EARLIER this month I was invited to speak to His Excellency The British High Commissioner to Cyprus, Mr Matthew Kidd, about the many problems faced by those who have bought property in Cyprus.
During the course of our discussion we touched on many issues including the problems of hidden mortgages, Title Deeds and the threat of possible repossessions:
Q. Although many British nationals buying property in Cyprus have a relatively trouble-free experience, a significant number run into problems. With regard to the problems reported to the High Commission, how does Cyprus compare with countries such as Spain, Portugal, France and other popular expatriate destinations?
A. In terms of sheer numbers, Cyprus has fewer problems than Spain. But in terms of their background and complexity, our work in Cyprus is as demanding as anywhere else.
Q. I know that you and the staff at the High Commission take a keen interest in these problems and offer advice where possible. But what practical assistance can the High Commission and HMG offer British citizens?
A. We publish information and advice on our web site and a list of lawyers who can offer assistance. British nationals can also contact our Consular Section for advice on to how to deal with specific problems.
Q. I know from earlier conversations that you bring these issues to the attention of the Cyprus government. When ministers hear of these issues how do they react and what actions do you believe they are they taking?
(I ask this question as many have become very cynical about the government’s commitment to resolving these problems, which have been apparent for many years).
A. We have highlighted the systemic problems at our meetings with government ministers and we are continuing to support and offer assistance to the government in their efforts to tackle property issues via the recently established Ministerial Committee.
Something has changed this year and it is helpful that the Troika has identified that Cyprus needs to address problems in its property market.
Cyprus has its own reasons; these problems have been allowed to slide for too long.
Both because of the Troika and their own recognition of the problems, the government has set up a Ministerial Committee, which held its first meeting in October. The Committee is currently gathering data that will be formulated into a programme of work. The subject of property touches on many areas of government including Finance, Commerce, Justice, Labour, Industry, Foreign Affairs and there is no quick solution to the many problems.
Q. The key problem faced by everyone who buys a new home in Cyprus is the long delay in issuing Title Deeds, a process that can take many years and sometimes decades. The troika has set the government an ambitious target to reduce the massive backlog of Title Deeds by the end of next year. Having had first-hand experience of how the system works this target will be impossible to achieve without significant changes to the way the process operates. Is the UK able to offer any assistance to the island’s government on this particularly thorny issue?
A. We have regular meetings and discussions with Ministers and members of the Committee and we have offered to show them how our Land Registry system operates in the UK.
We anticipate that the Committee will put forward proposals in the next few months on how Cyprus can achieve the targets it has agreed with the Troika.
Q. There is a general problem that many people have bought property built on land that their developer had previously mortgaged to the bank. Even though most of these people took what they believed to be independent legal advice, the fact that the land was already mortgaged was not disclosed to them.
A number of development companies have already gone into receivership and liquidators have started proceedings to repossess homes in the hope of selling them to recover the developer’s debts.
A. The government is still grappling with this situation and in particular the extent to which this will be permitted for primary residences. Our impression is that legislation on this subject may come out in the next few months.
Q. Should people lose their homes as a result of liquidations, is HMG able to offer them any assistance?
A. This is really the responsibility of the Cyprus government, which is facing the same problems as Greece regarding repossessions. Unfortunately this also occurs in other countries such as Bulgaria and is not only a Cyprus issue. Financially the UK Government cannot assist however the Republic of Cyprus Government is acutely aware of this problem and we will endeavour to assist where we can with advice and shared learning.
If the Troika targets are to be met the issue of repossessions will have to be resolved.
Q. Regarding the ‘hidden’ mortgage issue, a number of people have complained to the Competition and Consumer Protection Service (CCPS) on the grounds that the practice of failing to disclose ‘hidden’ mortgages breached the law. Others have complained that the banks failed to disclose the risks associated with foreign currency loans.
The CCPS has rejected all claims and as a consequence complainants have taken their cases to the European Court of Human Rights. I understand that the CCPS has received guidance from the European Union on this matter and is using different criteria when assessing new complaints.
Do you know whether the CCPS intends to review those cases that it has already rejected?
A. We have a little evidence that guidance from the European Union is prompting the CCPS to review its working practices. For example, we know that they have reviewed cases that they rejected previously.
Q. In circumstances where the developer is either unable or unwilling to pay his taxes, those buying property are unable to secure its ownership. The only way out of this problem is for the ‘trapped’ buyer to pay the Inland Revenue the tax owed by the developer and then sue the developer to recover the money.
In essence the victim (the buyer) has to pay for the misdemeanours of the culprit (the developer) – and then sue the culprit in the hope of recovering their money!
Although in the eyes of the law this procedure is perfectly correct, I would value your opinion on a victim having to pay for the misdemeanours of the culprit?
A. The payment of taxes etc. will need to be resolved in the context of the Troika agreement.
Q. Trying to find a lawyer who is truly independent is a very difficult task. Many of those who have run into problems with their purchase have found to their cost that the lawyer they engaged failed to protect their interests adequately for various reasons.
What would your advice be to anyone trying to find a truly independent lawyer to act on their behalf?
A. People should ask around for recommendations and to see if others have been happy with the service their lawyer has provided. Our list is a starting point.
Q. Cases brought before the courts can sometimes take many years to be heard. And even when cases get underway there are continual delays and adjournments – and occasionally the judge hearing the case is changed, which adds yet further delays. In one case a British national has flown to Cyprus on more than twenty occasions at his own expense to appear in court.
William Gladstone is attributed as saying “Justice delayed is justice denied” and many are exasperated and frustrated at the length of time it takes justice to be served – and there is also a general concern that the courts favour a Cypriot’s version of events over those of a foreigner.
Due to these perceived issues with the courts and the costs involved in taking cases to court, there is reluctance by British nationals to pursue their complaints.
Do you believe this reluctance is justified?
A. Going to court takes time and is expensive and the courts face an increasing workload. But there are provisions in the European Convention on Human Rights to ensure that cases are dealt with impartially and within a reasonable time.
Is there a systemic bias? A foreigner in any court where the proceedings are not in their language will feel vulnerable and every country has to ensure that its courts are not biased.
In some situations arbitration may be a more appropriate way of resolving disputes rather than expensive litigation proceedings.
Q. If you were to offer a single piece of advice to a British citizen planning to buy a property in Cyprus, what would it be?
A. Research. It is essential that people buying property in Cyprus or anywhere else do their research before buying. They should seek advice from those who have bought here and get their opinions and recommendations.
Resources
Website: British High Commission Nicosia
Advice: How to buy property in Cyprus
Lawyers: List of Lawyers
Living in Cyprus: Essential information for British nationals
Facebook: UK in Cyprus – British High Commission Nicosia
@Richard – Thanks for your comment – I think the High Commissioner’s reply to the last question is the most revealing.
Personally, I cannot see the property market in Cyprus ever recovering unless the government grabs the bull by the proverbials and sorts it out (with or without the agreement of the developers and banks).
In fact successive governments have delayed taking action for so long, I doubt that the overseas market will ever recover.
I recall when I first started work my boss said to me:
“Nigel, remember that credibility is like virginity – once you’ve lost it you can never get it back”.
IMHO Cyprus has lost it.
Well Nigel – thanks for doing this and posting it up. If I’m honest – the tone and content of the responses in most of the interview bear that ‘middle of the road diplomatic’ language which can so often create the illusion of progress whilst carefully maintaining the desired status quo.
It’s a long road most of us are on – but the tarmac is looking a bit less steep and slightly less strewn with pot-holes & landslip over sheer drops these days.
I won’t be taking both hands off the wheel just yet mind..and a good service station coming up out of the gloom anytime soon would be nice.
I think there is now enough information available for potential buyers to run a mile before buying in Cyprus.
The issue is how can victims of the scams safeguard their homes?
The Cyprus government have never prosecuted a developer selling a home without a completion certificate. A criminal offence under Cyprus law. Rather than enforce the law the Cyprus government tried to make money out of the farce through the planning amnesty.
The Supreme Court of Cyprus clearly highlighted the duties and responsibilities of lawyers when acting on behalf of clients in buying houses yet none have been prosecuted, nor even brought to account by the CBA.
Bankers lent money to buyers fully aware that the properties were already mortgaged by their developers.
Several years ago the Interior Minister told the EU in writing (I have a copy of the letter) that buyers were protected by the registration of their contracts.
This is quite simply a rogue state which condones corruption and must be held to account. How is another matter.
@Peter, could not agree more, over the years, for many of us have been involved in this for years, I have written to MP’s, MEP’s, government ministers, I have lobbied in person, stood outside the Presidential Palace with Conor O’Dwyer and lobbied the president and the secretary to the presidential office and yet I am under no illusion as to how useful this has been. My default setting is now, tell anybody, tell everybody and tell them often and tell them volubly, which is what I do, at every opportunity I raise the rotten, corrupt and amoral system in Cyprus. Spread the word, don’t buy in Cyprus until things change, simples.
@Peter Davis – Like it or not, William Hague is the head honcho. Perhaps if you enclose a copy of CAMRA’s Good Beer Guide 2014 with your letter you might get a favourable reply :-)
@ Nigel,
You must be joking when you say petition William Hague.
I this is the little guy who used to work on a dray and boasted of drink 11 pints a day? Who left school and has never held a proper job? As much in touch as his master.
Cameron thinks America saved us in 1939 from the German’s and has apologised to colonial countries because we bought education and infrastructure to remote areas. History was obviously not taught at public schools.
As for Sir Simon Fraser have you read the reports in the Daily Mail about how these diplomatic workers line their own pockets with a way of life some of us could only ever dream of, as they spend millions by awarding themselves generous perks. Not there for the little people. British taxpayers fork out millions each year on diplomats’ lavish perks.
In short we are by ourselves. It is only through the work of people like you that we will have any chance of salvation.
@Road Warrior – If you want the FCO (and hence the High Commission) to take a more assertive approach in dealing with the situation and for HMG to offer more assistance to British nationals, you will need to petition their UK political masters in Westminster as it is they who make such decisions and formulate strategies.
The Secretary of State for Foreign and Commonwealth Affairs is William Hague, who can be contacted via the Foreign and Commonwealth Office at private.officegsi@fco.gsi.gov.uk or via the House of Commons at william.hague.mp@parliament.uk
He also has a Facebook account at https://www.facebook.com/williamjhague and a Twitter account at https://twitter.com/WilliamJHague
Someone else you may wish to contact is Sir Simon Fraser, Head of the Diplomatic Service (he’s the Permanent Under-Secretary of the Foreign and Commonwealth Office). He has a Twitter account at https://twitter.com/simonfraserFCO . And you’ll probably reach him at fcocorrespondence@fco.gov.uk
Alan, we can’t change the system, it can only be changed, in my opinion, when the property industry collapses completely. In Cyprus, as I’m sure you know it’s crisis management, its the same with their holiday industry,they will muddle along until the whole thing collapses and they are forced to act. All we can do is to tell people the truth, site the pitfalls and yes, issue a strongly worded statement against buying, the dishonest and corrupt system has been accommodated for far too long and we owe it to future potential victims to, at last, dispense with the meaningless platitudes and sympathetic noises and tell it like it is.
@Road Warrior. Emotionally I would not disagree with your suggested wording for a stronger BHC warning. Great for publicity and media attention but to put this out would almost certainly be regarded by the Cyprus government as interference in its sovereign affairs and an action likely to damage or undermine its economy. Apart from provoking some kind of retaliation, it is highly unlikely to achieve what we all want. However horrible the Cyprus Property Scandal is for its victims, I regret that it does not rate highly as a threat to the long-term interests of HMG -it is not a strategic threat so will not be treated as such.
I come back to the question I raised. Apart from necessarily keeping the pot boiling on the publicity and chivvying fronts, what IS the strategy for cleaning up the Cyprus Property Scandal and achieving radical change so that it cannot recur?? How do you suggest that the conspirators are to be terrified into doing it or to be removed from the picture??
I can understand people’s anger and frustration at the injustice and lack of help from the BHC, but we really need to take a wider view to see exactly where WE, the British Property Investor/ Homeowner sits on the food chain.
In terms of actual injustice, what’s worse: having a few thousand of your citizens lose their life savings through ill – advised foreign property investment OR having 98 miles of your country’s territory permanently stolen from you?
Which again is the greater injustice: our plight or having some of your citizens, who were actually born in their BRITISH homeland, forcibly evicted from their homes and deported 1000s of miles away, in order to make way for an American air force base? With no compensation, no redress (I’m referring to Diego Garcia, not Cyprus!)
All historic, you may say? Well, EXACTLY the same thing is happening with Ascension Island, as we speak.
Without wishing to lecture on British history, WE ARE NOT THE GOOD GUYS. Far from it, actually. We are the extremely practical guys who are perfectly willing to undergo ‘acceptable losses’, what the Americans term ‘collateral damage’, for the greater long – term good. The Cypriot rusfetti KNOW this (as they’ve had first hand experience of this themselves) and thus have even LIED to our House of Commons promising a white paper (end 2008, hence the Foreign Office statements Jan 2009), knowing we’ll do ABSOLUTELY NOTHING (unless the SBAs are threatened). Do you remember Lord North and what he was proposing (full page adverts in the press advising against purchasing property in Cyprus, a ban on all Cyprus property advertising in the UK, plus other more radical stuff)? We don’t hear any more from him now, do we?
So, in summary, the BHC is doing what it can to maintain the British interests abroad that best serve the British state. WE are no more than acceptable loss.
Nothing against Matthew as he and his team take a far greater interest than the previous incumbent of the post, Peter something if I remember correctly and useless to boot. No information nor warnings on the BHC site under his control, just do not buy in the North.
I did a Freedom of Information Act request some years ago regarding property complaints in Cyprus and was informed that no records were kept.
What gets my goat is the glib statement do your research. The real news can only come from victims speaking up about the scams to warn others yet there is no help for them. Matthew and his team are well aware of the scams and the usual culprits involved but only thanks to victims. They are left to rot.
Sorry Nigel but when did the warning you speak of appear? If memory serves not that long ago and far too late for many.
I like many others are fed up with platitudes.
People need help NOW before the corrupt bankers come knocking.
Yes Nigel, I have read it, for me it’s about as useful as their list of lawyers, it’s way beyond time to step up and tell it like it is, apologists for the impotence of the BHC annoy me as much as the corrupt developers, the duplicitous solicitors and the corrupt judiciary and legal system.
@Road Warrior – Have you read the advice on the FCO website? It says:
“The British High Commission advises potential purchasers to exercise extreme caution when buying a property if the title deeds are not readily available, as to do so means that your property could be at risk.”
@ Alan Waring : “In view of the present situation in Cyprus regarding the tardy issuing of title deeds and the very serious situation regarding Non Performing Loans, the British High Commission advise all British subjects against buying property in Cyprus until further notice, this decision will be reviewed on monthly basis until further notice “. Would be a step in the right direction.
@All. Happy New Year!
Victims have every right to react with indignation and anger at the limitations of what BHC can do. However, it is unrealistic to expect them to do much more than Matthew Kidd has already done (at least in modern day terms of diplomacy). Even the UK Parliamentary All-Party Committee for protecting the interests of British citizens caught up in the Cyprus Property Scandal has, thus far, not achieved much. Then there is CPAG and all those individual MPs and MEPs who have been chivvying away at the Cyprus government, the previous President, the EU Commission, the EU Parliament etc who also have got no tangible result overall.
The net product of all these efforts may be summed up as : publicizing the problem, keeping it in the public eye, warning off potential new buyers and trying to exert pressure on the Cyprus government and co-conspirators (developers, banks etc) through international embarrassment and damage to Cyprus’s image and reputation as a safe place for inward investment of any kind.
All of that is necessary and positive in the overall strategy to secure a resolution of the Cyprus Property Scandal and preventing it happening again. However, as THE strategy I’m afraid it is unlikely to be successful. As SoOJB and others have noted, the cronyism, nepotism, corruption and other ingrained cultural characteristics that, until now, have served the various vested interests so well will not be given up voluntarily just because of the adverse publicity and a desire to resurrect the Cyprus property corpse. Even the Troika’s gun against their heads is reportedly regarded as a temporary nuisance, which soon will disappear so they can all revert to ‘dodgy business as usual’.
Someone posted recently on this site a comment to the effect that a high degree of sociopathic behaviour is evident in how the conspirators continue their evil without conscience, remorse or empathy. Such persons are immune to straightforward rational, moral or self-interest persuasion unless the adverse consequences for them are so horrendous. Whereas a normal person may respond quickly to self-interest, a sociopath always thinks he can get away with his monstrous behaviour. For the result we all want, the various conspirators therefore need to be either terrified into radical change or removed from the equation.
I don’t have a clue how realistically to either terrify them or remove them. Do we just wait for SoOJB’s ‘Russian’ scenario to catalyze it all? If not, then what??
So much being said with which I’d totally agree. Opinions seem to be converging towards a certain point (i.e. this aint no accident, Cyprus wont change anything unless forced, BHC are absolutely powerless as they have greater issues re Cyprus than our life LIFE SAVINGS, which they REALLY DO! and asking the EU to police corruption is like asking Dr Evil to police Mini Me!). Even if our plight were actually on the EU agenda, their only possible sanction would be what exactly? Not give Cyprus any more money (so it crashes out of the Eurozone causing the dreaded default contagion and hastening the demise of the doomed currency for the 3rd time? I don’t think so!)
To be fair to the BHC, I think it was way back in Jan 2009 that they issued the starkest warning they’re allowed to, which was that we should exercise ‘extreme caution’ when buying property here. Yet people still bought.
So, if gunboats are the only way change will happen, how do we bring da boom?
Luckily, the awfully clever people who’ve devised this whole scheme are absolutely pants at playing the geo – political game. One rather interesting poster was mentioning aping the Ukraine and borrowing huge amounts from Russia in exchange for Russian fleet berthing rights at Limassol, plus further quid pro quos. I can assure you these discussions are already being had at the top level. I can also assure you 100% THAT THIS IS THE ONLY THING that’ll get the US and our gunboats rolling in (again). NOTHING ELSE WILL.
We have to just hope and pray the clever Cyprus establishment get so strapped for cash that they resort to the Russian option (even though they’ll probably just try to use it as a bargaining tool).
In the meantime, we can up the ante on the Cyprus state’s finances by NOT FEEDING THE BEAR (I.e. don’t give ’em a penny more!). Don’t pay ANY property ransoms, irrespective of promises of deeds (with certain caveats, of course). If we can mobilise ourselves as an effective, un – blackmail able force, we may just push the country into the arms of the Russians and with it will (may?) come our (Viking gunboat) salvation.
He says…
I have to agree that Cyprus will do absolutely nothing to resolve the title deed issue and the banks, thanks to the corrupt developers and lawyers, will come knocking for what they consider to be their money.
AK47 or JCB anyone?
Alan, Nigel
I totally understand how the political game is played and how indeed the FCO has to operate when on foreign soil. However, to quote Al Capone  ‘You can get more with a kind word and a gun, than you can with just a kind word.’ The current British Government could exert a lot more pressure on the Cypriot authorities than it currently is doing however it chooses not to.
It’s all very sad, the Cyprus property industry is in meltdown, corrupt developers assisted by duplicitous solicitors and amoral banking practices have resulted in a situation where now people actually face losing their homes, through no fault of their own. Many of these victims are British and, spectating on the sidelines the BHC stand by and wring their hands in the manner of Uriah Heep yet offer no practical help.
Whilst we are all aware that they can’t intervene directly, we have always been hopeful that there would be, at the very least, a strongly worded statement advising against buying property in Cyprus, but no, the BHC continue to sit on the fence and observe while peoples lives are turned upside down, indeed some have been driven to suicide over this tragic situation.
I often wonder just what is the purpose of the British High Commission, anyone know ?
Nigel, Peter, Alan & others.
Matthew Kidd is doing a particular job which by definition means that he does his best within the constraints of his role. And that’s that.
I too have met him and for an hour sounded off at the injustices and sleights that I felt had been flung my way and backed it up with documentary evidence. However, I wasn’t naive enough to realize for one moment that Kiddo could wave his magic wand and cow the Cypriot authorities into submission.
Gone are days when the likes of Disraeli sent a gunboat to bludgeon a wayward state into submission. Having said that, the only ‘medicine’ that Cyprus understands and would understand would be a whack on the head as resorting to reason and persuasion have failed miserably – and not just over the past year or so but decades.
The troika are the only route to any possible form of salvation and even then it might be limited. If they fluff it and are restrained by wider EU politics, then all will indeed be lost. Make no mistake, Cyprus is a rogue state and from where I’m standing, it has absolutely no intention of changing its corrupt course.
Wouldn’t it be lovely if nice words could effectively resolve a scandal?
Unfortunately over the years, I have seen absolutely nothing of any practical use emanating from the BHC in Cyprus to help wronged and swindled British purchasers of Cypriot property. (Other than the Lawyer List)
Maybe if the Foreign Office had taken out a full page advert in the Times and other UK newspapers warning of the obvious pitfalls of purchasing property in Cyprus, we may have seen the Cypriot Government taking some action to move their covert support for the corrupt and unscrupulous more towards protecting honest and innocent British / EU Consumers who have purchased property in Cyprus.
Or maybe we would have seen many less British victims of the scandal and heartache that, even today, still exists in the Cypriot property market
@Peter Davis and CPP. I appreciate your frustration but British diplomats (and indeed those of just about every other nation) are just not allowed to ‘cross the line’ – even though I am sure many of them would just love to tell a few home truths to host governments. Look what happens when a host government perceives (accurately or not) that a foreign ambassador is ‘breaking the rules’: Downer the UN high representative to Cyprus, for example, gets mightily kicked around on a regular basis.
@Peter Davis – The FCO can advise, assist, inform, and offer support to the Cyprus Government. But it cannot interfere, intervene or tell it what to do. That’s why it’s good that the EU is now involved because the EU has the power to get things changed for the better.
Perhaps you would prefer it if we sent our diplomats to the Ian Paisley academy of tact & diplomacy and issued them with Kalashnikov AK47s?
@ Alan
Sorry but I couldn’t disagree with you more. The Greek Cypriots only understand a gunboat mentality. Anything else is wasted.
Diplomacy and Cypriot is like oil and water mixing. It can be done but only under pressure.
His Excellency The British High Commissioner to Cyprus has a nice job, secure, good pension, so why rock the boat for the little people? The British Government has made it know a long time ago that it has no interest in supporting its own people.
We are by ourselves. In the North there was talk about raising a fund to fight to keep their houses, maybe the same is needed in the South?
I would agree with Suzanna completely as diplomats will never commit to an answer in full. We only have to look at most of the single sentence answers to see that skilled practice in motion!
It will be interesting to hear the proposals that the Committee will put forward in the next few months on how Cyprus can achieve the targets it has agreed with the Troika. I fear that unsuspecting property owners will always bear the brunt of any outcome.
A well put together interview summary. @Suzanna, I think to be fair to Matthew Kidd his responses to the questions reflect the diplomatic protocols and strictures that any such person is under. Diplomacy relies a lot on subtlety and persuasion and not the blunt and sometimes insulting turn-of-phrase that the rest of us may use from time to time to gain attention and hopefully goad the targets of our displeasure into action. I certainly plead guilty on that score!
The Ministerial Committee referred to by Mr Kidd, which has an in-built mechanism for input and advice from UK experience, is a big step forward and a recognition by the Cyprus government not only that something must be done but also that it needs some help to do it.
Ever the Diplomat!! I have met Matthew Kidd and he is a charming man but as he openly admitted he is a Diplomat and whilst I am sure he tries at the many meetings he attends, he is not likely to tell us and I very much doubt that he is listened to.