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.