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Government planning amnesty bulletin: part 1

The Interior Ministry has published a bulletin explaining the provisions of the recently approved bills designed to alleviate problems in issuing Title Deeds resulting from planning infringements.

OVER the next four days we shall be publishing the contents of an English-language bulletin produced by the Cyprus Interior Ministry outlining the key features of the recently approved planning amnesty bills.

This, part one in the series of articles, contains the key features of the amended legislation. Subsequent articles will contain the key features of the Town and Country (Amended) Law 2011, the Streets and Buildings Regulation (Amended) Law 2011 and the Immovable Property (Tenure, Registration and Valuation) (Amended) Law 2011.

Key features of the legislation

The key features of the amended legislation, which clarify the aspirations of the system introduced, are the following:

  1. The legality of the building is no longer a prerequisite for the issuing of an updated title deed. It is made possible for a certificate of registration to be issued for a building with certain irregularities; however, these irregularities are to be recorded on the title deed.
  2. Updated title deeds can be issued, despite any building irregularities, provided that an application is submitted to the Building Authority, together with an accurate description of the building as well as any irregularities that may appear, in comparison to the building or the planning permit issued.
  3. The issuing of a title deed with notes does not render the relevant building legal. Where irregularities exist, substantial or otherwise, the Building Authority and/ or the Planning Authority, and/ or the Director of the Land and Surveys Department, are empowered to take measures against the owner, so that he can be persuaded to fulfil all obligations arising from the legislation and the permit.
  4. The owner of the development, as well as the supervising engineer, are obliged to inform the Building Authority, within a specified period, as to the completion and beginning of use of the building, and to any alterations which may not conform with approved plans and conditions of the permits.
  5. The right to activate necessary procedures for the legalisation of the development or for the issuing of updated title deeds, is extended – apart from the owner – to the purchaser (under certain conditions), as well as to the Competent Authority (Planning Authority, Building Authority, or the Director of the Land and Surveys Department). Consequently, the owner is no longer the only party that can invoke these procedures, particularly in cases where the owner is reluctant or unwilling to fulfil his obligations, as these arise from the conditions of the permits he has previously secured.
  6. Updated title deeds are issued in the name of the original owner, and not in the name of purchasers. Authorities involved in the procedure do not have the power to transfer property rights to purchasers, without the owner´s consent. However, it is of crucial importance, that separate title deeds are issued for individual units of a larger development, as this facilitates significantly the purchaser to invoke the right of specific performance of the contract of sale, through action taken in the Courts, against the vendor. The transfer of property to purchasers is performed by the registered owner, either voluntarily, or by an Order of the Court, issued at the request of the purchaser.
  7. Concerned Authorities shall inform each other directly on any actions taken towards the legalisation of the buildings, and will not depend on the owner´s initiative.
  8. In all three amended laws, Competent Authorities (Planning Authority, Building Authority and the Director of the Land and Surveys Department) are empowered to impose administrative fines, in cases where the owner is reluctant or unwilling to submit the required declarations or applications for the legalisation of buildings, or irregularities in buildings, or for the issue of certificates of approval or certificates of unauthorised works or updated title deeds. Administrative fines are considered to be the means for obliging those parties with a legal responsibility to comply with their obligations by law. It is expected that strict administrative fines will definitely have a major impact on wrongdoers. Consequently, as a result of the incentives provided, but also in view of the risk of heavy administrative fines being imposed, all owners have a real interest in using the potential provided by amended legislations.

Important note

The contents of this Bulletin do not in any way replace texts of the Town and Country (Amended) Law 2011, the Streets and Buildings Regulation (Amended) Law 2011 and the Immovable Property (Tenure, Registration and Valuation) (Amended) Law 2011. In case of contradiction between the contents of the Bulletin and these Laws, legislation takes precedence over this text.

Readers' comments

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  • @Steve – there is no easy way out of this situation. However, assuming that the seven properties have been completed, the buyers can apply to have their Title Deeds issued.

    As for completing the development and the infrastructure, this is obviously going to cost money.

    Do the buyers have a lawyer who is representing their combined interests with the liquidator? This is probably the first thing you buyers should be doing to protect their interests.

  • Steve says:

    Let’s try sorting out this scenario. The builder takes full payment for 7 properties. He then goes into liquidation leaving the site with no infrastructure including road, footpath , drainage , boundary Walls or electricity supply.

    There is also one plot un-developed which makes up part of the planning permit so the site cannot be finished.

    There are no developer mortgages on the site. The original architect will not come anywhere near the site even though we have proof that he was one of the fortunate people to get paid. He wants paying again. Sort the bones out of that lot.

  • dimitri says:

    @Gavin, no problem, got the wrong end of the stick.

  • Gavin Jones says:

    dimitri (3.14 p.m.)

    For the record, I neither wrote nor implied that you agree with the statements made by the Interior Minister. Please re-read my words carefully.

    If you read what I wrote, you’ll see that I was praising you for letting non-Greek speakers know what was being said by him. Nothing more, nothing less.

    I trust that I make myself clear.

  • @Steve

    If the developer receives a poison Title Deed, then I guess it would be up to the buyer to sue to recover their loss.

    Take the situation where the developer has built a block of apartments and added an extra floor that the authorities issued with a ‘poison’ deed. The only way to correct the problem would be to demolish the third floor – and the people who had purchased apartments on that floor would have to sue.

    I don’t think the specific performance issue will cause a bottleneck; it doesn’t cause a problem at the moment.

  • dimitri says:

    @Gavin Jones, I am just telling people what the interior minister said I am in no way condoning the smoke and mirrors tactics, or the legalizing of the mis-selling of properties. I was gutted not to be able to be call the show and ask him straight if buyers will get lumbered with the developers debts….through this law and specific performance.

    @Nigel the best way to deal with this is get a one to one with Sylikiotis, he bragged about being one of the few ministers who see people during Saturdays..but i guess I will want written guarantees of what applies as his word hmmm not so sure

    In the meantime I will pester the persons on the 22806400 desk at the interior ministry to see what the truth is…? as per Johnny Cypus remark: This particular legislation concerns properties that have no, or are in violation of, a planning permit.

    It is of no help to buyers who cannot obtain proper Title because of an existing Mortgage or charge over a property that is held by the Developer’s Bank

    In fact their plight may be exacerbated, since under the so-called ‘Specific Performance’ provisions

  • Steve says:

    Just a thought on reading paragraphs c and f.

    Suppose a developer receives a poisoned title deed, and decides to sit on it until forced by the authorities to fix the problem and update the deed, so that it can be transferred to the buyer. How long can that situation persist? Maybe until the buyer agrees to pay the fine or to fix the planning transgression?

    Under para f, the buyer is at liberty to take legal action to force the developer to transfer the property, but until the deed is updated the property cannot be transferred. Are we looking at a potentially huge bottleneck?

  • @Johnny Cyprus – you say “Once Title is transferred, the Developer can no longer re-mortgage the property, but the property may be still saddled up with the original charge.”

    That is just not possible – the Title Deed can only be transferred once the developer has repaid the loan and the bank has lifted its charge against the property.

    When you get a Title Deed to a property registered in your name you can be 100% certain that no-one has a claim against the property – no mortgages, no memos, nothing.

  • mikey be says:

    Did I read that right? Point ‘h’ of the bulletin refers to hapless purchasers of illegal or irregular property as “wrongdoers”?

    That’s what Cyprus thinks of us. Cheers!

  • @dimitri – can I add my thanks to those of Gavin for keeping us up to date on the government’s spin.

    As I mentioned earlier, the four articles in this series look at the provisions of the ‘Town Planning Amnesty’.

    Information on the financial aspects of developers’ mortgages will be covered by the new ‘Specific Performance Law’ – and I hope to have details of that shortly.

  • Gavin Jones says:

    Dimitri.

    Thank you for keeping all those non-Greek speakers up to date with the spin that the Interior Minister is pumping out on the television. Most enlightening and extremely valuable. DO continue as you’re performing an invaluable public service.

    CPAG (Denis O’Hare).

    Once again, thank you for keeping everyone affected by this chicanery informed with your erudite explanations.

  • dimitri says:

    @Johnny Cyprus, Mr. Interior minister on tv yesterday said that the legislation was of use to buyers who cannot obtain proper Title because of an existing Mortgage or charge over a property that is held by the Developer’s Bank.
    BUT he failed to mention cost to duped buyers…as you mentioned unpaid property taxes etc

  • CPAG says:

    We have received the response below from the Ministry after we emailed them yesterday upon receiving the bulletin from them out of the blue:

    ‘We have transferred the Planning Amnesty Bulletin on the front page of the Ministry’s website on the left side. Hopefully it is easily accessible now.

    I’m afraid the relevant application forms, as official documents, are not produced in English, but this cannot be a problem, given that those forms must be filled in with the assistance of authorized professionals (architects, civil engineers).’

    We are also hearing that lawyers are approaching buyers in respect of the amnesty and offering to act for them – BEWARE!

    We have also sent the bulletin to the EU Justice Commission, who we are now in contact with, as we think that a developer transferring less than perfectly clean Title Deeds to a buyer is an infringement against the Unfair Commercial Practices Directive – not to mention Article 23 of the Constitution.

  • dimitri says:

    @Nigel, thanks Nigel for the input, yesterday I played back a Cypriot program on Sigma called eheis meson (watchdog type program), Interior Minister Mr. Sylikiotis was on the show answering queries on the amnesty bill…one caller called to say he was living in an apartment block had paid for in full for his apartment but had no deeds yet. Sylikiotis said caller had right to use the amnesty law and proceed to gain his deeds independently of whether or not developer had begun proceedings to do so…he then threw in the point what if the apartment block is mortgaged? Because government cant tell the bank what to do with the new tools at buyers disposal and using the specific performance law buyers can take the developer to court and ask for separate title deeds….he failed to mention though who would pay costs owed to bank by developer…

  • Johnny Cyprus says:

    This particular legislation concerns properties that have no, or are in violation of, a planning permit.

    It is of no help to buyers who cannot obtain proper Title because of an existing Mortgage or charge over a property that is held by the Developer’s Bank.

    In fact their plight may be exacerbated, since under the so-called ‘Specific Performance’ provisions, once Separate Title ‘Deeds’ have been issued; they may be forced to pay Property Transfer Tax, Immovable Property Tax and Lawyers fees in return for an Immovable Property Registration Certificate that is not worth the paper it is printed on.

    The small print on these Certificates already states that “Mortgages or Expenses that may burden the property are not indicated”. So you would not necessarily get to know that you had gone to all this expense to acquire Title to a property that was really owned by the bank.

    Under the existing chaotic system, Developers are free to take out new mortgages on property that they have ‘sold’. Curiously this can be of advantage to the buyer, for instance where a charge that pre-dates his Sale Contract is replaced by one that post-dates it. In such cases, the buyers ‘Specific Performance’ charge has priority over the newer charge. Once Title is transferred, the Developer can no longer re-mortgage the property, but the property may be still saddled up with the original charge. Such charges would have priority and would frustrate a subsequent sale, especially if the new buyer required a loan to effect the purchase.

    One cannot help but think that the Legislation may have more to do with increasing Tax revenue than helping property buyers who have been duped into paying for property that still belongs to the vendor and his financiers.

    And another thing, why would anyone want a document that confirms his house is in violation of a planning permit anyway? It would only reduce it’s value.

  • Andrew says:

    So there we have it. Now where does the queue start. I can`t wait to buy a property in Cyprus, now that I can have a second rate title deed or I can take the developer to court at my own expense, assuming the same developer does not have a prior mortgage of course.

    If any prospective purchaser is in doubt , they should remember that this is the supposed to be the answer to the title deed trap.

    Anyone any good at unravelling Gordian knots, Mr.Minister?

    When they tell the EUROPEAN COMMISSION that they have fixed the problem Let us hope that they fall about laughing at the solution.

  • Gavin Jones says:

    Yet more deception and general spin. Will it never cease?

    The nursery rhyme, ‘Ring-a-ring-o-roses’, came to pass as a result of the Black Death which arrived in Europe in 1348 and saw off approximately a third of the population.

    Wouldn’t it be lovely if certain developers, lawyers, bankers and their mates in government could be “seen off” in an appropriate manner and hence spare us from this perpetual round of cynical, fruitless pronouncements…

  • Jill Warr says:

    Thus, we turn one large circle – yet again!!!!

    Everybody is aware that applying to the Courts is a hugely costly waste of time, and Title Deeds containing a note of wrongdoing, will simply mean – NO SALE!!!

    And as for these ‘competent authorities’ – since when?

  • @dimitri – I knew this article (and the following ones) would raise a lot of questions.

    At the present time the laws are only available in Greek (although I understand that the Interior Ministry plan to provide English-language translations of the laws and the relevant application forms).

    From what I understand from the bulletin, the registered owner of the property is responsible for progressing the issue of Title Deeds. However, under the temporary provisions of the law purchasers may also submit a statement of intent for legalising irregularities in the property. In the case of developments consisting of a number of units such as apartment blocks, it is preferable that applications are submitted jointly by as many purchasers of the property as possible, so that procedures can be accelerated.

    They have until 8th October to submit applications.

    However, if the developer has a pre-existing mortgage on the property I would say that there is little point in buyers doing this as they have very little to gain.

    I can’t answer the second part of your question.

    The Specific Performance law has been repealed and will be replaced at the end of next month. I do not have full details yet, but I understand that purchasers will be to sue for Specific Performance to ‘force’ the developer to apply for Title Deeds (but again there is little point if the developer has a pre-existing mortgage on the property).

  • dimitri says:

    Nigel good info, in layman’s terms, does point ‘h’ mean the onus is on the developers by law to progress with what will either result in deeds or poisoned deeds for purchasers or deeper debts for themselves due to inaction?

    If properties have been built but no Certificate of Final Approval has been approved or requested will the developers in question be ‘caught’ via the amnesty bill? €1,000 a month (peanuts for some developers I know) but I wonder if the €1,000 and month has a ceiling that will lead to repossessions? or is this putting the onus on purchasers to chase deeds via specific performance ultimately? and paying state for any irregularities of the developers projects in order to attain deeds?

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