From a Dream to a Nightmare
THE long-dreaded day when banks move to repossess homes sold by bankrupt developers with outstanding mortgages could be looming, after one bank has applied to auction up to 70 peoples’ homes.
According to the Cyprus Property Action Group (CPAG) Alpha Bank filed applications to the Land Registry to auction eight plots that were mortgaged to bankrupt property developer Yiannis Liasides.
Liasides’ story will be familiar to followers of Cyprus’ treacherous property market. He ceased trading in 2007 without paying off Alpha Bank, leaving around 250 people in 14 plots who bought properties from him without title deeds.
Now the bank has moved in on eight of the 14 after the official receiver faced opposition from residents and former Liasides directors.
In one of the eight, Anarita, Liasides reportedly made no mortgage payments since 2002, and since then the amount owed to the bank has likely exceeded the value of both land and properties that he built and sold to residents. Unfortunately, as acting interior ministry permanent secretary Andreas Assiotis said, land and buildings are considered as one asset to offset against the liabilities, meaning banks may claim to houses on mortgaged land. “The Ministry of interior tried to make it possible for these to be dealt with separately, but the new legislation does not affect existing contracts.” Assiotis said, adding that buyers should take care to study their contracts before paying any money.
For CPAG leader and tireless property campaigner Denis O’Hare, this position reflects something of a U-turn by the government, which has previously assured buyers’ rights to property, even if they don’t have their title deeds.
“All along the Ministry of Interior has been saying that once a certificate of sale is lodged with the land registry, the buyer is protected. We can now see this myth of protection has been scotched by this action of Alpha Bank,” he added: “All reassurances to Europe about buyer protection have been shown to be hollow.”
For Anarita resident Diane Lloyd-Roberts, 68, who now faces repossession of the house she bought with her then husband in April 2002 despite a personal written reassurance from Interior Minister Neoclis Sylikiotis that her property is secure, the ordeal has proven a harrowing experience.
“The thing is: the (bank’s) loan is only for the land, not the house I paid for. How can they take my house?” said Lloyd-Roberts, who despite the stress of the situation is remaining defiant.
“I’m on the list with the others… I’m scared and I feel like I’m in a nightmare I can’t wake up from. But over my dead body will you get me out of here. I won’t go without a fight.”
The mortgage was taken out on her property just before she bought it, and had she been informed of this at the time by her lawyer, she said, she would have cancelled the sale. “We visited the lender bank who informed us that our developer had not paid anything back from loans he took out on our property in 2002.” She was later advised to borrow to pay off the developer’s mortgage, and the Ministry’s current advice is to get a good lawyer.
Instead Lloyd-Roberts took it up with the Cypriot authorities, complaining to the Competition and Consumer Protection Service in May 2011, and last month, with CPAG’s help, to the European Court of Human Rights to investigate the Cyprus government’s breach of the EU Unfair Commercial Practices Directive (UCPD).
So, what’s next? Well, this depends, in part, on the Land Registry, which can either approve or decline Alpha’s application, and whichever they choose could prove to be a pivotal moment in the Cyprus property market.
With an estimated €6 billion in mortgages in Cyprus a landmark auction could see other cash-strapped banks following suit, leading to potentially thousands of the 100,000 or so property owners – 30,000 or so foreign buyers – without title deeds facing repossession. According to Minister Sylikiotis, the Land Registry can block a bank’s application and should this happen, the rightful owners will remain in situ and the already ailing banks will have lost their money to the unscrupulous developers. Whether the banks or the buyers win, it seems the Cyprus property market is sure to lose with either dwindling investor confidence or reluctance from the bank to lend to developers.
The Ministry is assuring house buyers like Lloyd-Roberts that their rights are protected, while advising buyers to beware and victims to seek out a trustworthy lawyer and upholding a banks’ legal right to the assets on mortgaged properties.
In the meantime, Alpha Bank’s appointed (and independent) liquidator for Liasides developers, Ninos Hadjirousos, will continue his unenviable task of gathering everyone with a claim on the land and finding an alternative solution to auction and repossession.
Hadjirousos said the banks don’t want to see residents’ houses repossessed – a claim borne out by one case last year when a bank allowed a couple to stay in their home until death, after no one showed at the repossession auction.
However, Hadjirousos has struggled to get on board with Liasides property residents, who are wary of beginning the process without an assurance from the banks that they can stay.
“At the moment the residents have their property and no one would give assurances without knowing how deep the waters are,” he said.
The already treacherous waters have also been muddied by a group of ‘professionals’ who are taking payment – up to €5,000 per purchaser- in return for assurance that they will get their deeds, and who are discouraging residents from sending their details to Hadjirousos.
With the ministry on the fence, a pending EU investigation into unfair practices surrounding property sales and a financial crisis putting a strain on all actors, a negotiated compromise through the receiver could be if not the quickest, then the only solution.
Anna (05th. December).
I hope that for your own health, wealth and sanity you take some time to trawl through all the hundreds of previous articles and comments posted on this website. Read the heart-rending stories and comments from the countless number of property buyers who’ve fallen foul of all the chicanery that exists here.
To quote John Mackenroe at Wimbledon: “You cannot be serious”, and I refer, of course, to your admission that you’re in the process of buying a property in Larnaca. Are you truly ‘serious’?
As has been said on many occasions, the banks are complicit in much of this. In the Liasides case Alpha bank continued to lend money even though Yiannis Liasides failed to repay the bank under the terms of the loan. Yet they continued to grant more loans.
At the time of these loans, the man at Alpha was an old family friend so that may have had some bearing on the events but would still not excuse their reckless lending or failure to exercise prudent business practice.
The only reason a bank would continue to lend someone money without substantial repayments being made is the knowledge that they get paid by the developer or they can grab some innocent pensioners property and auction it to their mates at a knock-down price.
I agree with Odd-Job-Bob. Don’t hand over any more money.
I also agree with Mike. A lot of good Cypriot people are disgusted by this whole fraudulent mess. It would be great though, if more of them would make their voices heard. All nationalities should lobby their Euro MP and their local MP.
@ Mr Andyp, re; the banks involved in this scandal, I totally agree with you, they truly are scum!
The end is nigh, it is now only a matter of time. Please (as someone has already suggested) contact your MPs, demand an answer, in the nicest possible way, and contact your Euro MPs.
It is plainly obvious that the creative accounting and terminological exactitudes, which would appear to come as second nature to those that report statistics to the EU, have the upper hand and the ear of those that matter. Without voicing concerns in numbers and setting the matter straight then who will listen. A single voice in the wilderness against the full might of a Nations administration is no contest.
The Cypriot people are on your side too you know, as long as you do not tar them with the same brush you tar the authorities. They are equally as fed up with the situation as everyone else is.
Isn’t this brilliant news? No, really.
As Diane Lloyd-Roberts has taken her case (with CPAG’s help) to the European Court of Human Rights then that will bring to the EU’s notice the true nature of the total debacle that is happening here. And that’s the ONLY way anything will improve regarding property rights.
Read the paragraph above again:
“The Ministry is assuring house buyers like Lloyd-Roberts that their rights are protected, while advising buyers to beware and victims to seek out a trustworthy lawyer and upholding a banks’ legal right to the assets on mortgaged properties.”
I make that three mutually exclusive positions taken by the Ministry all at the same time. Alice’s Adventures in Wonderland were more straightforward!
@Lee – I have looked though the eight applications filed by the Alpha Bank (link in the article) and as far as I can see, none of them are for the site at Trimithousa.
But I suspect that the receiver, Ninos Hadjiroussos, may be looking at this and the other five sites, but I can’t say for sure.
I think your lawyer may have misled you. When you deposit your contract of sale at the Land Registry, it does not mean that you own it – merely have a claim to it. So if there are earlier claims against the land, such a mortgage or loan, these take precedence over your claim to ownership – first come, first served.
Also, you are treated as an ‘unsecured creditor’ which means that the ‘secured creditors’ will get part of their money back first (assuming there is any after the assets have been sold off) and then the unsecured creditors will get some of whatever may be left.
In the other case I mentioned, the lawyer acting on behalf of the buyers petitioned the court so rather than the court or the developer appointing a liquidator, another liquidator could be appointed who would look more favourably on the buyers. (I.e. He would try to liquidate other assets the company may have to repay the debts before selling off people’s houses).
The money you paid as a deposit would have gone into the company account, not Liasides personal account and the company is now in the hands of the receiver.
As for the €1.1 million, I doubt very much that this is Yiannis Liasides. He spent some time in jail for non-payment of VAT and I’m sure if he had the money he would have paid.
You should get in touch with the receiver, Ninos Hadjiroussos, to see what’s happening with the site at Trimithousa.
This is sad truly sad, and what on earth are the banks going to do with properties they cannot sell on? sit on them and wait till prices boom again (pigs will fly).
Will this Liasides case have any effect on those that had paid deposits on land for off-plan builds? In particular, land at the Trimithousa site, (Mythos Dreams). Money paid in good faith to Yiannis Liasides for a new off-plan villa disappeared with him. In contrast to other cases, there is no physical property, title deeds etc. involved here, just a plot of land, which supposedly is owned by the ‘purchaser’ (according to solicitor, due to ‘specific performance’), yet there seems no way of obtaining a return of the deposits through the courts because Yiannis Liasides is bankrupt (not if we believe the below comment of his €1.1m assets).
These deposits are not tied up in the property/mortgage scam, so why can they not be acquired from his personal assets?
OJB – you’re a straight talking guy and I agree with your comments (predictions)
The Cypriot System (machine) will always work in favour of Cypriots – never foreigners !
If they can get away with reclaiming Cypriot soil back in the hands of Cypriots – THEY WILL..
You mention not paying any more money until this dire situation becomes clearer in the near future. People should ask their mortgage lender if they can legally take a holiday payment break or even switch to a lower interest only mortgage. Anything that helps reduce the income into the Cypriot coffers.
Also, as someone has mentioned before, get all these helpful websites listed on the first page when searching for properties in Cyprus. At the moment, property developers still have the upper hand when advertising on the web. Your sites remain hidden most of the time?
Anna, NOOOOOOOOOOOOOOOOOOOO!!!
@Anna – the two companies in the Larnaca area are SNK Venus Home Developers Ltd and SNK Exclusive Properties Ltd. – more information at SNK Venus & SNK Exclusive liquidation proceedings
Nigel – Could you let us know who the 2 developers are in the Larnaca region facing bankruptcy, please?
I am buying there and would like to know if my developer is one of these crooks.
I’m still amazed that after all this time of Cyprus Property News publicising this sort of thing, and ministers and others making statements, and Banks obviously doing the wrong things over and over again, that this problem persists.
I’m also amazed that developers are still allowed to keep their assets and are sitting on them laughing at us fools.
The developers should lose their assets a long time before innocent and ignorant buyers lose theirs.
Cyprus Banks my favourite topic.
Sorry Nigel but these guys are the scum (no better nor more appropriate word available) of the earth and the facilitators of all that is wrong in Cyprus. They know exactly what is going on they are now just finding things a bit tough and out of their control.
They lend money to developers and do not ask for repayments to be maintained.
They lend on knowingly already mortgaged property.
They hide in the shadows knowing that they have security of our homes not just the land.
They use our deposits to lend this money to developers.
They use our car and house insurance money to lend to developers.
They use our credit card money to lend to developers.
We are actually paying for our own demise.
Give them nothing.
Well it’s all very well letting off steam here.
But it wont do any good.
Get onto your Euro MEP.
And if you are a British subject send a letter to the Queen 1st class, recorded delivery. That will get passed to the Prime Minister’s office, who then forward it onto the appropriate department. A chain of people complaining.
The louder the voice the more people will listen.
Good Luck and get writing.
This may be being cynical, but I think lots of people are missing the point re: the stage we are at with regards to repossession etc.
Many have said something along the lines of: “All the Cyprus government have to do is make title deeds available at point of sale and everyone will rush back to buying property in Cyprus. Why don’t they realise this instead of making up all sorts of other irrelevant stuff?”
Well, they do.
At some point in the future, once all ways of extracting extra cash from the present situation are exhausted, a new system will rise out of the ashes. This will entail title deeds at point of sale. Property investors, with very short memories, will flood back (as lots of people writing in believe).
Why should the government play their trump card when they can make money out of the extremely poor hand they’re holding? Believe you me, when faced with the choice of either being presented with an eviction notice or coughing up some more cash to pay the developers’ debts, there will be many who cough up. The Cyprus government KNOW this. Especially if the possibility exists that our UK assets may be affected…
If there is a straight toss-up between the ROC government supporting the banks or the hapless expats, if anyone wants to bet which one they will support, may I be your bookie please?
Luckily though, there is light at the end of the tunnel. When, not if, Cyprus get removed from the EU (next Friday is crunch time re: whether or not there WILL be an EU – hey, moments of history!) they may not be able to make any claim on our UK assets.
While waiting, refuse to pay anything. Oh, you’d be a crazy b#*ger to buy anything here with deeds either. Supply and demand, gents, supply and demand.
Its my understanding that bankrupt property developer Yiannis Liasides has a home worth over €1.1m and has done well out of the company. I understand the covenant of separate legal identities, but can anyone confirm his personal wealth before the banks expect the beleaguered home-owners to pay off his drawings?
It is surely now incumbent on Sylikiotis to issue a clear, unambiguous public statement on just how protected buyers really are who lodge their contracts with the Land Registry (LR). This is all the more necessary, not only because of the Liasides case which seems to have blown a gigantic hole through his previous statements, but also because he is in charge of the LR that reports to him and who will decide whether to protect the buyers’ interests first or the banks’.
This is not only a pivotal juncture in the Cyprus property market but also the Cyprus economy. If Sylikiotis and the LR support the banks at the expense of the buyers, then in effect they will have cut the property market’s, the banks’ and the overall economy’s throat. The banks may enjoy some short term benefit by repossessions but a disastrous long-term loss since the current boycott by foreign buyers will simply extend into a virtually permanent boycott.
In addition to Liasides and developer liquidations mentioned by Nigel, there is a growing army of ‘big names’ teetering on the edge of collapse, some of whom I know personally. It is typical to hear of developers owing the banks anywhere between 200m E and 850m E. On a 300m debt, for example, a developer is being charged some 23m E per annum but with 6-monthly capitalizing roll-up by the banks that amounts to more like 30m pa. With zero sales for the past two years and 2012 and 2013 looking the same, it is patently obvious that more collapses are imminent.
I do hope that the Cyprus Mail does not let Mr Sylikiotis off the hook and forces a public statement from him.
This just puts another nail in the coffin of the sales of new property. Nobody in their right mind should buy a property unless it has a clean title deed ready to hand over in exchange for payment.
This in effect means nobody should buy off plan or almost all new builds.
The Cypriot government, developers, lawyers & banks have effectively killed off the construction industry.
Hi Nigel
How much did the buyers pay the lawyer?
@Ian Hardy – No, the people in Larnaca haven’t lost their homes – but they are still at risk.
A lawyer acting on behalf of a number of the buyers filed their objections opposing liquidation proceedings by the court and was successful when the application was heard. (And he also spread his costs between those buyers who had objected).
Hi Nigel
Have the people in Larnaca lost their homes ?
@Ian Hardy – the statements are, in my opinion, very misleading as this situation clearly demonstrates.
I know some of the Liasides buyers who have paid building contractors to complete their homes – and they are now at the mercy of the bank.
There is a similar situation near Larnaca where two development companies have gone into liquidation.
Should have used an honest lawyer…I used one that advertised British trained, unfortunately she doesn’t have the British Law Society governing her actions. An honest lawyer in Cyprus? You pays your money and takes your chance…
The stuff of nightmares, the cronyism between developers, banks, planners, engineers, estate agents, lawyers etc. The circle of deception is endless, shrouded in this wonderful cloak of old British colony with the British system embedded in its culture. Explained like this it was easy for buyers to proceed with a certain degree of confidence, both domestic and foreign buyers will be caught up in this tsunami.
Despite the endless efforts by this property action group, the international coverage of all the injustices heaped on unsuspecting buyers, the legal threats when people are named, the pressure groups controlling the country, we end up now at ground zero.
This Liasides debacle is only the tip of the iceberg, a test case which if successful will be the key that will open the flood gates for a much bigger assault. The bank in question is probably the most scrupulous, pressured and arrogant bank on the island, but the corrupt system let this happen. This bank and all the islands banks are within their rights to call in their collateral, regardless of the individual human cost and suffering.
If there is not a positive outcome for the buyers from this particular case we can kiss goodbye to Cyprus as a civilised country, a country that allows freedom for its people, which protects the civil rights of its people.
A negative outcome will be our total ruination. It`s crunch time on all fronts.
I hope someone has the balls to put the yoke back into what could be the golden egg.
How can this happen?
The Interior Minister said in an article at https://www.news.cyprus-property-buyers.com/2009/07/24/cyprus-interior-minister%E2%80%99s-statement-on-title-deeds/id=002083 that:-
“the property market in Cyprus is stable and secure, and property buyers must be absolutely certain that their investments are safe here; indeed, property investment is much safer in Cyprus than anywhere else”.
and
“Nobody and no Authority anywhere can ever challenge the property rights or the ownership status of buyers of immovable property within the territory which is under the control of the Republic of Cyprus.”
And on the Citizens Charter website at http://www.moi.gov.cy/moi/citizenscharter/CitizensCharter.nsf/All/14024F191F54EBBAC2256E550020466D?OpenDocument it says:-
“The deposit of a contract of sale at the Department of Lands & Surveys creates an encumbrance of a great practical importance on the encumbered property. The subsistence of such encumbrance prevents the vendor from selling or charging any such property whereas the purchaser may obtain a judgment from the Court directing the registration of the property in his name, if the vendor refuses or fails to transfer the property within the time agreed as per contract of sale.”
How can property investments in Cyprus be ‘safe’ if banks are allowed to repossess peoples’ homes because the developer is bankrupt? It’s rubbish!