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Who is parliament trying to protect?

We have to ask the question who is the Cyprus parliament trying to protect following the decision of the House Finance Committee not to put the ‘hidden mortgages’ bill before a plenary meeting of the House.

Who is parliament trying to protect?THE DECISION of the House Finance Committee not to put the ‘hidden mortgage’ bill to a plenary meeting of the house before the summer parliamentary recess has been slammed by Interior Minister Socratis Hasikos.

The bill, which was submitted by the government in June, is designed to resolve the situation where those who have bought property are unable to get its Title Deed because the land on which their property was built was mortgaged by the developer who is unable or unwilling to settle the debt, or the transfer has been blocked because the developer owes taxes to the state.

But despite MPs agreeing that these trapped home buyers should be protected, the House Finance Committee decided not to put the bill before parliament for a vote before the summer recess; the delayed ‘hidden mortgage’ bill will now be debated and voted on at an extraordinary plenary session of parliament to be held on 3rd September.

The ‘hidden mortgage’ bill enables the buyer or the seller of the property (who has deposited the relevant contract of sale at the Land Registry), the mortgagee of the property, the lender under the loan agreement with the buyer, the director of a committee to be established by the cabinet, to request the transfer of a property to its purchaser.

The Director of the Land Registry will then review the transfer request and may request evidence enabling him to decide whether the request is legitimate. If the ‘trapped buyer’ has not paid the full sale price, the Director will invite them to deposit the balance of the purchase price into a special account.

(The actual evidence that may be requested and the procedure for opening a special account to hold any remaining sale price is to be established by the cabinet.)

If a person does not comply with this request for evidence within a specified period, the Director may impose a fine on them of up to €10,000 and a further €100/day until the requested evidence is supplied. But before imposing a fine the Director will advise them of the reason for imposing a fine and request that they make representations to him within 30 days.

Interested persons – the buyer, seller or mortgagee, and those with encumbrances and prohibitions may complain to the Director in cases where (a) The buyer/seller have not completely fulfilled their contractual obligations or (b) the contract of sale between the buyer and seller is invalid.

Assuming all goes well, the Director will invite the buyer to pay the Property Transfer Fees within 30 days. If the buyer fails to pay the Property Transfer Fees within 5 days after the 30 days, the Director will transfer the property into the name of the buyer and will lodge an encumbrance against the ‘new’ title for twice the Property Transfer Fees – or if the purchase is the subject of a loan, the lender may pay the transfer fees.

‘Hidden mortgages’ may be transferred to other property owned by the seller or guarantors. (I understand that the Association of Cyprus Banks objects to this claiming that it will cost the banks €1 billion.)

Readers' comments

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  • houlou says:

    Just 30 mins ago I asked Mr Syllouris on live RIK radio if parliament had delayed voting of the law in an attempt to amend the bill and protect the banks! He answered no, and I should not be so suspicious…..then the usual ping pong saying that Hasikos had submitted bill to parliament too late in the day and they needed time to study it as it was complicated! blah blah he will also be waiting to see if the bill will be tailored indeed to help trapped buyers or help banks…when asked by the presenter about the fact that it is a precondition of the troika that the vote the legislation in Sept…..he said yes just recently.

    I fail to see the complication to be honest……

  • houlou says:

    I agree with previous post 100%, write to all MPs as they tend to have the habit of blaming each other or the govt for the delay, and in particular the finance committee who were responsible for the delay on voting the bill as law….

  • Jjames says:

    It strikes me that this is the closest we’ve come yet to the Cypriots actually complying with demands to do the decent thing and help buyers caught up in this mess.

    Yet it could so easily be allowed to slip away if pressure is not kept up.

    If you are not already doing so, I urge all commentators here (many of whom I assume to be buyers/owners) to bring this present situation to the attention of anyone who is currently burying their head or not being proactive and encourage them to watch, wait and to act if this bill falters in any way come September.

    We need to act together.

  • houlou says:

    @Mike, yup we all know who they are protecting, but then again again you have the likes of EDEK MP Nicos Nicolaides who insists parliament is trying to protect buyers…proof is in the pudding though….as mentioned on a different post the Mps will delay and delay as far as possible until there is real punishment for non complying….by delaying and not voting in the release of trapped buyers law ,Mps risk tying up buyers trapped by developers into the developers NPLs and thus the new fast track reposessions-quite uncharted waters for Cypriot banks—-nobody knows how it will end……

    Ο Βουλευτής ΚΣ ΕΔΕΚ Νίκος Νικολαΐδης είπε ότι έχουν λεχθεί «πάρα πολλά γι αυτή την αναπομπή και για τις δήθεν προθέσεις της Βουλής να προστατεύσει τους μεγαλοϊδιοκτήτες». Πρέπει να πω ότι «ουδέν αναληθέστερο από τούτο». Διαβεβαίωσε ότι «η Βουλή σε καμιά περίπτωση δεν πρόκειται ν` αφήσει εκτεθειμένους τους εγκλωβισμένους ιδιοκτήτες περιουσιών στον κίνδυνο εκποίησης».

  • Mike says:

    I would have thought that on past recent history the answer to “who is the Cyprus parliament trying to protect” is painfully obvious to anyone even remotely associated with the shenanigens of the self serving kleptocracy.

  • @Who Gives on 2015/07/17 at 3:04 pm – It’s too early to say what the law will look like in its final form. Amendments will probably be tabled when the bill is discussed in September.

    I have no further details at this time regarding Property Transfer Fees and timescale to issue the deeds. But I guess that the process from application to issue of deeds will take in the region of 3 months assuming there are no objections that need further investigation.

  • Deanna says:

    Excellent summary, thank you Nigel.

  • Who Gives says:

    @ Nigel thanks for the clarification so in a nut shell what you are stating is if this bill is finally passed as law subject to a property being paid in full and the contract of Sale lodged at the Land Registry Office they should not be any dispute from the Developer.

    1- What about the transfer fees will this be at 50% of the original sale price of the property.

    2- How long will the process to receive the title deeds once approved granted by the Director of LRO.

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