HUNDREDS of homeowners still without Title Deeds to their properties have handed over thousands of Euros in recent weeks to companies promising to provide them with their long-coveted ownership papers.
Three property firms – Buy Sell, Fotos Pittadjis and City Living – are asking for between €1,000 and €4,000 in return for helping owners who either live abroad or feel overwhelmed by the new legislation which supposedly simplifies and eases a procedure that has left around 100,000 foreign home owners without their Title Deeds.
The firms’ sales pitches have been met with scepticism and clear warnings from some industry observers on-line – some even decrying them as “preposterous” or “scams”.
Yet, as of Friday, 235 house buyers had signed up for the Buy Sell’s service, paying their first upfront instalment of €1000, with a total of €4,000 due when they receive the Title Deeds. Buy Sell’s 70-strong Title Deeds team expects to handle up to 2,000 applications.
Some people waiting 20 years for titles
Not surprisingly, this move had been unpopular with the developers.
In the past week Aristo Developers and the Cyprus Land and Building Developers Association (CLBDA) both issued statements advising purchasers to be cautious. At issue is the legal amendment, passed in May, which legalises minor building irregularities that until now were a major cause stalling the release of Title Deeds to the owners. It also lets purchasers apply for them.
The Interior Ministry’s Planning Amnesty Bulletin says that: “The right to activate necessary procedures for the legislation of the development… is extended – apart from the owner – to the purchaser (under certain conditions).”
“This (legal change) is a major development, since the absence of an independent Title Deed is extremely dangerous especially at this time and in light of the present financial crisis,” says the sales email pitch from Pittadjis, one of the companies offering to get Title Deeds for €3,000. So what do you get for your money?
According to Buy Sell’s Chris Hajikyriacou, you get a 99 percent chance of receiving your deeds for €4,000, however much it eventually costs Buy Sell.
“The procedure requires an architect or civil engineer to inspect the property for any illegalities or irregularities. Following their report an application will be made to the relevant authorities… for the issuing of the Title Deeds,” he said.
At the same time, Hajikyriacou said, Buy Sell’s “tax experts and accountants will commence with obtaining your Tax Clearance. Once all the necessary procedures have been completed the Title Deeds will be issued.”
Aristo Developers have been quick to criticise a service that encourages “property buyers to pay substantial amounts of money for services regarding assistance with the issuing of Title Deeds”.
“Aristo Developers would like to reassure all its clients that the company will assume all responsibilities regarding … Title Deeds thereby avoiding the unnecessary costs made to third parties,” the company said in paid advertisements in the local press. The CLBDA went further, advising buyers to “play it safe”: “Buyers should be warned that they may be trapped into additional expenses and contributions, which they may have already paid or are not necessary to pay.”
The strongest warning of all has come from local property expert and Cyprus Property News editor Nigel Howarth, who said the firms’ service charges are unrelated to the actual cost of securing Title Deeds.
The full cost, Howarth said, could include any of the following:
- some of the developer’s mortgage on the land,
- charges to correct any planning irregularities,
- the developer’s tax liabilities,
- the cost of a tax clearance certificate to the Land Registry and
- property transfer fees to the Land Registry.
“Buyers wishing to recover these costs (excluding property transfer fees) may sue their developer. This will involve additional legal and court fees and there is no guarantee that the court will rule in their favour when their case is eventually heard,” he told the Sunday Mail.
Asked about these costs, Buy Sell marketing manager Chris Hajkyriacou said the company would cover them. “Buy Sell is not making any money on this… We are paying for all the costs of the developers, for the permits and for the certificate of final approval,” he said.
“People are fed up and don’t trust the developers… They are all talk – there are some people who have been waiting 20 years for their Title Deeds.” Even if these outside services can help owners secure deeds in cases of building irregularities, there remains the far thornier issue of those who bought property from developers holding mortgages on the development. In such cases the banks hold onto the Title Deeds until the developer clears his mortgage, even if the buyer has paid the developer for the property.
According to Howarth: “The main barrier… will undoubtedly be a developer’s mortgage that pre-dates the buyer’s contract of sale.” In such cases the developer’s bank will not release its charge on the property until that mortgage has been repaid.
“I know Buy Sell say that a buyer’s contract will take precedence over a developer’s mortgage, but this will only apply to sales that take place after the new law is implemented, it does not apply retrospectively to sales that have already taken place,” Howarth said.
Finally, the new law requires that the developer do all that is needed to secure deeds in a timely manner, including, where necessary, applying to have any planning infringements legalised.
If these infringements are severe, the private firms would have to cover the cost of a redesign.
Hajikyriakou said the firm would try to avoid taking on cases where the issuing of Title Deeds have stalled because of pre-existing mortgages, but that if they take a case they would cover all legal costs if the matter went to court. He said: “If developers refuse to transfer the property to the purchaser, we will arrange a court order… If it will cost €5,000 we will cover the last €1,000 out of our own pocket.”
For those who do not wish to chance it with the private agencies, you can make the application yourself and wait for the government to do the job for you.
This requires submission of a ‘Statement of Intent’ form before October this year, followed by a full application by April 7 2014, available from a Citizens Service Centre.