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Cyprus property disputes to be funded by UK investors

Buyers are all too often being mis-sold properties in Cyprus by developers or their agents at UK property fairs or “property seminars”, with Cypriot lawyers sometimes being part of the problem

A UK company is preparing to provide legal funding to certain groups of property buyers to pursue legal action against Cypriot developers in Britain. The move is aimed at those who are desperate but cannot afford to take on developers or property agents.

Managed Legal Solutions (MLS), a company registered with Britain’s Financial Services Authority, will act as a broker, introducing UK property investors to potential litigants to enable them to have fair legal representation in the UK high courts, in return for a percentage of the financial settlement or compensation award.

MLS Managing Partner Ken Arnold was in Cyprus recently to investigate potential cases, focusing on UK property buyers in Paphos who are unhappy with the way their deal turned out.

Arnold confirmed to the Sunday Mail that for MLS to commit to a case they would confident of a positive outcome. He added: “What’s lacking right now is some cohesion between the ability of the claimants to defend their rights, and a motive for the other side to come to the bargaining table.

Also investigating the background to certain property deals in Cyprus is the Anglo-Hellenic & Cypriot Law Association, a bilateral of the UK’s Law Society. The association’s aims include providing advice on English, Greek and Cypriot law, and is chaired by Dr Katherine Alexander-Theodotou, a solicitor and registered member of the Nicosia Bar.

The Association decided to get involved – and offer its investigation services for free – after receiving a number of requests for help from UK buyers of property in Cyprus who had reached the point of desperation.

Buyers are all too often being mis-sold properties in Cyprus by developers or their agents at UK property fairs or “property seminars”, with Cypriot lawyers sometimes being part of the problem rather than the solution, through negligence or collusion with the developers. Another aspect is that agents can arrange the provision not only of legal advice, but sometimes of bank financing too.

When a buyer realises that the property paid for has not been completed, or is not to the agreed specifications, or discovers that the Title Deed is still in the name of the developer, or that as a non-resident ownership is restricted, then turning to the courts is often the only option.

In some cases, the buyer is forced to bring a court-case as a counter-claim against a developer who is suing for full payment under a contract that has not been performed.

But as many UK nationals have found out, having a property dispute heard in a Cyprus court involves major expense. When one also takes into account the fact that some Cypriot lawyers involved in disputed property deals are directly linked to the developers, aggrieved property buyers feel they don’t get a fair hearing in court.

The co-operation between MLS and the Anglo-Hellenic & Cypriot Law Association is aimed at resolving this dilemma. Arnold said: “We need to encourage groups and individuals to come forward with their own cases. The opportunity is there to get what people are entitled to, when before there was no hope.

The intention is for fully-prepared cases to be brought before the High Court in London, funded by investors introduced by MLS. There is a process under EU law to ensure that a UK High Court ruling is recognised and enforced in other EU member states, so the prospects of achieving a timely settlement or compensation award appear greatly improved.

Currently, the Title Deeds to more than 100,000 properties have still not been received by their owners, 30,000 of them non-Cypriot. Pressure groups such as the Cyprus Property Action Group (CPAG) have made it their business to publicise this issue and to lobby the Cypriot and UK governments for change. In a recent report CPAG cited receipt of 2,000 complaints.

Many feel the efforts of the Ministry of Tourism and others to encourage foreign investment in Cyprus can only be undermined by suffocating government bureaucracy and examples of sharp commercial practice. As Alexander-Theodotou put it: “The situation is like gangrene or cancer. The longer you leave it, the stronger it becomes, so you need to cure the patient before it eats up the body.

Contact details: The Anglo-Hellenic & Cypriot Law Association, 98 Dresden Rd, London N19 3BQ. Tel: +44 20 7263 6445

Copyright © Cyprus Mail 2009

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