LORD Jones of Cheltenham from the House of Lords has asked the UK government whether it will take the steps against Cypriot companies and what it will do to protect British homeowners in Cyprus and those looking to buy. The comments come after the revelation that around 100,000 property owners awaiting Title Deeds will not be helped by proposed measures from the Cyprus government.
UK foreign office minister Lord Malloch-Brown revealed that the minister of interior for the Republic of Cyprus told the British High Commissioner on 27 April 2009 that “the Cyprus Government will introduce legislation to speed up the issuing of Title Deeds, but this legislation will only apply to future cases“.
However, this contradicts what the Minister, Neoclis Sylikiotis, said at a Land and Building Developers Association meeting in May. According to a report by Cyprus Property Magazine, Sylikiotis said legislation would remove the main reason why developers effectively block the issuing of deeds and bring an end to the problem for those homeowners already affected.
Title Deed transfer delays arise because the developers who sold the properties have mortgaged the land on which the homes are built. Buyers are then at risk of losing their properties because the banks’ claims to the developers’ money take precedence over buyers’ land ownership. The issue affects both Cypriot nationals and foreigners.
Strict measures
Panayiotis Michaelides of Aristo Developers said Lord Jones’s comments were “extreme and strict“.
Kevin Maddison, chief executive of IFA network ROPUK, said there were already ways property buyers could protect themselves and ensure they obtained deeds, as long as they were willing to pay the real estate transfer tax. “With our draw-down mortgage facility, our clients become co-owners with the bank and the developer cannot mortgage the property separately,” he said.
However, the news is likely to shake confidence in the market and several developers also stressed the need for the Cypriot government to take further measures. Panayiotis Makedonas of Country Rose said: “We understand that there is an issue and the government should definitely take immediate action to help more existing property owners, in order to improve our image which has suffered over the years.”
One developer told OPP the government had its head in the sand in the hope the title deed issue would go away, that the impact on the property market was immense and the situation for developers was dire.
In contrast, the Cyprus Property Action Group (CPAG), which represents buyers who are unable to obtain deeds, supports Lord Jones’s suggestions. “We’ve been saying the government won’t do anything for ages because this can’t be fixed by legislation – it needs money,” said Denis O’Hare of CPAG. “The longer the government fails to act, the worse the damage will be.”
Neither Minister Sylikiotis nor Lord Jones were available for comment.
© Overseas Property Professional
Editor’s comment
As those who have been caught in the ‘Title Deed trap’ will appreciate, the ROPUK Chief Executive is incorrect when he says property buyers could protect themselves as long as they are willing to pay the “real estate transfer tax”.
