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“The problem is huge” says director

No-one knows precisely how many properties that are burdened with a developer’s mortgage have been sold to unsuspecting buyers, but the problem is huge says the Director of the Department of Lands and Surveys.

Huge problemEVIDENTLY tens of thousands of mortgaged properties have been sold to unsuspecting buyers by property developers, some of whom are currently unable to service their loans.

In efforts to identify the size of the problem the Phileleftheros has been trying to obtain information from the banks and the Department of Lands and Surveys, but without success.

While the banks have records relating to each of their customers, there is no centralised database and an official from one of the banks said that the bank would “make arrangements to have this information in the near future.”

The Director of the Department of Lands and Surveys, Andreas Sokratous, said that no-one knows exactly how many of these double-mortgage cases there are, but it is in the tens of thousands.

The director noted that while some of the double-mortgaged properties are burdened with other encumbrances, such as memos for unpaid taxes, there are many cases where contracts of sale have not been deposited at the Land Registries for Specific Performance.

“The problem is huge” said Mr Sokratous and added that it is unclear what should be done in cases where a purchaser is repaying their bank loan, but their developer is not repaying his loans.

Readers' comments

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  • Aggis Demetriou says:

    What a nice mess!
    My development loans don’t even show up on my land title deeds.
    Strange but true.

  • Charles Stevens says:

    “The problem is huge” said Mr Sokratous and added that it is unclear what should be done

    It may be unclear to the culprits who do not wish to face up to the consequences of their actions and omissions. To everyone else is it not very clear indeed that there is only 1 very simple solution that must be implemented immediately? The Banks who double mortgaged properties must refund with interest all money paid by the innocent parties under the legitimate expectation they were acquiring title after buying an apartment but who in reality bought nothing as there was no title that could pass on completion. Monies advanced by the banks to developers from escrow accounts must be debited to the developers mortgage for which the bank has security. If the banks and or developers do not pay the Cyprus government must be forced to compensate the victims.

  • Ian says:

    @Clive. I’d love to think that the Troika ‘tune in’ to topics like this on Nigel’s website.

    Surely 1001 Dalmatians (disaffected buyers) can’t all be wrong, There is realism here……..and you (the Troika) want to give this lot more money to carry on their selfish ways

    Bah Humbug

  • Costas Apacket says:

    No wonder Socrates Hasikos reneged on his promises to discount Title Deed Transfer Taxes by up to 50% in late 2014 and then again in February 2015.

    Just imagine the stink of bad publicity that would have prevailed when people rushed to pay for their Title Deeds only to be told they couldn’t have them after all due to the artfulness and deceit practices by the troika comprising Developers, Banks and Lawyers.

    Let’s hope they all end up getting tangled in the web of deceit they have woven.

  • Pippa says:

    There appears to be no will in the government to sort out the Title deeds problem. They are just playing lip service to the problem. Can the Troika, or anyone grasp the problem, and even parachute in knowledgeable persons and take over. We cannot go on in this fashion. Cyprus is the laughing stock of the EU, please someone HELP!!

  • Costas AFortune says:

    There are thousand of Brits attempting to prove how dishonest the Cypriot banks, developers, and Lawyers were regarding mortgage fraud etc . Yet some people just come out now and say the problem is huge !!! What a joke ! This place is a corrupt cesspit and please do not be fooled into putting any money into this terrible place .

  • Steve says:

    @ Richard

    You asked for input on the reasons for the events of last week. On a global scale the issues of unfair selling practices in Cyprus are not important, which is why the British government, the Cyprus government and the European Commission will make the right sympathetic political noises whilst doing absolutely nothing, just as has happened with British expats and their frozen state pensions.

    On the other hand, the issues surrounding British relations with Cyprus are quite another matter. Cyprus was annexed by the British when Turkey, the previous occupier, joined forces with the Germans in WW 2. Now the Cypriot closet communists like Christofias and his AKEL brigade believe they will be better off cosying up to the Russians and giving them a naval base in Cyprus than they will be relying on the EU. Anyone with friends in the Ukraine will be able to enlighten you on how dangerous that can be.

    William Hague is doing his job.

  • Deanna says:

    @Nigel: my oversight (how could I!); yes of course, the third angle of the Tricky Triangle ie the lawyers.
    Thank you.

  • andyp says:

    I wrote directly to John Hourican (CEO Bank of Cyprus) about these debts back in December 2013. I think both Nigel and Cyprus Mail published a copy.

    No reply has ever been received.

    In my opinion there are four co conspirators of this fraud; Banks, Government, Developers and Lawyers.

    Unlikely to happen, but they should all be held accountable and equally responsible for these debts and title deeds should be released without burden or further delay to innocent buyers.

  • Richard says:

    My second post (I hope) is not seen as (too) off topic here, but I think the real elephant in the room is the simple fact that the lives and fortunes of ordinary people appear not to matter any longer. Statute & government administration seems to be so excessively tilted now towards the super-well off – that we all have grown weary.

    When that list leaked out a while ago of all the major debtors (believed to have been leaked by a disgruntled Russian investor) – it was pretty shocking – but we all thought – well, now the cat’s out of the bag at least.

    But what then happened with the BRITISH government? Enter William Hague (a man I’ve never had much time for and for whom his whole career has had more than a few dodgy episodes – including this last week). What does he do? Signs over valuable British sovereign military land to Cyprus! This action may result in some of the worst debtors borrowing even more money to speculate on even more investment. What concessions did he obtain for ordinary Britons caught up in the great off-plan Cypriot property scam in return for handing over the land? If he did ANYTHING for ANY of us – it’s NOT apparent to ME. Anyone got any input on this?

    So – this to me is the root of the problem. We ordinary joe-public don’t count. We are not important in critical fiscal decisions and we are not important in the debt problem being fairly and correctly assessed.

    Why are we putting up with it?

    WHY?

  • Whirlybird2 says:

    “The problem is huge” said Mr Sokratous and added that it is unclear what should be done in cases where a purchaser is repaying their bank loan, but their developer is not repaying his loans.

    Would it not solve some of the problem if the government seize/prosecute the developers at faults assets including the ones that have been carefully salting away, prior to their knowingly defaulting. These people are swanning around in their Mercedes and large homes with their assets well hidden within the family circle. Let them suffer the same as the ones they have robbed, swindled. Call it what you want, its there, and they are being protected!!

  • Richard says:

    I’m obviously with many of the comments here – but many of the worst debtors are tied up hand-in-glove with the worst and most corrupt people and practices of the Republic’s government & banks. That in turn is most likely tied in with the worst excesses of E.U corruption.

    That’s why there is no central database (and even if there is one – all the scumbags who architected this unholy mess will want it keeping as far away from Joe Public as possible – for obvious reasons).

    Two facts are VERY clear though: 1) All of this needs continual dragging into the light & exposing 100% for what it is and 2) we all need to fight for the appropriate justice and resolution for ordinary people sucked into the great Cyprus off-plan property scam.

    Doesn’t matter if purchasers paid in full in cash – bought using a € loan or a CHF loan – we are ALL in this TOGETHER.

  • jjames says:

    The official quoted above will know, as we all do, that nothing of any use in sorting this mess is going to be offered “in the near future” because it is not in the interest of the main culprits.

    What about each bank listing issue dates of mortgages/loans to developers, along with those to purchasers, and compare. If that’s too much trouble send information to reputable third party with the right motivation to compare and collate. Either way, “Bob’s your uncle”, you will have a centralised database.

    I guess this would be the easy bit but there seems to be an unwillingness to even achieve this! This could have been in existence years ago. Who are they trying to kid?

  • @Deanna on 2015/03/28 at 12:54 pm – You forgot to mention the third party – the lawyers who failed to protect the interests of their property buying clients because they were (a) corrupt (b) negligent or (c) ignorant.

  • Deanna says:

    @Clive Fletcher: what you say is the quickest and fairest method of dealing with this ‘huge’ problem.

    There are two ‘parties’ who are liable here; the banks for lending without due diligence, and the developers for double-dealing with their customers.

  • CZ says:

    Absolutely agree with Clive and Stnicolas, I am sick of hearing excuses from the banks and government officials. It is absolutely unacceptable that the banks have knowingly given innocent buyers loans on top of developer loans that currently can’t be decoupled to obtain deeds and the ability to sell.

    As a minimum I think the banks should give private home borrowers the option to walk away with no debt and be forced to sort their self made mess out directly with the developers with all the powers at their disposal.

  • UBoat says:

    @clive
    this has been suggested before quite a while ago in the early days of this coming to light.

    They will never do this as it immediately cuts off the power of the developer who loses the land and the title and the ability to borrow more money on it. The banks would then kiss goodbye to the developers ever paying money back and the fact they would not even be able to seize the property you and I own outright.

    So this unfortunately will never happen. But it really needs to so the slate is clean and the country can start afresh with the right laws in place.

    They knew all this years ago but when your making money on all fronts and living like kings its hard to do the right thing……..

  • Steve says:

    Clive Fletcher has a point. The whole debate is centred around the two mortgage issue. What about the buyers who have paid off their mortgage and those who paid the price in cash and never took out a mortgage?

    Maybe one reason why so little progress is made on a whole raft of issues in Cyprus is that so many are interested in fixing THEIR problem, not the problem as a whole.

  • Campbell Findlay says:

    Don’t tell me they have JUST realized there is a huge problem!

  • Steve R says:

    We all know the problem is huge but what is the solution ???

  • clive fletcher says:

    How about de-coupling innocent purchasers who have paid in full from the crooked developers and equally crooked banks, issue the title deeds – Cyprus government immediately gets cash injection from transfer taxes and IPT and leave the equally crooked legal system to sort out their internal mess by confiscation of developers assets wherever they are hidden and banks fined for gross mis-management.

  • Stnicolas says:

    Simples! Just give us back the money that was wrongfully extracted from us!, how can any bank sanction a loan on a property that has a developers mortgage attached to it, had we known we certainly would not have entertained buying a property that had an existing loan on the land! Who would.

  • scruffy says:

    Lets not kid ourselves. They had gotten the message long ago, it was just that no one had the b++ls to admit it and come up with a solution.

  • Frank says:

    “The problem is huge!” The solution would surely be to untie the Gordian Knot. Neoklis Sylikiotis; where are you?

  • Andrew says:

    Oh wow, they have finally got the message!!

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