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MP defends hidden mortgages delay

hidden mortgages delay

Green Party MP, Giorgos Perdikis

INTERIOR Minister Socratis Hasikos had a point when he slammed parliament for not passing a government bill designed to protect house buyers without title deeds, but he was not entirely right, an MP said on Saturday.

Green party MP Giorgos Perdikis was commenting on a scathing statement released by the minister on Friday, berating MPs for not passing the bill the previous day, the last parliamentary session before the summer break.

The bill, submitted by the government late in June, was meant to sort out the mess created by the failure to provide title deeds to people who had paid for their properties, either because it was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

“Whom is parliament trying to protect? Trapped buyers of mortgaged real estate, or the banks,” Hasikos said.

Perdikis said he agreed, the legislation should have been passed on Thursday, but one reason it wasn’t was the government dumping a host of other bills on parliament, with a request that they be passed before the break.

The bills, which include tax breaks and other incentives to attract foreign investment, had been announced just days earlier.

“If they had wanted the (title deeds) bill expedited they should have asked,” Perdikis told the Sunday Mail, adding that they had not done so.

Developers’ land and buildings are counted as assets that need to be offset against their debt to banks, giving lenders a claim on people’s properties that had been mortgaged by developers.

Thousands have been left without deeds as a result.

The bill grants the head of the Land Registry department the authority to exempt, eliminate, transfer, and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

The director will have the power to transfer mortgages to other property belonging to the vendor. If no such property is available, the director can transfer the encumbrances on individuals who guaranteed the seller’s obligations.

Banks, which are expected to take a hit, had expressed opposition to the bill.

Perdikis said the postponement had been decided by the House Finance and Interior Committees during discussion of the matter at the end of June in a bid to give MPs more time to study the matter.

Hasikos had disagreed with the decision and asked parliament to vote on the bill before the break.

MPs voted instead to extend the exemption of such properties until the end of the year. The previous date was July 10.

At first glance there did not appear that anything suspicious was afoot but Perdikis did not rule out attempts in the autumn to accommodate bank objections.

Editor’s comment

The explanation given by Giorgos Perdikis contradicts an earlier report on Tuesday July 7, which said that the House had no time to examine the ‘hidden mortgages’ bill due to the summer vacation. The bill was delayed by a decision of the House Finance Committee (of which Giorgos Perdikis is a member.)

I understand that the Association of Cyprus Banks is claiming that the ‘hidden mortgages’ bill will cost the banks €1 billion.