Latest Headlines

Sylikiotis shoots from the hip

If some of the smaller developers are now close to bankruptcy, then allowing them to go bankrupt would send a clear message to the rest of the market.

Neoclis Sylikiotis - The Cyprus Interior Minister

Neoclis Sylikiotis - The Cyprus Interior Minister

CYPRUS’ Interior  Minister Neoclis Sylikiotis spoke bluntly yesterday about what has been done and what needs to be done to sort out the title deeds situation.

We do not have a magic wand which we can wave in order to solve the problem just like that, especially when we are dealing with problems of omission and oversight that have been piling up over decades“, he said.

Addressing an audience of property sector professionals last night, which also included MPs and mayors, Sylikiotis said: “I think that until today, no-one has ever genuinely got to grips with the situation. We all criticise and say how terrible the situation is, but I wonder why nobody has done anything about it.

Sylikiotis referred to the particular problem posed by the cumulative actions of land developers, which have resulted in a lot of attention being generated from the European Parliament, foreign ambassadors and the foreign press. He said that he recently gave an interview to The Times on the issue.

The seriousness of the current situation is creating dangers for the property market in the future

The seriousness of the current situation is creating dangers for the property market in the future. I am obliged to ask very many of those involved in land development to co-operate above all honestly and swiftly with the state services, so that the tens of thousands of title deeds that have remained unissued for unjustifiably long periods can be issued as soon as possible.

It is no exaggeration to say that over 100,000 title deeds are not yet even in the system – they have not even been applied for. We have to start the certification approval process before the deeds can be issued. I can tell you that the Land Registry has been listing all the release certificates so that it can approach the owners of the big development projects, to see how to get those properties into the system and to start issuing the title deeds.

…taking out a second or even third mortgage in order to recycle capital into other projects…

We all recognise that in many cases there are various excuses and – I would say – pretexts put forward. We have to see things as they are, not try to bypass them. I think we are all familiar with some of the reasons behind the excuses, like taking out a second or even third mortgage in order to recycle capital into other projects, or postponing things to suit.

He said that although a lot of people point the finger at the Land Registry, “and I am the first to acknowledge its problems” it has taken significant steps recently such as taking on extra staff.

There are still a lot of things that need to be done to improve various services, but let’s not lose sight of how we are helping things improve,” he said.

Sylikiotis referred to the fact that in recent months he had set up special team made up of senior officials from each of the relevant departments of his ministry, who in turn are overseeing teams of officials in each of the island’s district which are monitoring progress on the title deeds question. He said that he already has lists of properties for which only the final certificate of approval is missing, and a file detailing the status of the 19,500 cases already in the system.

I can assure you that we will work hard to ensure that by the end of the year, 10,000 of those cases will have deeds issued, with the aim of reaching 20,000 by the end of June 2010.

Antonis Loizou, Managing Director of estate agents and chartered surveyors Antonis Loizou & Associates, said: “Although I greatly admire the Minister, and believe that he does mean business, I confess that I am not 100% convinced that the legislation that has been prepared will offer a practical way of solving the problem.” He said that the 11 certificates now required as part of the bureaucratic process need to be streamlined, and their issuance simplified.

Loizou said he disagreed with the view that most problems with the non-issuing of title deeds had to do with developers’ financial situation. “The main problem is the requirement for 11 certificates before you can reach the safe haven of the Land Registry“, he said, adding: “Just getting the municipal inspector on site can take a year, and if something needs correcting, he’ll take another year before he OK’s that. Then when you finally get to the Land Registry, you’re told there is a five-year backlog.

Allowing developers to go bankrupt would send a clear message to the rest of the market.

Asked by the Cyprus Mail whether the government might consider some kind of guarantee in situations where heavily-indebted developers are holding up the deeds issue, Sylikiotis said that he was the last person to wish to see developers go to the wall, but if some of the smaller developers are now close to bankruptcy, then allowing them to go bankrupt would send a clear message to the rest of the market.

His own question, which he put to the British High Commissioner during their recent meeting, is: why have the various property-owners not taken to court those developers who they think are acting illegally by not arranging for their title deeds to be issued?

Copyright © Cyprus Mail 2009

Editor’s comment

Time to wake up and smell the coffee Mr Sylikiotis!

Mr Sylikiotis is correct when he says that allowing developers to go bankrupt would send a clear message to the rest of the market.

It certainly would! If anyone were to lose their homes as the result of these bankruptcies, no-one would be foolish enough to risk buying property in Cyprus ever again. What the government must do is protect buyers who have been duped into buying mortgaged property by stepping in and preventing the banks from reclaiming the properties that have been affected. And if that means the government has to underwrite the banks’ losses, so be it.

Mr Sylikiotis asks why haven’t property buyers taken developers to court?

Why should they? According to Article 23 of the Constitution of the Republic of Cyprus, “Every person, alone or jointly with others, has the right to acquire, own, possess, enjoy or dispose of any movable or immovable property and has the right to respect for such right.

If property buyers should be taking anyone to court it’s the Cyprus Government; it is they who have consistently failed to uphold the island’s constitution, not the property developers!

And if buyers were to attempt to seek redress through the Cypriot courts they would stand little chance of success.

According to a recent report in StockWatch, the Cyprus courts are in chaos. Restricted resources, antiquated infrastructure and failure to undertake responsibility have allowed the number of pending court cases to exceed 80,000. Can you imagine how long it would take the Courts to process another 100,000+ cases? Most claimants would be long dead and buried before their cases would be heard.

What hope is there for anyone using a justice system that is not fit for purpose?

Perhaps a more sensible question Mr Sylikiotis should be asking is why the Cyprus Government is refusing to take action against developers who are extorting money from buyers under the guise of ‘Immovable Property Tax’. Obtaining money under false pretences is a criminal offence and the government must direct the Police to investigate and prosecute offenders.

But to close on a positive note at least Mr Sylikiotis isn’t practicing the usual trick of pointing the finger of blame at everyone else for the problems, but he does seem rather naïve in his understanding of the issues and how to resolve them.

Maybe the Minister needs to wake up and smell the coffee!

Readers' comments

Comments on this article are no longer being accepted.

  • Text size

Back to top