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Cyprus could suffer as EU monitors deeds fiasco

Despite an assurance by the government that an end to the title deeds shambles is in sight, many desperate home buyers are putting their faith in the EU in an effort to safeguard their properties.

DESPITE an assurance by the government that an end to the title deeds shambles is in sight, many desperate home buyers are putting their faith in the EU in an effort to safeguard their properties.

The move comes after the EU Parliament recently froze hundreds of millions of euros in EU payments to Spain as a result of illegal practices perpetrated against property buyers – the EU ruling was largely as a result of buyers petitioning Brussels.

MEPs were acting on complaints from Britons and other homeowners who feared their homes might be bulldozed.

In a move that sent shock waves to Nicosia, the European Parliament flexed its muscles and voted overwhelmingly to freeze hundreds of millions of euros in Spain’s EU funding.

It is now understood that the EU are planning to turn their attention to Cyprus, with Edward Macmillan-Scott the Vice President of the EU Parliament saying publicly that he is “appalled” and “enraged” by what is happening on the island.

The Sunday Mail can reveal that the European Commission has addressed a request to the government asking for detailed information on the legal provisions and practices regulating and operating in this sector.

The Commission has also warned it will take the “necessary measures” if it can establish the existence of infringement of EU law.

The fallout from the deeds scandal is widespread, with a recent study by ‘Property Abroad’ online showing that Cyprus has been knocked out of the top five destinations for property buyers after a wave of negative press.

In an attempt to cool tempers, Interior Minister Neoclis Sylikiotis went on record last week to say that legislation was in process that would bring an end to the problem affecting the 100,000 properties bought by Cypriots and around 30,000 foreigners, most of whom are British.

His statement directly contradicted that given a month earlier when one of his colleagues disclosed that the only legislation under review was another amnesty for developers who had broken the planning laws and were unable to obtain a Final Certificate of Completion and minor legislation to protect future buyers was being developed.

Last night Cyprus Property Action Group (CPAG) spokesman Denis O’Hare called on Sylikiotis to clarify the situation.

There is a very easy way to put people’s minds at ease – show us the legislation, tell us about it,” he said.

We will happily come and see the minister. Knowing how many people can’t sleep at night, I’m sure any responsible minister does not want the suffering to continue. I await his call,” he added.

In a recent letter to its thousands of supporters, CPAG urged them to complete individual online petitions on the EU Parliament website just as the Spanish buyers had done.

Property analysts say Cyprus could suffer the consequences to the tune of millions of euros in frozen funds if it fails to act on the title deeds issue soon.

The ongoing fiasco which is putting thousands of families at risk of losing their homes in Cyprus has been getting uglier lately, as fed-up residents have said they will resort to direct action.

Until recently, Cyprus had seemed like the ideal place for pensioners to spend the rest of their lives, but for most their hopes were quickly marred by property scam nightmares and the title deed shambles.

A recent CPAG poll showed nearly 100 per cent of foreign buyers would not have bought in Cyprus if they had been informed of the practice of withheld title deeds and developer mortgages.

The Cyprus petitions are based on Article 17 (Property Rights) and Article 38 (Consumer Protection) of the EU Charter of Fundamental Rights.

CPAG claims property buyers in Cyprus are currently being denied these rights by the practices of developers withholding title deeds to properties in order to take out mortgages on the land on which these are constructed.

Shockingly, there is no legal obligation for the developer to inform potential buyers of the presence of a mortgage when they are buying, nor is there any legal obligation for the buyer’s own lawyer to search for any mortgages.

Around 100,000 properties in Cyprus are without title deeds, mainly because developers have mortgaged land on which these properties are built to the tune of €4 billion which prevents transfer of title.

Land Registry officials have confirmed that 30,000 of these properties have been bought by foreigners, which means that at least 60,000 foreigners must be in this precarious position, the vast majority being British.

O’Hare added: “It is clear that in a worsening economic climate with the Cypriot developers receiving little or no income from sales the situation can only get more dire.

With non-payment of their mortgages and these unethical banks just adding the overdue payments to the principle loan a huge problem could be building up in the banking system.

We therefore urge all buyers to find out whether their developer has a mortgage on their property or development and to check with the lender bank as to whether the developer is making repayments because the sooner any problems are discovered the better the options may be for the buyers.

Details of how to petition the EU Parliament and how to find out about developer mortgages can be found on CPAG’s website (www.cyprus-property-action-group.net)

Copyright © Cyprus Mail 2009

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