THE CRASH in property sales is not only attributable to the recession, record levels of unemployment and the unresolved Title Deed problems.
A good friend – a registered estate agent in the free areas of Famagusta – has been in touch to explain that she has no shortage of willing buyers and her company’s problem is getting sales to completion.
The company currently has 28 property sales where deposits have been paid but all efforts to move 21 of these forward are being hampered by inertia and bureaucracy:
Seven of the properties have title deeds – not a problem you would think – but tax clearance by the Inland Revenue is taking weeks, (the longest is now 6 weeks) as the Tax office staff are engaged in the collection of Immovable Property Tax.
These seven sales will result in a minimum of €25,000 revenue in Property Transfer Fees for the government (assuming the Land Registry does not inflate the properties’ market values) – and this figure does not include Stamp Duty and other fees.
Five of the properties have memos lodged against them by the Inland Revenue Department. Their developers have been negotiating with the Inland Revenue for more than 18 months to reach agreement to pay an amount per property.
If the Inland Revenue and the developers can reach an agreement, the developers are willing to release the share of the land. But the Inland Revenue keeps moving the goalposts so effectively these properties are unsaleable.
Their sale would result in a further €23,000 Property Transfer Fees plus approximately €12,000 in tax revenue from the developers.
Eight properties are burdened by pre-existing developer mortgages to either Bank of Cyprus or Ex-Laiki Bank. In every one of these cases the bank has agreed that the developers owe nothing on these projects yet they refuse to issue waivers as a waiver was not issued to the first owner.
This is an absolute travesty and in the longest running case, the lawyers, developers and our office have been fighting with the bank to issue the waivers for nine months!
We have another couple who have now been waiting over 4 months who have a severely disabled son and they need the money to obtain care for him.
These sales would result in Assignment fees of minimum €7,000 plus Stamp Duties in excess of €2,000 euro.
In a further three of these sales the projects have received their Final Certificate so the Bank will have to release the properties on issuance of their Title Deeds – or will they?!?
One 12-year old property has no planning permission. The buyer is fully aware of this and the developer has been very open about their efforts to secure the permit and it will be granted soon.
The remaining seven properties are clear and should (hopefully) move to completion in a reasonable timeframe.
She concludes that “A buyer in Famagusta needs to be extremely patient!!”
@Liz – I’ve had to consign quite a number of replies to Mr Kouzalis’ comment to the bin – and I don’t have any plans to go.
Thanks for your support.
@GIOVANIS KOUZALIS – Please don’t shoot the messenger!
The people you should be shooting are the disreputable lawyers who failed to protect their clients’ interests and the ‘crooks’ and charlatans who masquerade as legitimate property developers.
It is these people who have destroyed Cyprus’ reputation and who have contributed greatly to the destruction of the island’s economy.
The Town Planning Amnesty was designed to legitimise planning infringements enabling Final Completion Certificates to be issued. If developers had built according to the permits they had been issued, an amnesty would not have been needed.
As for the Title Deeds – according to the Interior Ministry a total of 3,521 Title Deeds for development projects were issued during the second quarter of this year. Only another 127,000 to go before the backlog is cleared.
As for the sale of new property – the figures speak for themselves – lowest for more than a decade.
Fortunately I had an honest lawyer and I, like many others, had no problem. I got my deeds in 1996 and I very much enjoy living here.
If you want to whinge about the property problems here in Cyprus you should speak to the Government and get them to introduce and enforce effective legal protection.
@Nigel
Firstly, please don’t go!
Secondly, I am sure you will receive many, many comments in response to lawyer, Mr Kouzalis.
Sadly, because of your comment guidelines you won’t be able to publish them!
@ Giovanis.
Have you ever tried selling a house without a title deed and a developers mortgage on it?
I would like to see good news as I am sure would many others but we can’t just make some up.
dear Nigel,
ARE there any good news to write?
if cyprus is such a bad place, WHY DO YOU STILL LIVE HERE?
what about the amnesty?
what about the title deeds given out?
what about the sales with no problems?
I DO HAVE A LOT OF SALES WITHOUT ANY PROBLEMS…surely there are problems, but not at the extent you are trying to show….
if Cyprus is such a place, SURELY you can go back to UK!
WITH RESPECT
GIOVANNIS
martyn. Surely you must take comfort in the statements made by Cyprus ministers over the years;”your contract is your protection”,”we must deal with this Gordian knot”. Nah, nor me.
The property sector is in fact hampered by Cyprus governments failing to act and protect buyers and the world now knows the truth. Indeed the Cyprus government has gone a step further by utilising the flawed system by placing memos on sold houses for the tax debts of others rather than trying to pursue the debtor timeously.
Well, well, well!
Well, NOT well really! Not well at all. But:
Assuming all this info comes from a respectable and honest Estate/Property agent, sorry but there seem to be so many who don’t fit this description in this country!,
Isn’t this just the kind of essential background that turns a shambles into a complete cess-pit?
Government departments, no doubt smarting from over-manning and over-paying remedials now underway, now seem to be delaying, in some cases blocking, legitimate transactions that might just see the Cyprus property markets maintain at least a little momentum.
And what do these Insights signal with regard for possible up-turns sometime in the future?
Just that the ‘new’ government, seemingly already reeling from all the other financial, economic, property, construction, banking, legal and government department inefficiency aspects that need attention, needs, if they ever want to get the Cyprus economy ‘going’ again, to urgently tackle the deep-rooted, ingrained ‘cultural’ problems that lie at the heart of all this.
I’m not seeing any encouraging signs on any of this at present, except possibly that they have agreed to welcome a lot more Russian planes and Russian tourists into RoC during the virtually trade-barren winter months!
Please do make a comment here if you think I’m being unduly pessimistic about all this!