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Title Deed fight heads to European court

The Cyprus Property Action Group (CPAG) believes that the holding back of Title Deeds contravenes the European Union Directive on unfair commercial practices.

European Court in Brussels

FED-UP property buyers have decided to change tack and pursue their Title Deeds through Brussels, arguing that holding back of the deeds violates the EU directive on unfair commercial practices.

The Sunday Mail has seen  copies of letters which are being sent to the EU Commission and also to British Prime Minister David Cameron from UK MEPs, which they and the Cyprus Property Action Group (CPAG) hope could prompt some action.

It is expected that most or all of the 72-MEPs will sign the letters which are part of a coordinated plan, said CPAG’s Denis O’Hare, who believes the move could be a “title-deeds game-changer”.

EU Directive 2005/29/EC – Unfair Commercial Practices ‘ was transposed into Cypriot law via 103 (I) /2007, effective December 2007 with the Commerce Ministry as the enforcement agency, yet was never properly promoted publicly as required under the Directive,” said O’Hare. “Lawyers we have talked to had not even heard about it.”

O’Hare said that currently the English-language version of the Commerce Ministry’s website contains no reference to the Directive “nor does the consumer protection legislation section of the Cyprus Consumers’ Association website“.

According to O’Hare, the role of the Competition and Consumer Protection Service (CCPS) has also been kept under wraps.  He said EU documents show that: ‘Where the Competition and Consumer Protection Service of the Ministry of Commerce, Industry and Tourism, upon an investigation, considers that there is a violation, it may – if it deems necessary – apply to the District Court for the issue of a prohibitory or mandatory order, including the interim order, against any person who, according to the Court’s opinion is liable for this violation.’

O’Hare said this suggests that the CCPS would take any court action on behalf of complainants. “To the tens of thousands without Title Deeds and whose homes are at risk due to developer mortgages, the withholding of their deeds would seem the most unfair commercial practice of all,” he said.

It is believed that well over 100,000 home buyers are without Title Deeds, one third of them foreigners, “Moreover, this grossly unfair practice also gives rise to other unfair practices by developers, such as cancellation’ charges, Immovable Property Tax and other scams,” O’Hare added.

An official at the CCPS told the Sunday Mail that she was aware of the Directive and said campaigns had been launched in the past to inform the public. Petros Markou, the head of the Cyprus Consumers Association said he had never heard of the Directive but would look into it.

The MEP letter to the Commission, coordinated by MEP Daniel Hannan, requests confirmation that the developer practice of not transferring deeds infringes this Directive, regardless of when the property was purchased, referring to the clause ‘unfair practices occurring before, during and after a commercial transaction’.

The letter concludes: ‘Finally, we strongly urge the Commission to recommend that the withholding of Title Deeds or legal ownership of immovable property after purchase be added to Annex 1 of Directive 2005/29/EC, which lists 31 Commercial practices which are in all circumstances considered unfair’.

The letter to David Cameron calls for the investigation of the selling practices of Cypriot developers and their agents and the taking of appropriate measures, under UK law.

It is understood that a new CPAG website will be going live in the near future which will, among other things, give instructions on how to complain to the CCPS. O’Hare said: “Given the nature and size of the problem it is difficult to see how the CCPS will cope, however this itself will give grounds for complaint to the EU about the failure of Cyprus to enforce the Directive – our MEP powerbase will then push for EU action to be taken.

“Finally, should buyers not obtain satisfaction through the CCPS it could be that having exhausted this designated local legal remedy, they will also be at liberty, in their droves, to use the European Court of Human Rights, which is also free,” O’Hare added.

Readers' comments

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  • Unbelievable says:

    ooooh CPAG, Odd_Job_Bob does have a point and I think he’s right.

    Do you think no one can or will sort this mess out?

  • Odd_Job_Bob says:

    I agree with both Gavin and Unbelievable. The original intention wasn’t necessarily to defraud us dumb expats, there was a system in place with so many holes in it that any self-respecting businessman with a slightly different moral compass to the average Brit would feel more or less obliged to exploit it. This has been happening in Cyprus for years, mostly to their own people.

    However, it was the (mainly) British-led boom in the property industry that made the average goat-herd think about the serious money to be made by exploiting the system to the full. Who are the biggest land-owners in the country? The Church and Deputies in parliament, the only people really in a position to change the status quo. If they then do all they can to protect their positions, is that then not a conspiracy, irrespective as to their original intentions?
    Each anomaly spawns so many other anomalies in order to protect it (no title deeds means you don’t own it so you can’t sell it leads to cancellation agreements leads to having to pay the developer in order to sell your property leads to more money for the lawyers and developer. Again, no checking of signatures on powers of attorney documents leads to your property being able to be sold or transferred to the name of your lawyer leads to you having to go to court to prove you never signed away your property leads to the CBA NEVER prosecuting one of their own if they can help it leads to more money for the lawyers etc etc etc).

    A friend of a friend came up with a really good proposal to sort out this title deeds mess in an exceptionally clever way, in which no-one actually lost (seriously!) The property developers approached said, “It seems really good, but why do I need to save myself from going bankrupt as I will be protected (by the government)”.

    To the Cyprus government, the only problem is that we are not continuing to buy and thus financially prop up their ailing state. None of our worries and concerns about the injustices of the property industry ARE OF THE SLIGHTEST CONCERN TO THEM. Even less so to the EU (who are completely powerless anyway)…

  • Gavin Jones says:

    Unbelievable (1.22 p.m. yesterday).

    Agree with all you’ve written.

    I would, however, like to refer specifically to and expand accordingly your first sentence addressed to Odd Job Bob.

    The argument often used by many in Cyprus is that wrongdoing, corruption and all manner of evil intent also happens elsewhere in the world. This lame statement is habitually trotted out almost by way of justification and excuse for what happens here. This simply will not do.

    Most people are reasonable and law abiding and only a few “start out to intentionally rip off”. HOWEVER, unless laws are enforced, the temptation by others to join the bandwagon of ‘ripoffism’ will not only continue but will accelerate. (I’ve laid out in my comment at 10.45 yesterday exactly where I believe the responsibility lies so I won’t duplicate it here).

    Yes. There’s corruption everywhere. One only has to look at British MPs feeding at the trough of bogus expense claims. BUT it was exposed, the wrongdoers were forced to return monies, some were forced to stand down and others received jail sentences. Can we see that happening here? NO.

    THIS is the tragedy of Cyprus. There appears to be no inherent yardstick of right, wrong and boundary measurement. The worst culprits are the Deputies in Parliament, the majority of whom are lawyers, the pivotal protagonists in the Title Deed scandal. Need I say more?

    What is required, dare I say it, is something akin to the events that we’re witnessing in the Mediterranean basin where the clamours for reform include the sweeping away of institutionalized corruption. Unless this happens, nothing will change in Cyprus and the ruling classes will continue to dupe and milk the hard working majority.

    I rest my case.

  • Unbelievable says:

    @Odd_Job_Bob – I don’t believe the Cypriot System started out to intentionally rip off non Cypriots. I believe the system and people working in it, have always been below par. Over the years, canny business people have taken Big advantages over this and it’s just snow balled out of total control.

    The ‘Force’ (external money coming into Cyprus), was a Good thing, but the ‘Dark Side’ (the Cypriot System) was too great a temptation for most to resist!

    But, eventually, Good will conquer Evil

    It has to Hurt before it Heals :-)

    @Costas – Yes, there will be more laws passed to extort money from us in order to compensate for the Banks & Developer losses. Someone has to pay and it’s always the common man!

  • Costas Apacket says:

    Let’s see where this goes before we all jump to conclusions, positive or negative.

    I for one will be using the ‘write to them’ service to ensure the MEP’s in my area are aware that they are, or will be asked to support this initiative, and pointing them in the direction of DH for further details of how they can help.

    I think we should also be focussing on the rip offs lined up after the Title Deeds are made available to us such as the District Lands offices coming up with inflated property values to calculate extortionate transfer taxes, IPT scams and the like.

    Being slightly sceptical after all this time, I also think that after all the above is put to bed there maybe other rip offs relating to our property purchases waiting in the wings that we don’t even know about yet.

    Such is my lack of confidence in the Cypriot artful ways!

  • Gavin Jones says:

    Denis O’Hare.

    Yet again, I salute you.

    Many of us have/are taking on the corrupt Cypriot modus operandi, be it with the judiciary, financial institutions, construction ‘industry’ and other related bodies. Foremost in this pantheon of evil – and ‘evil’ is the apt description – is, of course, the government itself, for without their connivance in all these wrongdoings, tens of thousands of us wouldn’t be in this situation. Our struggles are all consuming and would that our collective efforts could be directed to more gainful and creative pursuits.

    Make no mistake, this is indeed an institutionalized conspiracy of huge proportions and it WILL ultimately be brought to book with far reaching consequences. Your efforts are hastening this process and the rest of us, who are waging battles on other fronts, mustn’t weaken either.

    We WILL prevail.

  • Odd_Job_Bob says:

    I fully salute CPAG’s attempts to sort this ridiculous conspiracy out but, without trying to sound like a complete doomsayer, I believe this tactic is a long shot and doomed to failure.

    If Unbelievable’s comments are to be believed (no pun intended), then we are up against an Evil Empire, a consorted conspiracy who have planned this whole thing and will do all they can to protect ther vested interests (as stated by many on this forum).

    This actually reminded me of the Battle for Endor (Ewoks v the Empire, (http://www.youtube.com/watch?v=ljsmrZlA2BA).

    The cute, fuzzy, under-estimated, basically army of teddy bears defeated a large co-ordinated, technologically advanced conspiracy by using guerilla tactics (many examples of which can be found through history). The enemy were prepared for a full frontal assault using conventional tactics (EU laws/ directives), NOT for an insurgency that hit them where it hurts.

    The Cyprus government don’t give a fig about the EU and are designed to resist any influence from them. The case will be tied up in the courts for years and peter out at or before the eventual expiration date of the EU.

    The only place where it hurts the Cyprus government is in the pocket.

    They are currently going for the big money (huge land developments from Qatar, Israel gas developments, Russian financed marinas, golf courses etc) and our little cases are no longer, in fact never were, important. We should be getting to these large scale investors DIRECTLY. We should be refusing to pay IPT (which we don’t owe anyway), not paying mortgages (if we don’t have other traceable EU property or it’ll be nabbed!) and overload them when they are desperate to balance their crooked books.

    By throwing our rocks and firing our arrows at the chinks in their Stormtrooper armour, is the ONLY chance of scoring another Endor.

    OK, enough Star Wars analogies for now….

  • @andyp – It states in Article 3, section 1 of the Unfair Commercial Practices Directive that:

    “This Directive shall apply to unfair business-to-consumer commercial practices, as laid down in Article 5, before, during and after a commercial transaction in relation to a product.”

  • andyp says:

    @CPAG. As it is you. OK. Glad to hear there will be a record kept as I am certainly not a fan of online forms particularly in Cyprus Ministry offices.

    @dimitri. I am sure I read somewhere that it would apply retrospectively but perhaps Nigel or CPAG could advise.

  • Robert Briggs says:

    (re: Mr Denis O’Hare, Chairman of CPAG).Good on you pal! You are a MAN!

  • dimitri says:

    Anyone know if this directive applies to sales pre-2005? or only to transactions after 2007?

    EU Directive 2005/29/EC – Unfair Commercial Practices ‘ was transposed into Cypriot law via 103 (I) /2007, effective December 2007 with the Commerce Ministry as the enforcement agency,

  • Greg says:

    The pressure builds up. 100.000 byers without title deeds is a huge number and Cypriot authorities should do something about this. Given the fact that real estate sector is facing problems in Cyprus because of the economic crisis, it is very important to safeguard properties’ title deeds especially from developers who are not so well credited in the market. The risk is by far higher for companies without proven reputation and without the vital critical mass of clients. Let’s hope that this action with the EU and MEPs will have positive results.

  • Unbelievable says:

    @Nigel, thanks for the reply.

    Whatever way the Cypriot law is interpreted or written, it clearly has been designed to hamper the buyer 100%, to the extent they could possible lose their property, deposit or any other monies they have laid out against the home purchase.

    @CPAG – I bet the Cyprus Bar Association is spitting features over your resurrection..lol

    Well Cyprus, ALL Empires are broken up at some point. Nothing lasts forever.

    As for the Cyprus Banks stupidly handing out money left right & centre. That’s going to be another story..

  • out of the frying pan into the fire says:

    Unfortunately this only solves part of the problem.

    Corrupt lawyers! They will find a new way to rob us.

    The EU really needs to look at the whole property market not just title deeds. Having said that well done SIR. You deserve all our support so lets get onto our Euro MP.s.

  • CPAG says:

    @ Andyp

    Be patient young man ! – as the article above states, the CPAG website will give guidance on how to do this with the appropriate suggested wording which can be modified in the light of experience. We already have some experience of test complaints.

    Part of this CCPS complaint process will include a CPAG register where complainants can, should they wish to help, log the details of their complaint to the CCPS and also the CCPS response. In this way the gathered data can then be used as hard evidence in order to escalate the matter to the EU, in the likely event that this will be required.

  • andyp says:

    @John Swift John out of interest did you “try before you buy” because of the warnings you started to come across on the internet in 2008?

  • @Unbelievable – re your comment April 18, 2011 at 4:11 pm

    This is how the system works – from the Department of Lands & Surveys:

    “The deposit of the contract of sale creates an encumbrance, which expires within six months from the date of the contract of sale or six months from the last date of transfer specified therein. Where only part of the property is sold (a building site or field under division or flat, office or shop under construction) the encumbrance is attached to the whole of the immovable property until the issue of a separate title for the part so sold. This means that the encumbrance created shall thereafter be limited to the part of the property so sold. Until the issue of a separate title, the vendor may transfer his property subject to the contract of sale, which is deemed to be a mortgage on the property so transferred, in the name of the new owner (purchaser). The contract of sale is binding upon the purchaser. The vendor may also choose to mortgage the property. In this case, the contract of sale is deemed to be a prior mortgage (subsisting before the new mortgage).”

  • andyp says:

    Best of luck Denis. Glad to hear the site will be back up shortly.

    As has been said by others lets not leave it for someone else to do all the work. Get involved and lets do our bit too.

    We may not get another chance to get OUR homes back.

  • John Swift says:

    When we tried Cyprus in 2008 we had the good sense to ‘try before buy’ and we’re glad we did, for too long a certain forum pounced on anyone trying to raise the title deed issue even to point of the forum owner telling members that there was no problem or possible future problem regarding the ‘title deed issue’.

    We went to Buy Sell with a list of 20 properties taken from their internet site, only 4 had title deeds issued.

    The various excuses that we were given as to why deeds were held back were incredible always followed by the remark “But is no problem”.

    Well it was for me so it was back to the UK for a rethink which at this moment in time will be rent if we do return although the weak pound is a stumbling block at the right now.

  • Unbelievable says:

    @Nigel, You say, “New loans granted to developers after a contract of sale for a property has been deposited do not prevent the Land Registry issuing a Title Deed for that property – or its subsequent transfer to the person who purchased it”.

    Please explain how this legally works?

    I mean, Developer goes to bank for a mortgage loan. Bank says what do you have for collateral? Developer says I have this Title Deed to my land. Bank says give us the Title Deed and you can have your loan. Deal is done..

    Meanwhile..new property owner goes to Land Registry for his Title Deed. Land Registry says your house sits on plot number xyz. Do you have the Title Deed for plot xyz so we can sub-divide plots? New home owner gives the land Registry clerk a vacant look..

    One – Legal Title Deed to Land (owned by Developer)
    One – Legal Owner to Land & anything that sits on it
    One – Legal Title Deed (held by Bank as loan collateral)

  • @Clive Fletcher – New loans granted to developers after a contract of sale for a property has been deposited do not prevent the Land Registry issuing a Title Deed for that property – or its subsequent transfer to the person who purchased it.

    This is because the contract of sale pre-dates the mortgage and will therefore take precedence over it.

    Where it becomes a problem is where the buyer wants to sell the property before its Title Deed is issued. In this case the ‘new’ buyers contract will be deposited at the Land Registry after the developer’s mortgage and, in this situation, the developer’s mortgage will take precedence over the ‘new’ contract of sale.

  • Steveo says:

    Blocking the CPAG website was a mistake it seems, when things are quiet people are busy! Like others here we are willing to take the inevitable hardship to prove a point of principal and stop the rot, this is the only choice if Cyprus is to rebuild it’s image otherwise it’s all downhill from here.

    Too many times people are encouraged not to pursue their problems because of time, money and impossible odds. Hopefully this will prove that sticking to your guns is worth it eventually.

    Greece is about to implode imminently will Cyprus follow suit?

    CPAG ftw

  • Gandolph says:

    It is so sad to have to resort to dragging the Cypriot authorities through the EU courts but, as we all know, all other avenues have failed or resulted in lies and inaction by those same authorities. How nice would it be if the problem was dealt with in house instead of ‘outsiders’ being seen as the bad guys? Or is that what the authorities want?
    Either way, let’s get properly organised and go for it.

  • Costas Apacket says:

    Let’s just see what new, concocted and intimidatory threats start to appear against Denis & CPAG from those parties with vested interests in burying this initiative. (Which is pretty much most Cypriot Developers, Banks, Lawyers and Governmental members)

    No doubt the BS will start to fly about how the Cypriots have already cleaned up their act with the newly rushed through, ill thought out, legislation on property transactions, which we all know is a whitewash.

    Let’s have the EU acting on this plus the Homes from Hell TV programme screening, plus lots of protests at overseas property exhibitions and them maybe we’ll see a little light starting to appear.

  • Unbelievable says:

    Well Done Denis – Is this DD Day….sorry for the pun.

    OK, now down to business. The net is slowly closing around the scummy business practices, but what might happen next?

    I keep harping on about it and will say so again!

    In order to issue several ‘new’ Titles, the main Title has to be destroyed.

    For some unfortunate property owners, this will force their Developers to go bust because the Banks may refuse to let go of the Title Deeds they keep for collateral against the Developer debts.

    Meanwhile….Cypriot businesses are channelling their profits into other ‘areas’ away from the banks and liquidators. This is being done in preparation if they are to be sued!

    Where does that leave us now?

  • Clive Fletcher says:

    Whilst this is a very positive action to take it will, regrettably, take years to get in front of a European court Judge and obtain a Ruling; the Cyprus Government will see to that and even then the Cypriot Government will prevaricate and prevaricate.

    Another front or angle running in parallel is required that will hopefully bring a far swifter resolution to this matter, that of the illegality of the banks.

    If it can be proved that it is illegal under either Cypriot, European or International Banking regulations to grant loans to developers on purchasers land after their signed Contract of Sale had been legally lodged with the Land registry and purchasers have evidence of this, evidence that would stand up in a court of law, why couldn’t they collectively publish a very carefully worded Public Notice in selective Greek and English Language newspapers worldwide and the radio and television.

    In the Public Notice, the banks could be offered sixty days to remove these loans from the land and assign them to the developer; well, the Minister of the Interior publicly stated that they were a matter for the bank and the developers. If indeed these loans infringe banking laws/regulations there is every justification to have them removed.

    A Public Notice, providing of course the media in Cyprus will actually print them, is an inexpensive way to globally draw attention to the Cyprus property problem. If the Public Notice actually named the banks concerned their share prices could undoubtedly be affected forcing the banks to due something about it, for additional Public Notices could always be issued. A Public Notice is also a legal notice that can be produced in court as evidence of the information of information or requesting an organisation(s) or people(s) to do or react to something. (I’m not a lawyer by the way.)

    With the thousands effected a this Public Notice will draw the attention of legal organisations looking for the opportunity to represent organisations on a genuine, not the ambulance chasers, “no win no fee” basis. If successful, the Cypriot lawyers could be the next target.

    Got to be worth a try.

  • paul lambert says:

    As part of my action against the appropriate parties in Cyprus, going on since 2007, I have brought up this issue with the CCPS. As usual with them all, their first tactic is to not acknowledge your complaint in any way, despite follow up letters. However I will continue to try to drag their heads out of the sand and make them sit up and take notice. I constantly encourage everyone on our Facebook protest group to write the letters and emails to the offending parties and to the government departments that have responsibility in these matters. Without individuals making the small efforts this whole shabby affair will will never be solved. I’m sure Nigel Howarth will give any contact details necessary. He has been of great help to us over the past years. Everyone who has a problem also has a responsibility to take whatever action is available to them. Its no good just waiting for everyone else to do things on your behalf. Contact national newspapers, MEPs,the OFT, FSA, Cyprus Bar Association, Attorney General, CCPS, your developer,bank and solicitor. Until you have done all this you cannot even start to feel sorry for yourself. Harsh but true. Every little bit that every individual does, adds to the case and eventuall the EU will have to take direct action rather than just be embarrassed by the actions of one of its member states

  • Nick Hills says:

    Considering all the personal grief and flack he had to put up with, Denis O’Hare is to be congratulated on maintaining a stoic attitude on behalf of us all. (Considering that stoicism originated in Cyprus, there is a sweet irony in this.)

    One thing is for sure – the entrenched positions of the vested interests in the Cyprus property market responsible for the wrongdoings will hope that this is a 7-day wonder and will vanish.

    It is therefore incumbent on us all to be vigilant and support the CPAG campaign in the weeks and months ahead.

    Go for it Denis!

  • Costas Apacket says:

    The Guano begins!!

  • Andrew says:

    It is hardly surprising that the head of Cyprus consumers association and some lawyers have never heard of the EU directive. The people with power in Cyprus only ever see and here what they choose.

    Cyprus is happy to join the EU club. They just don’t like to play by the rules.

    Well done Denis O’Hare and CPAG.

  • Alan Waring says:

    A very positive development, although regrettable that it had to come to this because of intransigence by the Cyprus authorities. Given that long-standing intransigence, I suspect that they will not simply admit ‘mea culpa’ and roll over spaniel-like to have their tummies tickled. Expect continued foot-dragging, obstruction and evasion all the way even if it means yet more damage to their reputation and the economy. So be it.

  • Robert Briggs says:

    Perchance we are approaching the moment of truth. If the EU is fit for purpose?

  • @Peter – It is estimated that one third of the outstanding deeds are for properties purchased by non-Cypriot buyers.

  • Peter says:

    And don’t forget we need to seek damages, and compensation for the hurt feelings, worry and discrimination as most of the missing deed effect overseas buyers, so its discrimination ‘per se’.

    The only way to get their attention is through the wallet.

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