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Cyprus ‘failed miserably’ on Title Deeds

Interior Minister Socratis Hasikos has admitted that Cyprus has failed miserably over the Title Deed issue and pledged that his ministry will do everything in its power to sort out the matter.

Cyprus Title Deed protestTHE STATE – government and parliament – has failed miserably over the Title Deeds issue, Interior Minister Socratis Hasikos said yesterday, as Cyprus scrambled to clear a backlog of more than 23,000 applications before the end of the year.

Speaking before the House Watchdog Committee, Hasikos said proof that the state had failed miserably were the thousands of pending applications that must be cleared by the end of the year under pressure from the island’s international lenders.

“There was no need for a third party, the lenders, to force us,” the minister said.

Clearing the Title Deeds backlog is part of the island’s bailout terms. Cyprus must cut down the number to around 2,000 by the end of the year.

Hasikos pledged that his ministry would do everything in its power to sort out the matter, stressing that a radical review of the procedures was necessary.

He warned that failure to do so could put the economy at risk since there was a possibility of the lenders withholding the next tranche of assistance.

But “we cannot intervene in private organisations like banks,” he said. “However, since it is for the common benefit, especially for the economy, we feel that they will also be serious and responsible and co-operate in issuing a title.”

Watchdog committee chairman said there were 23,417 pending Title Deed applications at the end of 2013 and an additional 4,500 by May this year.

Deputy Giorgos Georgiou said sorting out the problem would mean a windfall for the state. In the past two and a half years, the state has collected around €156 million from transfer fees.

“This alone arms us with more will to provide solutions, provide proposals to stamp out a bad phenomenon, which has been stifling the state’s revenue collection ability,” Georgiou said.

EDEK MP Phidias Sarikas highlighted the bad publicity Cyprus received in recent years because of the matter.

“There are thousands of foreign buyers and compatriots who have been inconvenienced for years while trying to acquire an ownership title,” he said.

He added that it was very bad for Cyprus when foreign buyers and potential investors were trapped in lengthy procedures.

Readers' comments

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  • MartynG says:

    I reckon we all know several reasons why the Cyprus Government ducked out of this Minefield!!

    Radical changes – haven’t seen any elsewhere except merging one bankrupt bank with another not far from it and little if any Action on NPLs. The Mediterranean approach meshes with some nefarious North African practices to induce complacency all round. It takes a Generation, + a half! To change ingrained cultural malpractices, presently Cyprus government are merely approaching the ‘starting blocks’ and many of it’s members are still facing anyway other than towards the future. Ne’er mind the sun still shines, MedGas beckons (we think, hope) the Desalination plants are now ‘operating’ and the taxes for ex-pat pensioners are as favourable as most anywhere.

    Just sad, really sad, for those still strung up in the Title Deed fiascos.

  • GermanSixth says:

    With and in the present system, nothing can be done and nothing will be solved.

    A real reform would imply:
    If the contract is legal (the seller is the legal owner of the property) and the buyer has paid “in full”, than the property has to be transferred. Period.

    The division of plots is part of the construction permit. If the contract conforms with the permit, than nothing more has to be done. The land registry can demand that the purchaser pays / has paid property transfer tax, before the buyer gets the title deeds. But outstanding taxes (chargeable to the seller) have nothing to do with a land registry. Further, the final approval of a building (conformity with the permit) is a separate task.

    Unfortunately, the mortgage problem cannot be addressed by a land registry. This is a legal problem, at the expense of the seller (of course!)

  • @aggis demetriou – on 2014/07/06 at 5:57 pm – Do you think outsourcing the inspections to suitably qualified and licensed engineers would solve the problem? With perhaps the Land Registry inspectors sampling (say) 1 in 20 to ensure standards were being maintained?

  • aggis demetriou says:

    As an honest property developer, I agree with what Pils says below.

    I would never build a shed let alone a property here again, I advise people not to buy any property here in Cyprus without title.

    From experience it takes at least 7 years to get a final approval certificate for a small development of a dozen houses, and can be a lot longer if the new buyers have made changes to their properties, once you get the final approval it can take a further 3 years to get separate titles.

    Unless the government adopts the English way of having the councils building inspectors on site inspecting a property as its being built nothing will change, this will guarantee a safe building and a final approval certificate at the end of completion.

  • @Martin Bean on 2014/07/04 at 9:38 am – The procedure for issuing Title Deeds could get underway as soon as all the necessary permits and permissions have been granted have been granted for the property’s construction. This happens elsewhere, why not in Cyprus?

  • Martin Bean says:

    I note that the Minister mentioned a radical review of procedures in this article.

    In the unlikely event that happens, the opportunity should be taken to remove the optional nature of applying for Title Deeds that exists now. When a property is completed and paid for, the procedures for issuing a separate title should be started automatically then and there. The owner of the land, be it private or a developer, should be forced into handing over ownership of the land and what stands on it in a very short space of time.

    The nonsense that happens now, waiting for a development to be completely finished before it can be sub-divided, only to find out years after purchase that the developer has taken loans afterwards and that other debts, or memos, have been lodged against their property should be made illegal once and for all.

    However, I think that would be far too radical for Cyprus.

  • Stuart says:

    Deputy Georgiou has certainly got his priorities right hasn’t he? Never mind the thousands of buyers waiting year after year for their Title Deeds, think about the windfall the state is going to receive if it clears all these pending applications before the end of the year!

    So what will happen if the Cyprus authorities fail to meet their obligation to reduce the backlog to around 2000 by year end? Already the total has been reduced to some 28,000 not just by moving the Troika goal posts but by changing the MoU stadium as we’ve already seen.

    No need to worry, Mr Hasikos, your Troika friends are under instruction from the EU to prevent Cyprus leaving the club under any circumstances whatsoever, so the tranches of assistance will continue unabated. Just relax and continue with your customary progress as comprehensively described by Nigel below.

  • Pippa says:

    Why do I get the feeling that as far as the Troika is concerned as long as Cyprus plays lip service to the title deed fiasco they will be satisfied? As KC says there are so many thousands of us that have no hope of owning what we have paid for in full until the situation concerning NPLs, developers mortgages etc. are sorted out. We will still be in the same position years down the line, Cyprus will have had all the EU money and we will still be stuffed!!!

  • KC says:

    Luckily someone thought to move the goalposts otherwise there would be 123,000 outstanding title deeds.

    What about buyers who cannot even submit an application for title deeds because of encumbrances/infringements on their property through no fault of their own?

    I, for example, cannot get on the first rung of the ladder because my developer has overbuilt the house by more than 30% without my knowledge, and has mortgage and income tax debts none of which I am responsible for.

    I hope that the troika will turn their attention to this matter again and make the issue of title deeds to all fully paid up buyers, part of the bail out terms otherwise the Cypriot property market and the economy in general will continue to suffer.

  • Mike says:

    How very predictable.

    “There was no need for a third party, the lenders, to force us,” the minister said. Forgive me but if the third party had not insisted, albeit fruitlessly, then certainly nothing at all would have been mentioned about the debacle let alone done.

    Empty promises, terminological inexactitudes (lies to you and me) and unadulterated rhetoric once again. But at least the sun is shining!

  • Peter Davis says:

    @ jon

    When I questioned why my transfer of deeds was several thousands euros more than the contract price (of 2002) I was informed that the Paphos Office had been instructed to use the 2007 price of homes and villa which was the height of the price boom.

    So don’t hold your breath.

    Interestingly it’s only the British buyer who pays the increase the Cypriot developer keeps the old price for tax purposes.

  • @All – yet more vacuous statements? Here’s progress to date:

    In October 2005 the Cyprus Mail published an article ‘New Rights Planned for House Buyers’. This claimed that the Cyprus Government was going to plug loopholes in the law, introduce fines, and provide property buyers what it called ‘an arsenal of weapons against unscrupulous property developers’ such as Korfi Mountain Estates.

    What has the Government of Cyprus done to implement these eagerly anticipated ‘new rights’? ABSOLUTELY NOTHING!

    In October 2006 I took part in a round table discussion on the subject of Title Deeds. The discussion was broadcast live on the Cyprus Broadcasting Corporation’s second radio channel. During the discussion the MP for Limassol, Rikkos Erotokritou, (now Deputy Attorney General) stated that the “House of Representatives are worrying a lot about the situation”. (If you want to listen to the whole discussion, click here).

    The Government, according to Rikkos Erotokritou, has been ‘worrying a lot about the situation’ since 2006, but what has it done? ABSOLUTELY NOTHING!

    In September 2007 the Cyprus Mail published another article ‘Law Reform Hopes to clear up Title Deeds Trap’. This claimed that the Government was looking to provide greater security to homebuyers by enabling their Contracts of Sale to take precedence over the developers mortgages.

    What has the Government of Cyprus done to implement these ‘law reforms’? You guessed it, apart from messing with the periphery in 2011, ABSOLUTELY NOTHING!

    In January 2008 the Cyprus Property Action Group delivered a report ‘Cyprus Property Pitfalls – a time for action‘ (which I helped to write) by hand to the then Finance Minister Michalis Sarris. The report was written at Dr Sarris’ request following a meeting with him a couple of months earlier – see Property buyers upbeat after Sarris meeting

    What has the Government of Cyprus done to implement any of the suggestions/recommendations contained in the report? You guessed it, ABSOLUTELY NOTHING!

    Together with the nefarious developers, lawyers, estate agents and bankers – successive governments of this island have succeeded in destroying the once thriving property market and wrecked its image.

  • jon frazer says:

    A helpful land registry official told us this morning that the Cypriot news last night carried an item saying that the transfer tax may be reduced by 50%, and suggested that as we’d waited a decade for deeds, why not wait a bit longer and hopefully pay less in transfer taxes(!) She also confidentially gave us the new 2014 value of the property, but cautioned that this is provisional. It is higher than we could reasonably expect to get at the moment.

    BTW, we and our dog feature in the picture, which was taken at the last CPAG demo- royalties, Nigel?!

  • Andrew says:

    Will Interior Minister Socratis Hasikos ensure that title deeds are issued and transferred to buyers.

    There remains a great injustice when title deeds are “issued” yet withheld due to unpaid DEVELOPER DEBT.

  • pils says:

    All false promises on title deeds, again Cyprus cannot deliver on title deeds.

    Promises promises and more promises, Cyprus are excellent giving out information but unable to act on their conviction in a proper and professional direction.

    Cyprus will never change direction and my advice never invest or buy property in Cyprus.

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