GOOD governance is paramount to a healthy economy. This week I include land registries, planning departments, building inspectors, mayors and councillors to last week’s list of dishonest and greedy developers in cahoots with bent lawyers, bankers and politicians – miscreants all. The administration is rotten to the core
On-going investigations into land registry misdealing are only the tip of the Cyprus property scam iceberg. The ‘big meltdown’ is finally underway.
Bad governance was of little consequence years back, when land and building costs were relatively cheap and ‘foreign’ interest minimal.
Parents scrimped and saved to build homes to marry off their daughters; bank loans rarely came into play. Then ‘Charlie’ money arrived from the colonies, land prices soared and the indigenes became rich on the backs of emigrant relatives, who chose to build homes here for their dotage. Add to that northern Europeans seeking a place in the sun, and the construction industry boomed from 1976 until 2008.
During the boom, bad governance became ‘an industry’, sweeping up in its wake honest government employees – join us or stay quiet, oppose us and be denied promotion.
By the time the financial crisis finally hit Cyprus, the entire administration was under the control of ‘the property scammers’. And we know who they are; it’s just a matter of ‘disinfecting their books’ with a fine tooth comb for our courts and hospitals to overflow with the vermin that brought this country to its knees.
Like cockroaches, certain developers ‘scavenged’, and ‘under the cover of darkness’, swamped mayors and land registry employees with bribes; ‘Green Belt’ became building land unchecked and buildings were built that should never have been. Cracks appeared in those buildings that shouldn’t have had building inspectors been permitted to do their jobs properly.
Most buildings were not constructed to plan, but the relevant government department failed to notice until the occupant (usually an ex-pat) chose to sell. And when he/she did, he/she learnt during an unsolicited visit from a building inspector that the house ‘did not conform’ to plan – ‘subtle’ delaying tactics aimed at perpetuating developer sales.
Occupants were obliged to employ architects, submit new plans and wait (sometimes years) upon the planning department’s good offices. In the meantime, many occupants discovered that the developer had mortgaged the land on which their property was built, and the sale of property on that land would be held in limbo until the developer had repaid the mortgage.
Such a vicious circle of deceit drove many occupants to take anti-depressants, consume excessive amounts of alcohol and finally, litigate pointlessly before throwing in the towel – unforeseen knock-out blows delivered by a manipulated administration in cahoots with corrupt developers, bankers and lawyers led many to wish they’d never set foot on our shores.
Certain politicians ate from the same developer bowl, becoming accessories to the fact; for a fistful of euros they sat by and watched as the economy and construction industry sank inextricably.
So many certificates are required ahead of selling a house in the UK that purchasers sleep easy in the certain knowledge that their home will not collapse from dry rot, that the foundations are sound and the walls are insulated and properly damp proofed, that the electrical wiring conforms to EU standards and the roof structure will withstand a force eight gale. Detailed searches are performed at land registries by solicitors, who are held responsible for declaring rightful ownership ahead of exchange of contract between vendor and purchaser.
None of the above applies here, yet! But it’s gonna’ come. That’s for sure!
Our construction industry will be dragged out of the dark ages and be made to conform. Until 2012 we only sought purchasers. Today, the number of vendors greatly exceeds that of purchasers, and the entire property scam, which relied on an unbroken run of purchasers for its existence, has collapsed.
We are now faced with the first law of economics – supply and demand. There is gross oversupply and little demand. And we all know what that means. The administration will invent yet more ruses to delay the sale of private property for the sake of crooked developers, whose unsold housing stock now exceeds that which they sold sub-standard and illegally.
Add foreclosures/repossessions forced by banks from January 2015, and ‘half’ the island will be up for sale by the end of next year – and surprise, surprise – the same foreclosures legislation applies to Greece! Banks both there and here, indifferent to present or future legislation, whatever it is, are already sending out foreclosure/repossession letters to thousands of hopelessly indebted householders.
On paper, the hopelessly indebted have already lost their homes and no amount of populist political interference will save them…
The troika have stuck a foot in the door of our banks, and this time, the door will remain open.
Six billion euros of NPLs are owed by our developers to banks, and if you think for a moment that Aristo Developers would have been investigated had the troika not been in charge here, you are mistaken.
Who is next in line for investigation? We pay for our sins in this life, not the next! Unfortunately, our children will also have to pay for those who brought the country down. But rather than glorify them as eternal heroes, they will refer to them as vermin.
Well spoken Hermes.
I am one of those ”Charlies”, unfortunately. Albeit, I delivered a well placed British punch on the chin of someone who dared call me Charlie. He did not need a second one.
I am now homeless and jobless at 57 after 30 years in the UK where I built a successful life, business, house, dog, cat, etc.
In Church, the priests sing the “wealthy became poor and starved, but those who seek our Lord will not miss any material good.”
I now understand that it is sank here in Cyprus for the “Charlies” because the Church knows that exactly that will happen to anyone stupid, like myself, to come back here.
“Then ‘Charlie’ money arrived from the colonies”
Hahahah they liked the money from the Charlies but they despised the Charlies….and despised how Charlies had big cars and big houses abroad and holiday homes on the island, got this treatment in Larnaca one day trust me….I think greed and envy is what has destroyed the Cypriot values of old…..lock em all up throw away the keys AND confiscate and distribute their ill gotten gains to the truly needy…..
Hermes,
Your article was spoilt by the “flowery” language and “overly-aggressive” adjectives you use. Nevertheless you make some excellent points, perhaps in your next article about our housing mess, you could be a bit more specific about what needs to be done in terms of legislation and regulation without leaning on the Troika, who are after all simply the lenders accountants.
What we need to do is to bring in some industry experts from outside Cyprus to carry out a review and make proposals that will work for us without destroying our economy, fragile that it is. In the end, their proposals should could to a public referendum and not rely solely on the political class for their implementation. The property issues in Cyprus are so severe that there is little that is more important for voters to consider.
It is a fact that many of the government departments, developers, lawyers, used car sales salesmen and the like believe that they are doing nothing wrong. Like the African cultures that the Cypriots mirror so closely, if you don’t maximise your income by using your position in industry, commerce, the civil service, and so on, you are fool and, worse, you are neglecting the opportunity to provide your family with the best life you can.
Some years ago, I went to town planning in Paphos with a copy of a planning permission and a drawing made by the developer, the one currently suffering from a rush of blood of sorts. Town Planning told me that the developer had not applied for planning permission for his serious deviations from plan, but it was built now so who cares? When I said that I did, they pointed out that if I were to object in writing, the whole development of apartment blocks would never get title deeds. I became a Cypriot and kept my mouth shut.
Well said sir!! Sadly there are few Cypriots in high places who would take any notice of your so-true comments. Until the people of Cyprus get rid of the culture of ‘every man (?) for himself’, nothing will change. All we hear is complaints because gold-plated pensions (non-contributory of course) are to be taxed, so the Government backs down, huge payouts to those made redundant, non-payment of taxes, mortgages, loans. And these are probably the decent, law-abiding people!!
When you go to a doctor or dentist, how often do you get a receipt for monies paid? We recently paid an Architect 750 Euros and, guess what, no receipt…..There’s us silly Brits gagging to hand over the money for our Title Deeds, but guess what? The Developer won’t complete the site, so no completion certificate, no title deeds.
We have heard about most of the bad news how about looking for the good news I think the country has heard all the gloom and doom it needs to hear. Let the legal beagles do there job and get back to building this beautiful country.
We have now had a charge put on our U.K. property by the Alpha Bank for three times [ster] our original loan from them [CHF]. We were given just 10 days to either represent ourselves, in Cyprus or instruct a lawyer, neither of which we could afford.
When the original summons was received 2011 we paid a Cy barrister via a Spanish solicitor nearly £800 to find some defence but to no avail. The crafty Alpha Bank rescinded our approved application via P.O.A. and re-drew the paperwork to include the developer as guarantor, for us to sign, whilst we were in the Island to take delivery of the property. Our developer informed us by e-mail it would be done by the time we would arrive. We have now lost our home and the Alpha Bank have still not got their money.
“In the meantime, many occupants discovered that the developer had mortgaged the land on which their property was built, and the sale of property on that land would be held in limbo until the developer had repaid the mortgage”.
These occupants could also be pressured into paying the developers’ mortgage, if the developer is declared bankrupt. However Banks will not tell hoodwinked buyers what the developer owes until they come knocking at your door. That outstanding debt, with years of compound interest, could then be so high as to be impossible to repay. Resulting in innocent buyers being evicted from their homes.
We need more outspoken people like Mr. Solomon, because onlookers often fail to realise the severity of this situation in Cyprus.
An excellent piece, succinctly detailing the scams that we’ve all been exposed to in relation to our properties.
I have personal experience re greenbelt being built on. At the back of my property (one of a terrace of ten cottages finished in 1990, in Paralimni). The developer told us ‘this is Government land, will never be built on…’ And on our plans, it is marked as ‘Government Land’.
As a collective, we tended that green space, seeded lawns, planted shrubs; it was a nice place to be.
We saw-off one developer in the mid-nineties. But in 2006 another one ‘acquired’ the land; now there are 4 ‘villas’ on it – only one sold. I now have the windows of the nearest one overlooking my back patio. The only thing left from our lovely park is the olive tree which my late husband planted in the early ’90s; I suppose I should be grateful for that.
Complaints to the Planning office were met with the Cypriot shrug ‘the rules have changed’.
Yeah, right.
Comment regarding the first law of economics being ‘supply and demand’ inspired me to reflect on the happenings currently on the outskirts of Protaras, towards Ayia Napa. The area is engulfed with all types of properties for sale or lease; completed, yet deserted developments of high quality properties and a number of hideous, half completed developments and houses. A great majority of residents in the area have been and still are waiting for title deeds despite deadlines agreed under the governance of troika, many for a period approaching 20 years.
Why on earth therefore, is a well known and long established local developer being allowed to go ahead with yet another new development, (Milos) in the same area? This only adds salt to the wounds of local residents, living only metres away from the development who purchased their properties from the same developer and still await title deeds.
Do troika really understand the dilemma of the man in the street through having the wool pulled over their eyes by our so called administration?
Surely ‘Alice’ witnessed more openness and honesty, conveying enthusiasm that inspired her to pursue the rest of her journey at the ‘Mad Hatters Tea Party’!
Yes – Who is next in line for investigation?
Mike Kelly
The wisdom of Hermes Solomon could not be expressed better than in this article in which he describes a really significant fact which is that the Troika has stuck its foot in the doors of the banks and this time the doors will remain open.
The tip of the Cyprus property scam iceberg has indeed started to melt and although it may take a considerable time for the rest below the surface to follow, meltdown is now inevitable as feet start getting held to the fire.
A succinct piece of reporting which sadly will change nothing but only because of the interests of those at high level either through their interests outside parliament of within their families. A necessary piece of journalism but I would be very wary for your safety and well being.
Thank you for your honesty and ethics. The sooner those outside of the self interested clique begin to investigate the better for all of us and the nation as a whole.
If Mr Soloman would like to take over the presidential role i am sure he could get some action taken to sort out many of the issues we have here.
The reality is that it takes real action eg. how long would it take to get the idiot in charge of the Paphos land registry to explain why he is preventing the collection of much needed taxes by refusing to accept a British passport. The challenge is to find someone in authority that would not support him by accepting and agreeing with his senseless actions!
Keep trying Hermes, Cyprus does need you.
Thank you for confirming the beliefs of most expats who were fooled to invest in Cyprus. It is really bad to trust a system that is even worse than the so called ‘Banana Republic’s system’.
I spent 10 years trying to get my title deeds but all in vain, tried all approaches but nothing is working, I feel trapped by the system and bad governance.
A well written and honest article, but what effect will it have as we all know this trail of events has been going on for years and years and the ‘me me’ culture is endemic in all the politicians and ‘civil’ servants here.
As someone who needs the title deeds, only 7 years after paying in full for the property, so we can sell, I can see no way that the current situation will change in my lifetime.
Brave Man, Mr. Solomon. And Well Done for detailing the depths of corruption that many of us have suspected had been going on. Watch your back though else, the Good Lord forbid, you might end up in a different – and I suspect less comfortable – hospital ward as the ones who suddenly become ‘ill’ when confronted with their crimes and corruption.
Thank you for adding the essential detail behind some of the things that have been ‘going on’, going on for far too long!
All true. And yet we have European Enforcements Orders working their way through the High Court in London for the benefit of Alpha Bank. To get any type of justice in the courts in Cyprus when they are ‘all in on it’ is the biggest scam of all.
And what doe the UK do about it? Nothing at all apart from lip service from useless MPs and MEPs. EEOs are a God send to Cyprus in this situation.
@mh on 2014/09/28 at 6:34 pm – A European Enforcement Order only applies to uncontested claims and are available in all EU member states (not just Cyprus).
They only occur in cases where a debtor fails to file a defence in the country where the case was first heard. Failing to defend results in an uncontested claim, which can then be automatically enforced in another EU Member State. See European enforcement order for uncontested claims.
I published an article more two years ago warning of this issue – see Do not ignore Cypriot bank writs for loan non-payment, from one of the firms acting on behalf of those alleging the mis-selling of Swiss Franc loans.
All I can say is that it essential that those receiving a writ or termination notice from the bank to defend the action – either in person or through a decent lawyer. Failing to do so could result in them creating more problems for themselves – including the possibility of losing their homes to repay their debts.
We all know every single word in this article is correct, but to see Mr. Solomon actually spelling it out is simply incredible. I have personally never seen the like of it in print anywhere in Cyprus. Whether it will be the precursor of any future change, well, we will simply have to wait and see.
If International Accounting Standards were applied to Cypriot banks, many of them would immediately be declared insolvent. For how many years will they continue to perpetuate the lie that they are not bust? By giving a false picture of their solvency situation and encouraging new property buyers to invest, they are blatantly fraudulent in their behaviour.