AN 83-YEAR-OLD British widow who has been waiting 29 years for the title deeds to her home was shocked recently to receive an Immovable Property Tax (IPT) bill from her developer, Korfi Mountain Estates Limited, for €25,000 when it should have been around €430.
The IPT bill amounts to nearly 50 per cent of the original purchase price of the house near Lania, which was bought around 1980 for some €60,000.
(Editors note: see ‘Immovable Property Tax scam warning’)
In the last 29 years the developer has never approached the woman for money to pay the annual tax levy, waiting until now to collect a huge amount from the pensioner.
“I feel I am being bullied because I am a widow,” said the elderly woman who did not want to be identified because the residents on the estate are afraid of the developer. “This has been a complete shock to me.”
The woman said her husband, before he died two years ago, had even lent money to the developer in the past. “And this is how he treats me now,” she added.
When the British woman and other buyers on the same estate contacted the Cyprus Property Action Group (CPAG) about their problems with title deeds and demands from their developer, even CPAG were shocked, said the organisation’s Denis O’Hare.
“Imagine having to wait 29 years for your title deeds and then getting a demand for €25,000 in IPT charges!” he said.
“Another lady in her eighties also has a similar probate problem, so the inability to leave their property to their children is a major concern until this matter is sorted out.”
O’Hare said some of the residents don’t know how they will find the money demanded. He said other clients have paid “these illegal demands” but despite this have still not obtained their title deeds.
One of the buyers’ sales contracts, signed in 1991, states that title deeds would be available within two years – that was 17 years ago.
Until title deeds are issued, the developer can pass on to buyers any IPT he may pay to the government. They in turn can claim this back from the Inland Revenue but only up to a maximum of six years.
“If this lady who is being charged €25,000 had been charged the legitimate amount annually, and had she obtained her title deeds within the six years it is hard to see that she would have paid more than €430 – all of which she could have claimed back from the Inland Revenue,” said O’Hare.
However, he said many developers abuse the system in the government’s name, illegally charging at an annual rate of 50 per cent of the purchase price multiplied by the current maximum IPT rate of 0.4 per cent.
IPT is based on the 1980 price of the land, not the vale of the individual homes on a development.
“This particular developer is blatantly attempting to charge twice the normal scam rate, and even though he has never requested annual payments has added compound interest of 9.0 per cent under threat of non-issuance of title deeds. This is sheer extortion!” O’Hare said.
CPAG held a meeting with some of the buyers recently in Limassol and they decided to go to Limassol police to report the developer for fraud in obtaining money under false pretences.
“The first time I met them they were petrified but someone has to stand up sometime,” said O’Hare.
The group was accompanied by O’Hare and Linda Leblanc, who is also involved with CPAG. Leblanc said they were then sent to the local police station at Lania to make their statements.
She said the police were helpful but a few days later she received a call saying it was not a matter for the police but for the civil courts.
“This is clearly a criminal matter,” said O’Hare. “And in any case some of these elderly people may not have the five to ten years it takes to go through the failing civil courts of Cyprus!”
The group then decided to find out from the Land Registry what the 1980 value of the site was in order to work out what IPT the developer could actually be paying.
They also suspected the developer still had mortgages on the site, so even if all the buyers paid the IPT demands it was unlikely he could transfer the title deeds to them as long as he was in debt to the bank.
“Unfortunately, even after paying €80 to the Land Registry for searches, the group now appear to be getting stone-walling from the Land Registry officials as well,” O’Hare said.
CPAG have now written to the Chief of Police in Limassol and the Justice Minister asking why the victims were not allowed to report frauds “which are clearly criminal offences”.
“They will invoke the support of the British Government and the EU if need be, not to mention the thousands of other EU citizens defrauded in this fashion by developers in Cyprus,” said O’Hare.
He said the developer in question has not billed everyone on the estate, which has round 36 homes.
“He is picking off the older ones who are scared of him,” he said referring to the 83-year old. “But she is a very sturdy woman and is a fighter,” he added.
Copyright © Cyprus Mail 2008
