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Developers meet with Central Bank Governor

The Cyprus Land and Building Developers Association has met with the Central Bank to discuss financing problems and the Title Deed legislation currently before a Parliamentary Committee.

YESTERDAY a delegation from the Board of the Cyprus Land and Building Developers Association (LBDA) and the Director General of the Cyprus Employers & Industrialists’ Federation (OEB) met with the Governor of the Central Bank of Cyprus, Athanasios Orphanides.

They discussed various issues that fall within the remit of the Central Bank. The main issue concerned extending the boundaries, restructuring the loans and interest of land and property developers. LBDA President, Lakis Tofarides, said that the issue resulted from a severe reduction of liquidity within the industry due to the economic crisis and the fall in property sales; a situation that is likely to continue into next year.

Mr. Orphanides stressed that the Central Bank has no problem with restructuring loans providing that the businesses concerned remained solvent.

Among the recommendations made to bring an end to the crisis was to reduce purchasing costs by abolishing/reducing transfer fees and VAT; measures that have been taken in other European countries to help stimulate their property markets.

They also discussed concerns relating to the package of bills before the Parliamentary Committee to reform the laws relating to the thorny issue of Title Deeds. The Governor shared the view that the three types of Title Deeds would cause many problems in the market and would also deprive owners of their right to sell or mortgage those properties given an ‘incomplete title’ as a result of serious planning violations.

Readers' comments

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  • Andyp says:

    Exactly Peter.

    @Steve Planning amnesty makes no inroads whatsoever into title deeds being issued as it it highly likely that the Developer has not repaid his bank loan and as such Title deeds will NOT be issued.

    Any discussion about planning amnesty to the exclusion of Developer mortgages is simply more Cypriot smoke. A complete waste of time

  • Peter says:

    @Andyp..

    “..Do something radical such as make a payment on their debt?”

    The banks are holding over €7b in toxic debt that will bring some of them down. Already the bank have had the Cyprus economy downgraded.

    There is no bad-debt provision and no accounting procedure that allows for constant restructuring of loans, and yet in the article. “Mr. Orphanides stressed that the Central Bank has no problem with restructuring loans providing that the businesses concerned remained solvent”.

    Well of course they are solvent, that’s because they are not having to repay the money they have borrowed. If they were solvent they could clear their debts, which are incurring 9% compound interest. But they can’t.

    Please someone explain it to Mr Orphanides.

  • Steve says:

    We must not ignore or gloss over this issue of “incomplete title deeds” that will not allow the deed holder to sell the property until the problems have been remedied. This is a blatant attempt to put the responsibility for the developers’ transgressions onto the shoulders of the buyer. All the planning violations and the building without the necessary permits have to be fixed at the expense of the owner while the developer walks away scot free.

    There has already been a recent flood of applications for final approval for delinquent developments, where the developer anticipates getting away with blue murder at the expense of the buyer once the new legislation is enacted.

  • U Boat says:

    Happy Christmas to one and all. Not the corrupt property developers.

    Looks like yet again the Central Bank is willing to bail out the corrupt and dishonest? Restructure this and change that all in the name of the economic down turn. Most of them would not be in the state they are in if it where NOT for their greed.

    Would the Central Bank be willing to help me and thousands of property owners alike in Cyprus out just as readily? NO!
    They just shrug their shoulders and pretend not to understand? saying what is wrong?

    I and thousands of others kept their part of the contract but the developers just moved the goal posts as and when it suited them so they would be unable to complete and pass the title deeds to the rightful owners! Always using excuses and passing the responsibility to someone else?

    It’s about time everyone stood up and be counted? 2011 it’s time for change?

  • Andyp says:

    We all know that The Central Bank are happy to continue to restructure these developer loans, which is a big part of the problem, but why do they not ask developers to do something radical such as make a payment on their debt?

    The real problem as they all know far to well is that the developers have been over funded for so long, spent the profits on themselves and now have no money to pay off the debt hence no one can get a title.

    Seems like just another meeting probably to agree how they can all cover themselves rather than sort the problem.

    Merry Christmas

  • Peter says:

    “The main issues discussed concerned extending the boundaries, restructuring the loans and interest of land and property developers”.

    Or put another way “How can we paper over the cracks so the EU doesn’t catch us out”?

    Nice to see the developers and banks are discussing their problems and what effects them.

    Nothing about the hapless buyer who has been defrauded then? It appears the buyer is regarded as no more than a disposable item.

    I just hope “they” get squeezed until the pips squeak. They have killed the goose and many deserve to go under, but the Government is complicit in this fraud.

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