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Cyprus property association president on the record

EARLIER this week George Strovolides, president of the Cyprus Land & Property Owners Association (KSIA), was interviewed by Rosie Charalambous on CYBC Radio 2. With so many banks and builders in trouble, are we going to see such a slowdown in the construction sector that some of the mortgages held by banks will claimed if […]

EARLIER this week George Strovolides, president of the Cyprus Land & Property Owners Association (KSIA), was interviewed by Rosie Charalambous on CYBC Radio 2. With so many banks and builders in trouble, are we going to see such a slowdown in the construction sector that some of the mortgages held by banks will claimed if developers go under?

The Title Deed problem has been going on for many years, including a celebrated case of a developer in Limassol dating back to the 1970s – the buyers of those properties are still waiting for their Title Deeds. It has been estimated that as many as 100,000 people are affected by the problem.

Mr Strovolides said that lessons from the past have not been learnt. Something has got to be done now, “assuming that it’s not already too late“. If measures are not taken and there is a significant downturn in the market and developers find themselves in dire straights we are going to have “a very severe problem“.

Currently the law allows property developers to mortgage people’s homes to finance their next project. This creates a very dangerous situation if there is a downturn and property prices tumble.

Could people lose their homes?

Rosie asked “If the global downturn continues the way it’s going, inevitably there are going to be bankruptcies?

Yes, yes” replied Mr Strovolides. “And if we are talking about 100,000 outstanding cases, clearing the backlog is going to take a bit of time – and the question is do we have this time?” he added.

Rosie asked “Can you see the possibility that if one or to of the big developers do get into severe financial difficulties that people could lose their homes.

I am afraid it is possible” replied Mr Strovolides “This could happen.

Problems with lawyers

Mr Strovolides went on to say “There is another problem with solicitors; in many cases there is a clear conflict of interest as these are solicitors suggested by the developers themselves. They cannot safeguard the rights of the buyer but rather they have an incentive to safeguard the rights of the developer which is completely wrong.

We are starting a round of meetings with developers, with the Bar Association to push them to put their houses in order. This is what has to be done“.

Planning amnesties – are they enough?

On the subject of planning amnesties Mr Strovolides said “The Interior Ministry did try to have a (planning) amnesty some years ago, but it didn’t quite work.

Adding that another amnesty would help some “but that is not enough. I’m afraid we have to hit the problem on all fronts to ensure that the impact of the financial crisis is not catastrophic.”

Is there any hope?

Rosie asked “Do you really hold out hope – it has been a problem for 38 years or more?

Mr Strovolides replied “You have to keep up the pressure. Once it’s clear that everybody involved wants to do something about it, it will be for the benefit of Cyprus“.

What about ‘the system’?

Unfortunately, the system is such that we have created the opportunities for the fraudsters to do their thing – because of the relaxed attitude in handling this issue.” Mr Strovolides said, adding “but hopefully things will be different“.

Click here to listen to the whole of the interview between George Strovolides and Rosie Charalambous.

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