THE government has submitted four draft bills to help solve the Title Deed issue problem. In addition, there is a private member’s bill submitted to the House by lonas Nicolaou MP. In brief, this is what they say:
- A building amnesty is proposed for those buildings/individual units that have not been built according to their building permit. It refers to those cases where the approved building density has been exceeded by up to 30 per cent, increased in height, increase in floor numbers, not keeping the maximum distances etc. Amnesty will be given to those cases that the Special Committee (to be appointed) will approve, with the main criteria being that the “illegality” does not affect the interest of nearby properties. This is not a straightforward procedure, but in all cases (save changes of use etc) there is a certain route laid out how one can secure a Title and transfer on one’s name.
- Depending on the extent of the building violation, there will be three types of Titles:
- ‘Final Title’ (with no violations);
- ‘Incomplete Title’ (on which the violations are minor and will be so recorded on the Title);
- ‘Incomplete Title’ (which will include serious violations and they will also be recorded on the Deed).
This third type of Title will not be allowed to be sold/transferred, mortgaged etc, until and unless such violations are removed. In this way, practically all will get a Title of one type or another. The local authority would have the right to ask for a Title to be downgraded or upgraded, if any illegalities appear (or are removed) after the Title issue.
Titles with non serious violations will have to pay compensation for the violation as set by the Lands Office and approved by the Committee.
Building density that exceeds limits by 10 per cent, the erection of an added floor, the intrusion of one’s building to a neighbour’s plot etc are considered serious violations and as such these Titles will attract the ‘incomplete Title’ (in addition the rights of third parties, local authorities etc to take action).
- Some red tape is passed to private enterprise and some procedures are shortened.
- The Specific Performance law is proposed to be changed, increasing the deposit time from two to four months, special provisions are introduced so that contracts can be deposited later and more protection is given to the buyer in case of mortgages etc.
- The Certificate of Final Approval is now unrelated to the occupation of a building (subject to certain conditions) and this must relieve many buyers.
- The Supervising Engineer must inform the local authority if the project is being developed not in accord with the permit (during construction).
- A Division Permit will be issued at the same time as the building permit, saving thus around six to eight months for the Title time issue.
- The Certificate of Approval can be sought by any interested party, including buyers, mortgagors etc, if the developer does not submit such an application.
These proposals are now the subject of discussion by interested groups and parties, and it is expected that once the deliberations finish, a final proposal will be submitted to the House by the end of the year. Although these measures will help ease the situation, they do not go far enough. Of course, the greater the change, the more difficult is to get the proposals approved.
As time passes, we feel more and more that the British or Greek system on Titles is better. In these countries, the securing of the permit is one thing and the Title issue is another (as opposed to our system which implies that 100 per cent of the building permit conditions must be adhered to before the Title issue).
Antonis Loizou & Associates Ltd
The proposals will be welcomed by those who are currently unable to obtain Title Deeds to properties they have purchased due to planning irregularities, which may have been caused by ‘indiscretions’ by the property developer during its construction or by illegal changes made subsequently by its ‘owners’. Speeding up the prerequisite processes involved in issuing Title Deeds will also be welcomed.
However, the proposals will be of little comfort to those who have been duped into buying mortgaged property and who face the very real threat of losing their homes if their developer goes bust (see the article Title Deed legislation too late for Paphos home ‘owners’).
The mortgaged property problem is an extremely serious issue that the Government needs to address without further delay.
Ownership & illegal construction
Regard to the comments made by Mr Loizou concerning the British or Greek system on Titles, there needs to be a clear distinction between the systems of ownership (i.e. Title Deed legislation) and building/planning/construction irregularities (i.e. Planning legislation).
For example, a Vehicle Registration document bears the name of the vehicle’s legal registered owner. That owner may sell or dispose of that vehicle in what ever way he wishes regardless of whether that vehicle is roadworthy or has an MOT certificate.
The two systems – that of vehicle ownership and its roadworthiness are completely separate; you can sell a vehicle without an MOT certificate.
The same principle needs to be applied to property.
Incomplete Titles – serious violations
The proposal is that properties with this type of Title cannot be sold/transferred, mortgaged etc, until those violations are removed.
I envisage situations (e.g. where a property developer has built an illegal three floor apartment block rather than a legal two floor block) where the demolition or partial demolition of the structure may be necessary. In this eventuality who will compensate the buyers of the third floor apartments, who may have bought the property in good faith, for their loss?
Similarly, if serious violations have reduced the market value of properties built in the vicinity of the illegal construction, will the owners of those properties be compensated by the offenders?
Certificate of Final Approval
I have to disagree with Mr Louizou’s assumption that buyers will be relieved that the Certificate of Final Approval will be unrelated to the occupation of a building.
Unlike other EU countries, where properties are independently inspected while under construction, Cyprus employs a self-regulatory system. Therefore the independent inspection of completed properties, and subsequent issue of a Certificate of Final Approval, is a vital safeguard to ensure that properties are built in accordance with the planning and building permits issued for their construction, and that they are safe and suitable for human habitation.
The Government’s proposals will undoubtedly help a number of people obtain Title Deeds to properties they have bought. But regrettably, they fail to address the most serious issue; those who have been duped into buying property built on mortgaged land and who face losing their homes if their developer goes bust.
The proposals are now under discussion and it is anticipated that the final proposals will be submitted to Parliament by end of the year.
Although they will help ease the situation, they fall short of giving consumers adequate legal protection from the crooks and conmen that plague the Cyprus property industry. Hopefully the government will take note of the concerns expressed and amend their proposals accordingly.
Full details of the Cyprus government proposals may be found on the website of the Interior Ministry – English-language translations have yet to be published.