Oh, what a tangled web we weave

MILLIONS of US mortgages have been sold and resold by firms without the documents that traditionally prove who legally owns the loans. Many of these loans have fallen into default and banks have sought to seize homes, but judges around the country have increasingly ruled that lenders had no right to foreclose since they lacked clear title.

The court decisions, should they continue to spread, could call into doubt the ownership of mortgages throughout the US. This raises urgent challenges for both the real estate market and the wider financial system. Could something similar happen in Cyprus? Construction here continues unabated, although sales are flat and many new developments sit idle and unsold. Perhaps we’re anticipating a sudden influx of foreign buyers, Russians, Qatari, Kuwaiti and Iranian?

The Brits certainly aren’t buying anymore given our proven reputation for fraudulent contracts, shoddy workmanship, lack of mains services or building inspector approval, and in particular, our government’s lamentable failure to resolve the Title Deeds scandal.

How long can our banks hold out; another one billion Euros in foreign-listed Eurobonds this October, and when that’s gone, what next? Will Fitch, Standard & Poor and whatever other rating agency you care to name, downgrade our rating and lead us into the unrighteous path of Greece – cuts galore?

When I came to live here in 2003 I was told by a highly placed cousin at the Ministry of Finance that house sales and exchange of contracts could be accomplished on the same day, rather like death and burial, assisting me in the purchase of a countryside house and Nicosia apartment.

Both properties possessed so called bona fide Title Deeds (not that I for a second suspected they wouldn’t), and apart from the chaos endured at the Land Registry on both occasions, everything went according to my cousin’s claim, unbelievably simple – although I did regard the Land Registry’s modus operandi as somewhat bizarre!

Buying anything in Cyprus is easy – selling what we’ve bought is where most of us come unstuck.

In 2005, I decided to sell the countryside property and buy something near the sea. Unfortunately, the Title Deeds fiasco had just erupted and I was told by an informed potential buyer that the land-survey plan on my Title Deed had no house on it – 20 years old and it also lacked a building inspector’s approval. Never mind, you own the land, my cousin insisted, meaning anything on it.

I employed an architect to draw up and submit plans for building inspector approval – land-only Title Deeds are meaningless without. This took over a year and cost me a grand.

When in possession of all necessary paperwork, I eventually sold to a young Cypriot couple with five dogs and no children, yet insistent on building inspector approval and Title Deed. Without these, any asking price is negotiable – considerably downwards.

What most foreign purchasers do not realise is that Cypriots rarely sell their homes. There is no such thing as an active domestic housing market, and this is why over 130,000 properties in the Republic lack Title Deeds, never mind building inspector approval. If you’ve no intention of ever selling why incur the cost of acquiring approval and paying registration taxes, totalling in most cases over €10,000?

Given an average of four occupants to each house, over half of this island’s homes lack a bona fide Title Deed. What percentage of ROC properties even conform to building regulations? Yet nobody cares when snug as a bug in their homes, refusing to budge when their jobs are, at most, an hour’s drive away? No wonder the roads are always choc-a-bloc!

A group of expats, who bought homes from Kulaksiz Developments in the north, lost them to a bank after the developer disappeared owing a fortune; that group, plus the disaffected O’Dwyers, Lockharts and Jones of the ROC, are only the tip of an iceberg that will eventually sink our titanic construction industry, which is a major contributor to our Treasury in taxes levied on purchases.

The flip side of the coin is that many expats residing here fail to register with our Inland Revenue or apply for an ID card and voting rights while benefitting from free health care, cheap imported UK cars and the comparative low cost of local council rates and services, etc.

Who is to blame for this state of affairs other than the administration and Land Registry, whose modus operandi suggests that our banks, the construction industry, their lawyers and estate agents, along with the ‘elite’, run the circus?

Our administration is no more than a symbolic gesture of legality which, for a prescribed fee, rubber stamps any scrap of paper placed before it. By doing so, it has woven an inextricable web of deceit into property transactions.

Innumerable complaints against lawyers and developers are awaiting resolution at the Disciplinary Board of Advocates, says Mrs Koulia Vakis, CEO at the Cyprus Bar Association. And just what percentage of them will ever be resolved? Mrs Vakis was vacuous in her response.

Pretending our economy can be saved by a British Cypriot Nobel prize-winner is less than risible. His one third share of the prize money was half a million dollars, and you can bet his bottom dollar he won’t bring it here when he comes next January to lecture us on our wayward ways, knowing full well that when cashing in his assets the circus manager might well spot irregularities and leave those assets in a state of limbo, just like the so-called Cyprob and those many complaints against, lawyers and developers! This is a country where you can accomplish most things, if improperly.