining,” he said.

But Chartered Surveyor and property valuer Antonis Loizou described the general situation as “extremely problematic”, saying he was actively campaigning for change.

“As a result of the property boom of the last three to four years, annual applications have increased from 7,500 to 14,000. The Land Registry Department and planning authorities simply can’t cope.

“The government is being asked to simplify the whole procedure and to reduce the red tape, but I don’t think they are listening and the problem is getting worse. If the international market learns of this, there will be huge consequences for the building industry in Cyprus, which is worth more than one billion pounds every year in overseas sales alone.”

He advised any prudent buyer do their homework. “If they want to sell the property on but do not have a deed, they should have a cancellation agreement in place with the developer,” he said. “This entails various risks though, for example a demand for capital gains tax or double transfer fees. It is not something I would recommend but is sometimes necessary.”

He said he was aware of cases where people had not been able to sell on their properties as they did not have a title deed.

According to Christos Ktorides, the Assistant Director of the Interior Ministry’s Town Planning and Housing Department, the delay in issuing deeds is caused by two main reasons. “First, there is a huge number of applications which need to be dealt with, and secondly, the problem lies with developers,” he said.

“They must receive certificates of approval for building work from the relevant District Office before they can apply for deeds. To be issued with a certificate, they must fulfil all planning and building criteria for their projects. Finding this problematic, they often proceed with building without a certificate of approval, meaning they do not receive the title deeds.”

Lawyer Coucounis agreed. “The most important reason why most of the developers do not take the necessary steps to obtain separate title deeds is that there are irregularities in the construction which they are not interested in rectifying,” he said.

“Also responsible for this situation are the town and planning authorities and the local authorities, who tolerate this situation. In order to deal with the problem, the government, through the House of Representatives, enacted a law for the legalisation of a significant number of irregularities regarding immovable properties purchased prior to March 24, 2005, valid for 18 months, until the end of September 2006.

“It is up to the government to extend the time period of the law. It enabled the legalisation of several irregularities but only to the point of the issuance of a certificate of completion of works, and not title deeds.”

He said that the law, which enables the purchasers to obtain separate title deeds for their properties, “provides for the appointment of an appropriate person to issue separate title deeds in the name of the vendor. In order for this to be done, legal action must be taken against the vendor for the appointment of a suitable person to issue the separate title deeds in the name of the vendor.

“From the issuance of a certificate of final approval and/or completion certificate, the procedure for the issuance of the title deeds can be initiated.”

He added that the procedure, “will be undertaken in the name of the vendor and all relevant applications will be signed by the suitable person appointed by the court in lieu of the vendor.

“From the moment the separate title deeds will be issued, the purchaser is qualified to bring legal action against the vendor, claiming the specific performance of his sale contract. In other words, the court will order the district officer to transfer and register the property from the name of the vendor to the name of the purchaser”.

But “only the purchasers who have deposited their sale contract with the District Land Office can use these remedies,” he cautioned.

“This is why a purchaser is also responsible for the problems in the issuance of separate title deeds.”

The lawyer concluded by saying that, “if they do not make sure they properly secure their rights at the beginning of the purchase transaction through solid legal representation, they will certainly face problems later on in the issuance of the title deeds.

It is important for them to deposit the sale contract with the District Land Office within the legally specified time limit and to obtain from the vendors a bank guarantee for the removal of the mortgage upon the land, if there is any, and for the issuance of separate title deeds.”

Such advice is little consolation for Stephen Hughes, who has done everything by the book, and is still waiting.

“Developers are building like crazy across the island and leading people up the garden path as promises of deeds rarely materialise. How can somebody build a block of flats, sell it on and yet still use it as security to borrow more money to build more flats to keep more people waiting for their deeds? They should not be allowed to start new developments abroad if they haven’t paid off their debts in Cyprus.

“This has been allowed to go on unchecked and has become general custom with no basis in legality. It deprives people of security of tenure. A deed should be a basic right of a property owner.”

His wife, Sarah, said the situation was so bad that, “it will put off people wanting to buy property on the island. We all want our deeds so we can pass them on to our children,” she said.

A spokeswoman at Laiki Bank said their policy was the same as all other banks and based on Land Registry regulations. “In order to take out a mortgage, a buyer must produce a title deed. If they do not have one, a sale contract will be assigned to the bank, so in effect, the bank owns the property.”

She added that, “it is the developer’s obligation to issue deeds, with the bank taking on the deed upon registration of the mortgage. If the developer does not have the deed, they must issue a title deed guarantee in favour of the buyer, who I advise to request sufficient security from the developer in the form of a title deed guarantee.”

So there you have it. Caveat Emptor: Let the buyer beware.

Copyright © Cyprus Mail 2006

Get Ready for a Cyprus Property Boom

Jacqueline Theodoulou
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Property, apartment and detached house prices are expected to increase by seven to 12 per cent in the immediate future, the House Commerce Committee heard yesterday.

According to the head of the Land Registry Department, Andreas Christodoulou, Cyprus is the cheapest country in the European Union when it comes to properties, apartments, houses and land. For this reason, he added, many Europeans are interested in coming to Cyprus and investing in land and properties.

“From studies that were carried out by the Department, it appears that the value of land will increase when it comes to plots of land, apartments and detached homes, and this is mainly due to the great demand that exists from European citizens,” said Christodoulou.

He stressed that the increase in prices would be within a legal framework and it would be estimated at between seven and 12 per cent, depending on the area.

In some areas the price increase would be higher than in others, he added. Predictably, foreigners are more interested in coastal areas, said Christodoulou, adding that Paphos, Larnaca and more recently Limassol were most in demand with Europeans.

But the Chairman of the Commerce Committee, DISY’s Lefteris Christoforou pointed out that Cypriots are already finding it difficult to purchase a home, without there being further increases.

“We believe that the acquirement of a home is a social benefit of utmost importance and it is a citizen’s right to have easy access to the purchase of property,” said Christoforou.

The fact that today prices have reached new heights and Cypriot citizens are finding it difficult to acquire their own homes, he added, is a matter that should preoccupy the state itself, which is obliged to offer this social benefit with reasonable prices.

“Unfortunately, it is a clear observation that there is a problem where the increase in prices is concerned, resulting in the working and middle class Cypriot family finding it difficult to obtain it’s own home; something that was taken for granted in previous years,” Christoforou continued.

In the meantime, he promised the Commerce Committee would continue to fight for the simplification of existing bureaucratic procedures, either at the Town-planning Department or other state departments, so that the public can have easy and rapid access to the relevant licensing for the construction of first homes.

Head of the Town Planning Authority, Yiannos Papadopoulos told the committee that the increase in price and value of plots of land was down to the rise in demand. And this is not because there is not enough land in housing zones but it appears to be due to the non-availability of land in these zones.

”For this reason we have suggested the need for mechanisms that will activate land, which is unused within housing zones”, Papadopoulos explained. This, he said, would involve urban redistribution – which is already partly under way and under evaluation by the Attorney-general – and the activation of land with the preparation of traffic webs for various city areas.

He also pointed out the need to examine the motives behind land-owners’ insistence on holding unused land.

Referring to the chaos that has consumed the town planning department over the past two years, due to the increase in applications for town-planning permits, Papadopoulos said the department was already processing a new programme with the Interior Ministry, which by 2007 will give them the ability to issue licences within three months of application.

Copyright © Cyprus Mail 2006

Cyprus Property Cheats

Nigel Howarth
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With regards to property cheats, on your Letters page the problem stems way before this.

Firstly you need your property developer, who comes along with ‘Horse, Saddle and Spurs’. He decides to build, puts down the base for columns and his architects tell him they are wrong.

He doesn’t rectify this problem and so the architects walk off the job. The developer hires an engineer and pays him a backhander to get the development signed off.

Then it gets better as the local Town Hall notes certain faults in construction and informs building control in Larnaca, voicing the same concerns.

They pass the situation on ETEK in Nicosia, and just when we think that we are getting somewhere by arranging an appointment with them and that the problem would finally be solved, we are told that they have no power and that they can only advise developers.

Yes it’s true, EU countries have the law in place, even in the UK to avoid this happening. But in Cyprus we presume it’s not what you know, but WHO!!!

Surely Cyprus being in the EU needs an urgent revamp of the law governing planning, building control, issuing of title deeds, (we have been waiting 6 years for Title Deeds). All the above needs urgently to be brought to line.

F. P. Sidonio, Larnaca

Copyright © Cyprus Weekly September 15 2006

When the Dream Turns into a Nightmare

Editorial
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It’s common knowledge that Cyprus offers a more relaxed way of life. We don’t generally rush around and feel the stresses and strains of a big city, especially in Paphos. Naturally, that feeling of not being all that aggressive permeates into our everyday life.

Banks are not open for very long, the police are not that vigilant when it comes to minor traffic violations and the shopping hours are rather Mediaeval:

But when that ‘laissez faire’ attitude starts affecting people on a personal level then perhaps it is time we actually sat up and took notice and started taking some action.

The Cyprus Weekly received a letter from a couple who had recently relocated like so many of their compatriots from the United Kingdom for the “greener”, less stressed and more relaxed pastures of Cyprus.

The couple, who asked not to be named bought an old stone house in the Paphos village of Amargeti. I reproduce their letter below with their permission:

“Dear Sir

Since my wife and myself have been here in Cyprus for nearly a year, we have come across nothing but problems from government departments and the legal systems. We bought an old stone house in June 2004 to be renovated. It was ideal for us, being small and compact.

We were promised various updates from our solicitor who had power of attorney to sort everything out on our behalf as we were in the UK. She proved to be utterly use- less and we got little response from her and the developer.

We had to come over in April 2005 to see how things were progressing; we found very little work done on the house.

We had informed the builder and solicitor, our flights were booked for five months later and the UK removal van had been booked.

We received a telephone call two weeks later telling us that there were electrical problems but they would be sorted. When we eventually arrived, we found we were on shared electricity with our neighbour, who told us it was only for about five weeks. It is now over one year and we are paying his electricity bill as well as our own.

The house was a mess, it was quite obvious it had been a rush job, cheap and shoddy materials were used, bad workmanship and the tiles we had chosen for the floor and walls and paid for, had been replaced with chipped seconds. When it rains, the roof leaks and we are flooded.

Dogged

I went on several occasions to the planning department to see how long all the licences and permits would take; they would not give me any definite details as our file had got lost under a pile of big building form guys – I had been back several times for our permits and have been told by staff: “If you don’t like the Cyprus way, go back to England!”. I have had a similar response from AIK when I tried to get on our own electricity; I was shouted at as I could not give a reference number and the door was shut in my face.

I was hoping to find work here but have been told because I am English there are no jobs for me.

I did manage to obtain work for a month, but left because my employer refused to pay my wages of about £400.

All this has caused my wife’s illness to get worse, not better. We hoped the climate here would help her to improve and now she cannot bear to be left alone.

Call this country an EU member when it goes against EU laws and nationals! They want us to come and live here. They took our money and after that they refuse to cooperate.

The favourite phrase here seems to be “not my problem, it’s yours.”

The faults of the house (which are many) are to be the developer’s responsibility. We have had to pay various subcontractors to sort the problems out, some I have done myself. It is a total nightmare; it makes us wonder if life in Cyprus was worth the move from England.”

It is many peoples’ dream to relocate to greener pastures; whether it is a repatriation like many of the South African, British and Australian Cypriots or a relocation like so many of the other cultures and nationalities who have relocated to Cyprus in search for a better life for whatever reason.

But when that repatriation is dogged by attitudes and mindsets that are detrimental and damaging both by the people who are giving it out and by the people who are taking it, then it is perhaps time that we sat up and took notice; and more importantly, take some action.

I managed to meet the couple who sent the letter to The Cyprus Weekly. They are two average people; the wife is quite sickly with all sorts of spinal and osteopathic problems.

They made a specific request that the cupboards and work surfaces in the kitchen be at a lower level, so she would be able to reach down as she can no longer reach upwards. Those requests were totally ignored, as were all their other ones.

Quick buck

One needs to ask in this situation what can be done; do they go to the developer or speak to their lawyer? From the letter, it is quite clear that the developer was making a quick buck and took these people for a ride.

Surely the lawyer should have been dealing with the planning departments, electricity people and even the developer?

These people certainly paid enough money up front for these “legal” services.

So what do they do now?

Who can they approach? Is there any way these people can claim compensation, as is expected in a modern country where golf courses and five star spa hotels and resorts are being used to sell Cyprus as an idyllic relaxing destination?

With regards to the developer involved, the couple begged that we do not contact them as they fear the repercussions, while the lawyer is always unavailable for these people when they try and contact her.

What we don’t realise is that these people are potential contributors to the economy; what would Paphos be without the tourists and the ever-increasing number of relocating nationals?

It is true that there is a significant number of British people living here who do whine and moan about the Cypriots and they have rather set a precedent for their compatriots.

But it’s not everyone and a very large amount of the over 30,000 Brits living in the Paphos region have businesses and services they are offering.

It is very sad and embarrassing that the people who wrote the letter have only had such bad experiences since deciding to move to Cyprus; we know that it is still a beautiful country and there is still that famed Cypriot hospitality to be experienced but what happens once that stops and people pass the buck and Cyprus stops being a favoured destination? Whose problem will it be then?

If there is anyone who can suggest a way or an organisation that can help these people, please contact me through The Cyprus Weekly at [email protected].

Copyright © Cyprus Weekly September 15 2006

God Help Us if there’s an Earthquake

Editorial
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Urgent action has been called for after serious concern emerged over the stability of some homes and buildings in Peyia.

A spokeswoman of the Peyia Community Association said yesterday that buildings had been constructed in gorges, on illegal landfills and dry riverbeds, some streams even having been diverted so that building can take place. “We have concerns over the geological stability of many areas,” she said.

In the last five years, Peyia has been the target of unprecedented construction, with thousands of new buildings, some of which are as high as five storeys.

This type of development has radically altered what was once a quiet, rural village, which has more than doubled its population, most of whom are now non-Cypriot.

“Much of the land seems to be unstable and unsuitable for safe construction of the many new multi-storey apartment blocks that are under construction in Peyia. I dread to think what will happen if there’s torrential rain or, God forbid, an earthquake,” she said. “At the moment, even a little rain causes flooding, as there has been no adequate infrastructure planning.”

Last week, the Association met with Green Party leader George Perdikis, who was visiting the village. “He has helped us with ongoing problems we have, such as voting registration, and he is the only politician to have done so. He is interested in our Association and has been looking into our concerns.

“While showing him around, we identified certain sites, and he was shocked by what he saw, describing it as a very bad situation.”

The spokeswoman said she wanted the general public to see why the organisation was highlighting these issues and invited journalists, politicians and government officials to visit Peyia for a guided tour.

“We are often criticised for complaining. This is a big issue that covers unsuitable and dangerous building practices, lack of title deeds, consumer protection, town planning laws, environmental and aesthetic concerns and public safety. We are concerned that this has been allowed to happen in Peyia, which has now become a perfect model for ‘how not to do it’.

“Unfortunately, the same mistakes are being made in other villages. We are not anti-development, but we do call for sanity and control so that due consideration will be given to infrastructural needs and the application of the principles of sustainable development.”

As well as Peyia, Pissouri and Tala have also been heavily targeted by developers, with fears that many buildings constructed over the last couple of years will soon show problems. Some buildings in Pissouri are already facing difficulties, even before completion of construction.

“Some affected home-owners have started proceedings against major developers but the legal options are limited and complex. Something needs to be done quickly to stop the construction but court cases are too time-consuming, with people’s requirements not met, such as construction continuing even though a court case has been registered.”

She added that many decisions were taken at town planning departments outside Peyia at the highest level. “The Municipality doesn’t have as much control as it would like.”

The authorities in the village issue building permits but planning permits come from the district level and above.

The Mayor’s Office at Peyia Municipality said many constructions were out of their hands. “There is nothing we can do but issue permits when planning is authorised from above,” a statement said.

Speaking to the Cyprus Mail, Perdikis said that the Green Party “is very concerned about the situation, not only over its environmental aspect but also on the issue of people’s safety.”

He said the matter will shortly be brought before Parliament.

Copyright © Cyprus Mail September 9 2006

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