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Troika in moves to address Title Deed issue

Suggestions to resolve the Title Deed-cum-fraud mess have been put forward by the troika in their draft memorandum to the government following a review of the Island’s economy published in July.

PUBLISHED in July, the European Commission paper “Macroeconomic imbalances – Cyprus” presents an insight into various aspects of the Cypriot economy and risks resulting from imbalances in the system.

The 45 page paper touches on topics that have often been reported in Cyprus Property News, including the Title Deed-cum-fraud mess.

During their investigation, the paper’s authors confirmed that “The property market in Cyprus is affected by a title-deeds problem. For a number of administrative and regulatory reasons, between 120,000 and 130,000 properties are currently lacking title deeds. The average time for obtaining a title deed is just under 12 years and more than 200,000 owners are affected by this. The title deeds problem is a significant impediment to concluding transactions in the housing market.”

The paper suggests that “procedures and regulation for building approvals and deeds should be made more efficient, to address the significant delays in issuing title deeds. Currently the long average time of obtaining a title deed is an impediment to concluding transactions in the housing market, thereby affecting the risk of the collaterals.”

Today’s InBusinessNews reports that the Troika’s draft memorandum to the Cyprus government contains many references to the island’s real estate sector. According to the report, the troika proposes a host of actions that the Cyprus government needs to take to resolve the Title Deeds-cum-fraud mess, including:

  • All outstanding Title Deeds to be issued by the fourth quarter of 2013; changes to the current legislation will be necessary to accelerate the process.
  • The implementation of a consolidated computerised system for the access, management and dissemination of deed records, mortgages, and real estate transactions by the third quarter of 2013.
  • A monthly update on the Town Planning Amnesty plus further incentives to reduce the number of residential permits pending.
  • Changes to the legal framework that would enable banks to dispose of properties that have been used as collateral and whose loans have not been serviced for a period of 18 months.

The troika also wants to see the full implementation of Directive 2008/52/EC on certain aspects of mediation in civil and commercial matters.

In the section on banking, the memorandum concludes that one of the main problems affecting the banks is their excessive exposure to the property market. It also maintains that the calculation of nonperforming loans should include those that are fully secure.

Readers' comments

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  • C.Zoppos says:

    I have been reading your article on the Title Deed problem in Cyprus and I am one of the many that I have been affected. I am residing in South Africa at the moment and we have been waiting for more than 15 years for the property we bought in Paphos to obtain the title deeds, so we can come and retire there. Please advice me if its anything we must do to speed up the process. -Kind Regards C.Zoppos

  • uptown girl says:

    Will believe it when it happens, it’s time they used computers in Cyprus instead of files on the floor as in the town hall Limassol.

  • Simon edwards says:

    The title deeds will be issued to who? The owners or the banks where the mortgages are placed as is usually the case? Now comes the Gordian knot. The title is held against which mortgage the developers or the client (resident). I think the guano is speeding towards the fan and a simple umbrella won’t keep the spray off. I really can’t see a solution to this mess. Unless of course the developers assets are targeted.

  • Andrew says:

    “Changes to the legal framework that would enable banks to dispose of properties that have been used as collateral and whose loans have not been serviced for a period of 18 months.”

    This sounds ominous. Are they proposing that banks can sell properties which have been used by developers to secure loans, which the subsequent buyer had no prior knowledge of?

  • MarkD says:

    Can someone please tell me what happens when Troika hands over the cash and Cyprus bails on its obligations??? I’m pretty sure all the money will be spent by the time anyone realizes ??

  • Eddie Smyth says:

    I am from Ireland, the Celtic Tiger, the poster boy of economic success….now the poster boy of Troika induced austerity which brings with it social and economic destruction, an unsustainable and unacceptable level of tax increases and cuts affecting the young, sick, unemployed and working class while making the wealthy better off and protecting the system and inner circles of power.

    Whatever agreed in the program of understanding, commitments and time frames here will be adhered to, to the letter or they will not draw down funding…..the time-frame of 3rd and 4th quarter solutions to this 40 year old admin/title problem seems overly optimistic.

    You read here a few weeks back that the Irish minister Creighton said “get on with it” along with a lot of hot air about the Government and Irish economy today…This is it.

    In fact the opposite is the real story…read here.

    Stephen Donnelly TD: We’re mad as hell and need to show it

    Basically the situation here will get worse, much worse in the years ahead. Title deeds will be the least of the worries. If the ECB/ESFS get directly involved and finance the banks it could help somewhat though, bank debt will be the killer blow here,,,,,just like the 200 tones of explosives in Mari was, primed and ready to explode.

  • Arthur says:

    Perhaps the Troika should put on their Sheriff Badges and grab the Cyprus Government officials by the neck and make them personally responsible for these suggestions to be carried out, then you would surely see them head for the hills.

    The measures needed to do this have got to be as stringent and forceful as possible if they are going to try and clear any kind of backlog. This definitely includes a more realistic amnesty extension on the slight deviations of planning that have already taken place.

    If these individuals can’t or won’t learn to use computerised systems move them aside and bring in those who can, surely that would cause the shake up that is needed to get the younger generation involved and working.

  • Stuart says:

    Third quarter 2013 is less than a year away so we won’t have long to wait until all the sceptics are entirely justified for their predictions. Surely the Troika were not so naive as to think the Cypriot government would comply with such a timetable? Trouble is, if the Troika can’t prevail on them to mend their ways, can anyone?

  • Steve says:

    This is encouraging; a number of steps in the right direction. On the other hand…..

    The Troika document is a “draft memorandum”, which has not been responded to by the government of Cyprus, who must still be chasing loans from the East. I recall the Troika’s being miffed because Cyprus has made no response to the “proposals.” Further, I do not like the support that the Troika, by asking for monthly updates, is putting behind the Town Planning Amnesty, which is a hugely unpopular piece of legislation because it is so unfair to buyers and so loaded in favour of the developers/sellers. Used cynically with the appropriate “further incentives” that are called for in the proposals, this legislation can be a way out for the building and banking alliance and for the government.

  • Mike says:

    I wonder what colour the sky is on their planet!

    Memo to self – ask Ladbrooks what odds they are giving if these recommendations are not implemented on time, got to be worth betting everything we have on it (and I am not a gambler).

    Does this Troika not realise that this is Cyprus, centre of the known universe, land of special circumstances, place of perpetual sun and Swiss franc mortgages, porous concrete and where criminal acts are merely civil disagreements. Are they not aware that time frames are not something that can be considered under any circumstances, where union “conquests” are to be protected above all else, where red stop lights are merely for consideration as Green is the default and where policemen are kept away from any kind of possible confrontation with criminals by carrying out surveillance from coffee bars, restaurants and on the highway.

    And there I was thinking they had a degree of intelligence, insight, awareness and investigative auditing procedures to see beyond misinformation handed to them by non complying governments with something to hide.

  • Denton Mackrell says:

    On the one hand, the Cyprus authorities will do all they can not to implement these recommendations. However, on the other hand, at least we now have from this high (highest?), and independent, authority a succinct confirmation of the problem, its scale and the required remedies. The places for the conspirators (govt, developers, banks, lawyers) to run and hide – and deny – are disappearing fast.

    Moreover, if the govt fails or refuses to implement these requirements, will the Troika not be entitled to use this fact as one example of why subsequent tranches of the bailout should be put on hold?

  • MARTYN says:

    I can understand the hoots of laughter and hollers of derision but lets recognise this big step forward : an open statement by the Troika highlighting the abuses over the years and the size and scale of the current problem is to be greatly welcomed, especially the Proposals to sort the almighty mess – yes, I can see that Cyprus government, professions etc will want to ‘duck and dive’ re process and, especially, the ambitious Troika timescales – including perhaps the sourcing of non-EU bailout funding to avoid being ‘told what to do’ by the Euro/Eurozone hierarchies. A current President wanting to avoid anything controversial or ‘unpopular’ until he ‘escapes’ (to what – ignominity? worse?) next February will certainly want to hinder any early progress on these fundamental and ‘vital to the future of the Cyprus economy/future’ matters. Anyone wanting to write a ‘How Not To’ book on Good Leadership might be thinking about using the current incumbent as a primary feature?

  • Costas Apacket says:

    I think it is significant that the Title Deeds debacle has been highlighted in seperate ways by both the EU and the Troika, using similar language and recommendations to right the wrongs that exist.

    The cat is well and truly out of the bag.

    I suggest that the Cypriot establishment will fight tooth and nail to thwart any progress in this area and will engage in guerilla tactics to slow down progress at every opportunity.

    At least some light is finally reaching this dark corner and showing up the ugliness that lurks there.

  • Gavin Jones says:

    Never fear.

    The troika will insist that ALL measures will be fully implemented. That’s a certainty. Honest. Cross your heart and hope to die. You can bank on it.

    If they aren’t, they’ll ensure that all members of the government will be shot at dawn on empty stomachs. That will be written into the agreement. You can bank on that too. Phew! Feel better already.

  • terry liversidge says:

    My sides are spliting with laughter.

  • janner says:

    And what will happen if the Cyprus authorities don’t implement these measures……………nothing! Genius.

  • Geo says:

    “All outstanding Title Deeds to be issued by the fourth quarter of 2013”

    “The implementation of a consolidated computerised system for the access, management and dissemination of deed records, mortgages, and real estate transactions by the third quarter of 2013.”

    Ha ha ha ha ha ha ha ha ha etc ad infinitum

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