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More help for trapped buyers

Further help for trapped buyers is provided by a Ministerial decree enabling Certificates of Approval to be issued for residential properties that fail to comply with the permits issued for their construction.

Further help for trapped buyers

Cyprus Interior Minister Socrates Hasikos

A FURTHER bottleneck preventing the issuance of Title Deeds has been removed by a decree issued by the Interior Minister on 3rd June that allows planning irregularities to be excused enabling Certificates of Approval to be issued.

The decree applies to residential developments and related projects that were substantially completed by 31st December 2014 and whose individual residential units can be enjoyed. The decree will enable Title Deeds to be issued for the properties concerned; a prerequisite for applications under the provisions of the ‘trapped buyers‘ law to be processed.

The 41 page Memorandum of Understanding (MoU) agreed between Cyprus and its troika of international lenders in January this year called for:

“the Minister of Interior will issue ministerial decree by mid-December 2015 that defines an exhaustive list of what constitutes unauthorized works, with retroactive effect covering also all past pending cases, ensuring that the rest of deviations will not prevent the certification process”

The decree enables the relevant authorities to issue certificates of unauthorised works for such things as failure to complete the construction of roads, pavements, green areas.

The full text of the ministerial decree (in Greek) is available at Διαταγμα Υπουργειο Εσωτερικων. (The decree may be translated using Google translate.)

I expect that in cases where a certificate for unauthorised works has been issued, a Title Deed with notes will be issued preventing the property’s sale or voluntary transfer.

Readers' comments

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  • embapaphos says:

    @aggis, have to agree with you, the state had a major role to play in the mess by turning a blind eye whilst the going was good, and this attempt is a means to making up for it. Hopefully going forward there will be more regulation and control in the early stages of the whole process so as to nip things in the bud before they are out of control.

    It is unheard of for example in the uk to start any works without the required permits. If my memory serves me correctly during the addition of even a tiny kitchen extension to our home there were regular visits by an inspector who immediately got the builder to knock down a partially finished wall as it was 15cm off plan spec, and he did and started again……I know this is Cyprus many will say but it is common sense to build what you have shown on approved plans and not build even before plans are approved and worse still sell properties on that violate all sorts of regulations……Seems in Cyprus they like to boast about how Cyprus has taken a lot on regarding rule of law , land registry organization, taxation etc from the days of British rule, but they threw in a bit of Cypriot flavour for good measure , and the mix is toxic, especially to those who have seen how things works elsewhere . @Nigel awaiting keenly on updates regarding the deeds and tainted deeds situation for trapped buyers.

    (Ed: When I built my house in Erimi, my architect would not start the construction work until the building permit had been approved. The land was cleared in preparation – but no construction work.

    In Cyprus it’s the supervising architect who is responsible for ensuring construction work is carried out according to building regulations and the various permits/permissions. Independent inspections (as in the UK) only occur when the property’s been finished.)

  • Who Gives says:

    Nigel
    As follow up you comments please can you elaborate

    1) Not sure why they would need a special sitting to make as decision on planning permission approval.
    2) My lawyer opinion was that he considered that under the new laws that title deeds could be realistic target by end of 2016.
    2b) Based on your time line it is likely to be more 5 years to be in a position to obtain title deeds. That if planning permission approval
    3) On back taxes who going to pay them from 2007-2015?
    4) How about the IPT from 2013 -2015 who going to pay the taxes
    5) The sell of this property was part of exchange of which IPT, Sewerage taxes was settled by me.

    (Ed: I sat on a Planning Committee when I was a local councillor in the UK. Applications were referred to us if they involved a Councillor and for other applications where the Planning Officer was in two minds about whether to approve. I don’t believe there’s a similar arrangement in Cyprus.

    I expect that your contract of sale obligates you pay property-related taxes from when you accepted delivery of the property.

    If you sell the property you will have to pay any property-related taxes.)

  • Who Gives says:

    Nigel further to your comments if the Sale & Purchase agreement was submitted as part of the orginal purchase submission from previous owner in 2007 whould that change my own situation. Other questions please

    1- How frequent does the Planning Permission Committee sit as been more than 8 months since verbal approval from local planning office?
    2- If planning permission is granted can proceed to submit for COA
    3- If back taxes are due will they still be accountable under new law.
    4- Under the new laws what is the expected time line to receive title deeds.
    5- If the project was not 100% completed will there be exemptions on the deeds?

    (Ed: As far as I am aware, there isn’t a Planning Permission Committee. Decisions are taken by the planning officers – I imagine that some applications will be referred to senior planning officers for a decision. There are urban planning committees that look at the wider planning issues in their area.

    Once Town Planning Permission has been granted, the next step is to apply for building permit(s).

    In the past it has typically taken 6-9 months to get a Town Planning Permit and up to 18 months to get Building Permits.

    The the building(s), etc. have to be inspected by the Municipality/District Office/Town Planning Department to ensure they comply with the permissions/permits authorised for their construction. This can take between 6 and 18 months before a Certificate of Approval is issued.

    Depending on the development a Division Permit may be required – this can take 6 months.

    Then it can take a further 12 – 30 months for the deeds to be issued.

    Any back taxes will need to be paid.

    As for your final question I am waiting for a translation of the Minister’s decree.)

  • Aggis Demetriou says:

    Again too little too late, at least titles will be issued even with cautions, and transfer fees collected, at the end of the day the governments to blame in allowing the land registry to carry out sales without final approvals.

  • embapaphos says:

    Been reading anxiously all the posts and developments, and it all boils down to the same thing, having deeds in your name with notes on them that prevent you from selling on or remortgaging, or not having deeds in your name in which case your are totally empty handed….if the infringements preventing clean deeds are at a reasonable cost to overcome I would be happy to cough up if it means clean title deeds. Seems though that many alas have larger costly problems, again asking the buyers to sue the developer to fix what he should have delivered cleanly, is not fair either.

    (Ed: As I’ve replied to earlier comments, I am waiting for a English translation of the Minister’s decree – so I can say precisely how this should operate.)

  • Corinne says:

    Sorry, only just opened your newsletter and realise I am miles behind everyone else. What happens if you don’t have children, near relatives? There doesn’t seem to be any point in getting our Cyprus wills sorted as it looks like the Cyprus government will take the lot. What a Pandora’s Box!

    (Ed: As I’ve replied to earlier questions, I am waiting for a English translation of the Minister’s decree – so I can say precisely how this should operate.)

  • Corinne says:

    Dear Nigel

    We were overjoyed to read that this decree has been issued as our Certificate of Approval has been blocked by unspecified problems with the green area and lack of construction of a small and isolated stretch of tarmac road. However I was a bit baffled by the last sentence: are you/ they saying that if we get a deed with notes, it means we will not be able to sell or transfer our house? Surely not!

    Assuming the above needs just a tad more explanation and we continue with the application (!), is it better to check with the relevant offices that all taxes have been paid, or wait for the LO to contact us further down the line? I was just thinking of trying to get everything into place if at all possible.

    Thank you so much for all your helpful information, particularly useful when we were still in the UK.

    (Ed: As I’ve replied to earlier questions, I am waiting for a English translation of the Minister’s decree – so I can say precisely how this should operate. You should wait for the Lands Office to contact you.)

  • Dave D. says:

    Nigel,
    I really am a bit confused now, we applied for our Title Deeds last Oct.(As advised) As in a previous post some time ago I mentioned to you our Developer has wipe his hands of the Est. leaving it totally unfinished.In the eleven years we have been here several houses have been sold/ transferred (at a cost I might add) Would I now be right in thinking, if we proceed with our application and do indeed receive our Deeds, not only would we never be able to sell the property ( the Est. will never be finished, it would cost TENS of thousands of Euros) but by obtaining the Deeds it would indeed put a stop to ANYONE in the future being able to sell/transfer their property ( as is the case at this moment )….If this is the case I would think anyone proceeding with there application for Title Deeds would have to be quite mad and I for one will be off to the Land Reg. Office to cancel our application forthwith ! I really do not see any point in anyone going ahead with there application if by doing so it WILL bring to an end the transferring ( selling of there property ) CONFUSED….I am ? ?…By the way when we mentioned to our lawyer about the prospect of suing our Developer, he smiled and said you do realise you are in Cyprus ….I hope you have very deep pockets !

    (Ed: I am waiting for a English translation of the Minister’s decree – so I can say precisely how this should operate.)

  • Who Gives says:

    Nigel
    Thanks for the continue efforts with providing advice to trapped buyers. Please can you clarify some points.

    1) Recently purchased a property on small development of 8 properties that planning permission has been submitted in August 2015.

    2b) According to my lawyer the planning permission has been verbally approved by the local planning office but the planning permission needs to be approved by PP committee special sitting?

    2) The build up of the property was not as per architect plan so the original planning permission was rejected

    3) The developer did not complete the roads, pavements, perimeter walls, landscaping green space.

    My lawyer highlighted that the new Law may provide some weightage but the law is to assist trapped buyers on larger developments.

    Pls can you confirm the competent authority shall issue a certificate of unauthorized works in my situation:

    (Ed: I can’t say what will happen in your case as the law only if the contract of sale to purchase the property was deposited at the Land Registry by 31st December 2014.)

  • CPP says:

    Perhaps I’m missing something here so can you please tell me why the government doesn’t make the developers that are still in business, complete existing projects that are unfinished.

    (Ed: There isn’t a law requiring developers to complete projects. And I imagine such a law would be very difficult/impossible to draft and even more difficult to get through parliament. To be effective the law would need to specify a time-scale for completion and penalties for non-compliance.)

  • embapaphos says:

    General consensus by those who I speak to is at least you will have deeds in your name….for those whose properties are complete but had their developer vanish and/or go bust and owe the state and banks monies to get deeds this is no small thing…(in the ‘old days’ such buyers would have been asked to pay all this or else no deeds)

    But getting tainted deeds to a property makes property very much worthless in essence, and especially unfair if it will cost an arm and leg to make deeds clean again….suing the developers is like flogging dead horse in most cases. I know first hand that the debt for assets push by banks is fast making banks estate agencies, they are ending up with lots of land and properties or defaulted developers!

    Like many have said here you pay for a property not to inherit a property with problems due to the developers wrongdoings and be expected to remedy them or else no clean deeds.

  • Scruffy says:

    Thank you Nigel for your continued efforts. Any clarification of this decree would be most welcome. As to who will pay for completion of works, I think the government needs to acknowledge that they also had a part to play in this mess by failing to enforce appropriate checks and failing to enforce existing building laws at the time.

    I noted that in the translation so far there is reference to “the competent authority taking steps to protect citizens and things such as markings etc” and also a reference to “the competent authority ensuring completion of remaining works”.

    Perhaps this is how things will pan out eventually. The municipalities finish things off then demand payment for such works in return for “clean deeds”.

    Another irony is that I’m surrounded by Cypriot properties who have never, ever had pavements or roads either and can’t understand what the fuss is about.

  • Pippa says:

    Thank you as always for the information and help you continue to give. I am only very sorry that we did not have any knowledge of your site before we signed our contract 10 years ago, then perhaps we would not be in the position that we are, of no title deeds, being unable to sell and move back to UK, and unfortunately it looks like we will be on this blighted island forever.

  • Scruffy says:

    Hi Nigel

    I do find the statement that “at least you can still pass on the property to your children” patronising. It implies I should be grateful that I still have a house (regardless that it is potentially financially worthless as no one can sell it) but WILL be in my name. Who would wish to inherit such a burden in a foreign country?

    What about my right, as someone who thought he had quite legally bought a house, to dispose of it how I please as happens in any other EU country.

    I am well aware that in other countries that if a property has not been built to plan, the same problems would arise re permits and certificates etc, but unless there is clarification on who and in what circumstances this decree will affect individuals, then I still feel we could end up more trapped than we are now by accepting tainted deeds.

    I have to say also, that the notion that we can all club together to complete a development then sue the developer for the money is also dubious advice when you consider that most of the unfinished developments are so, because the developer went bankrupt or simply disappeared.

    This decree will almost certainly speed up the issuance of title deeds in a big way. The irony for me is that receiving tainted deeds could create many more problems than it solves for many innocent individuals.

    (Ed: I have sent the decree to a friend and asked if they can translate it – but I expect it will take a few days.

    There are cases where people who bought property from a developer who subsequently went bust have clubbed together to pay for the construction of roads and pavements. I totally agree that this situation isn’t good but if the developer is bust who is going to pay for the work to be completed?)

  • Andrew says:

    When the decree is translated and published maybe some sort of common sense will prevail.

    It is unfair unjust and probably illegal to expect an individual to remedy the shortcomings of a system that was always unfit for purpose.

    Why should homeowners who have already paid in full be somehow expected to pay again and then sue their developer. Some commentators have already hinted that this could be a very costly exercise.

    Many people trapped do not have unlimited financial resources. Most do however have a limited ability to cope with the anxiety caused by this fiasco.

    Notwithstanding, it is essential that pavements are completed. There has to be some uneven, cracked place, for the weeds to grow and for cars to be parked.

    Living the dream indeed!

    (Ed: I have asked a friend if they can translate the decree, but I expect it will take a few days. I have been sent an English translation of the consolidated Streets and Buildings Law – but the decree has yet to be included.)

  • embapaphos says:

    @Nigel appreciate all the help and feedback, “The Certificate of Unauthorised work is only issued for the units affected” right so lets say your project consists of 6 properties and all have separate deeds now (via trapped law) but 3 have problem due to the border that is adjacent to neighbouring plot…is it safe to say that only the 3 properties will have the issue? and will each of the owners of the 3 properties be responsible for say resolving the issue with the border only for their property? in this case the border issue is a ‘common’ wall that all 3 properties have that borders neighbour.

    (Ed: I cannot say how the decree will be implemented in specific cases – but in principle, only those whose units are affected will have a problem.)

  • Steve says:

    I am thinking that this decree is an indication of the large number of properties in contravention of building permits or planning permission. When you add to these the others with contraventions where the surveyors overlooked contraventions and issued the final approval anyway (as in my case), you have to wonder how it can ever be stopped.

    (Ed: The problem is the woeful lack of law enforcement. E.g. Article 10 of the Streets and Buildings Regulation Law, Cap 96 provides that no-one can occupy a building unless it has been issued with a Certificate of Final Approval.

    If the authorities were serious about enforcing the law the perpetrators would be fined or jailed – perhaps both.

    I recall a case when I was on a Planning Committee in the UK. A local council instructed a house owner to knock down an illegally built wall or they would send someone to do the job and charge him.)

  • I need to get the decree translated properly to clarify the contentious issue of a ‘Certificate of Unauthorised Works’. Here’s what the translation engines provide:

    5. For transactions in infrastructure and are described below:

    (A) non-road construction (including all road works);
    (B) non-manufacturing pavement / pedestrian / square etc.;
    (C) non-configuration / landscaping green space;

    the competent authority shall issue a certificate of unauthorized works:

    It is understood that, for a project consisting of several units / pieces, where comfortable and independent enjoyment and good access secured, the competent authority shall issue a certificate in accordance with the provisions of Article 10B of the Law:

    Provided further that the competent authority shall immediately set all necessary preventative measures for the safety of citizens (eg appropriate marking, protection of wells, etc.) And the completion of the remaining works.

    (Article 10B of the law refers to the issue a certificate of approval with notes, which does not prevent the sale of the property.

    Article 10C of the law refers to the issue of a Certificate of Unauthorized Work.)

  • Pippa says:

    Let me get this straight- is it correct that if

    1 – full price has been paid for property
    2 – it was to be a small development of 8 properties
    3 – that only 3 houses have been built two being sold to Cypriot families, the remaining plots are empty.
    4 – there is a road but no pavements
    5 – no further building has taken place for the last 4 years and it is unlikely to ever start again.

    Then we have no hope of ever having clean title deeds and selling the property? We are then condemned to stay on the island until we depart in a box?

    (Ed: Please read my latest comment – I need to get the decree properly translated.)

  • Mike says:

    I believe this the first step in the process for eventual issue of ‘clean title deeds.

    Sadly unscrupulous developers have built with a cavalier attitude to the law so, as anywhere else in the world, it is they who need to be taken to task in order to either be forced to legalise their illegal construction or pay for the legalising of each illegal property. Not easy or cheap I know but applications for costs could compensate.

    As for not being permitted to sell I believe that is the right decision as the property is not a legal construction, to permit the sale would fly in the face of those who have ensured they have complied with all planing, permit and construction requirements and have consequently been issued with clean title.

    Not what most would want to hear I suspect but developers, builders and lawyers need to be bought before the courts and sued by a competent lawyer as in any other area of illegality.

  • scruffy says:

    Hi Nigel,

    if as you say that the “Certificate of Unauthorised Work” is only applicable to the units affected and not to the whole development”, then that WILL probably help many more to receive “clean deeds”.(including me) However, I have asked this question to both our Liquidator and the LR staff and have never received a convincing answer. The Liquidator has always insisted that it was irrelevant that the project I am in had three phases and my phase was completed (ie, road, green areas etc, and insisted that to ever have deeds, we would all have to pay for a missing road in the second phase, which did not even exist when I bought. LR replied to the same question with a blank stare and a shrug of the shoulders.

    You ask how do I know it would cost thousands? Simply, because they have told us so.

    I have always tried to stay positive and be patient but I have to say that I fail to see how this is a step forward.

    To say that “at least you will have deeds and can pass the property onto children etc” I find patronising. Perhaps you can elaborate on the “etc” as I am struggling to think of what else one can do with a property that would be financially worthless.

    Please believe me that I don’t mean to “shoot the messenger” but I truly do not comprehend how this can be construed as good news. many people must be gutted by this.

    (Ed: As the degree was only announced three days ago, the LR staff and liquidator may be unaware – and it doesn’t come into force until it’s been published in the Gazette.

    I believe the ‘etc’ is the transfer to a relative up to third degree – but you’ll need to check; the law is complex.

    Why do you believe that the ability to pass the property on to your children is patronising?)

  • Joanne arnold says:

    Will this still apply to people who do not have separate titles yet. What about whether the developer is in liquidation. Will this have any bearing?

    (Ed: If you do not have a Title Deed you should apply for it as described in Applying for Title Deeds. I makes no difference if the developer is in liquidation – anyone without Title Deeds may apply.)

  • embapaphos says:

    @Nigel, thanks for the update, I am curious as to how separate lets call them ‘tainted’ deeds have been issued to properties on our plot, prior to the Ministerial decree mentioned above.

    I am still waiting for deeds in my name via the trapped law process but deeds in developers name were issued in April (via the trapped buyers law) ….land reg person I spoke to said these will come with notes due to planning infringement (and yes you cant sell or re-mortgage etc) BUT general consensus is that having separate deeds in your own name is paramount…take it a step at a time and you can look at remedying the infringement and getting clean deeds later on they told me…

    Also the onus is on buyer to remedy problems, once they have deeds they ‘own’ planning problem too, how strict authorities will be in dealing with such buyers and enforcing the law remains to be seen. I suppose too the above change in the matters depends on the extent of the planning / building violation whether some people will be better off, but I can’t see how having title albeit tainted is better than not having the property registered in your name, not so long ago such buyers alas had not chance in hell to own deeds without coughing up to pay all the developers shortcomings.

    Also got to agree with Scruffy that the authorities should not lump together a whole estate and class all properties on it as being for for dirty deeds, I read the guide and don’t see it as fair for example that if one part of the estate for example has borders that infringe a neighbours plot, why this should taint all deeds of properties on the plot rather that those only with the problem. Then again it is a way to share the burden when it comes to remedying the issue, but what does one do when you are on a plot of 10 homes and only 2 have been sold to 2 buyers and you have to cough up to fix a massive infringement to get clean deeds. Quite tricky.

    (Ed: As I replied to Scruffy The Certificate of Unauthorised work is only issued for the units affected – not the whole development. I can’t say how tainted deeds have been issued for the properties on your plot – but there is a Cypriot chap in Nicosia with the same problem.

    As for correcting any infringements, you will need to sue the developer for the costs incurred.)

  • Scruffy says:

    To entitle this article as “More Help For Trapped Buyers” is in my opinion tantamount to a sick joke. Given that we have been advised thus far that it is imperative to apply for our deeds, we are now informed that to do so can result in denying us the right to sell or transfer our property unless we are able to pay thousands to remedy planning issues. There have been 5 properties sold/transferred around me in the last 8 months with no deeds and yet now, after patiently waiting, I can now find that HAVING deeds would only farther trap me in a property that would now be illegal to sell/transfer.

    You say that this is what you expect will happen. Do you have reasonable grounds for this expectation? If this is true, then only a fool would continue with their application for deeds.

    If it were the case that the Planning Dept only looked at an individual property many may have a chance of being issued with “clean deeds” but they do not. They lump together whole estates. This will leave thousands even more trapped than before. With this in mind I respectfully suggest you change the title of this article.

    (Ed: Only a fool would not want to get the Title Deeds to the property they purchased. How do you know it’s going to cost thousands to remedy planning issues? Do you know what the planning issues are?

    As I said in an earlier reply, the situation isn’t ideal but you can leave the to your children, etc. in your Will.

    My reasonable grounds for this expectation are contained in Immovable Property (Tenure, Registration and Valuation) (Amended) Law 2011 – If the Building Authority issues a certificate of approval with notes or a certificate of unauthorised works, the updated title may be issued with notes recording the irregularities or prohibiting the transfer of the property to another person. A note or a prohibition may be cancelled at a later stage, provided that the irregularities in the building are legalised or removed.

    The Certificate of Unauthorised work is only issued fot the units affected – not the whole development.)

  • Gary says:

    Thanks Ed. So in summary, if the original planning permission stated you need to build a pavement then you need to build the pavement if you want to sell your house in the future.

    (Ed: To get a clean Title Deed the conditions contained in the various permits issued for a property’s construction need to be satisfied. You’d face similar problems in the UK if a development wasn’t completed.)

  • Pippa says:

    Like Celia I am a little confused. Will there be full clean title deeds issued to a property (allowing it to be sold) if there are no unauthorised works to the property, but the development is not complete, that is to say no pavements, some properties not built or completed, and no green area? We have applied under the trapped owners bill, and asked for our house to be divided from the main development, but 7 months down the line have heard nothing.

    (Ed: a Certificate of Unauthorised Works is issued when there are planning issues – the decree enables properties developments where roads etc. have not been completed to be issued with Title Deeds – further details can be found in the decree. Previously these properties would not be issued with Title Deeds until the planning issues had been resolved. The Title Deed will probably have a note attached, but this can be removed when whatever problem is caused e Unauthorised Words certificate to be issued has been corrected.)

  • Celia says:

    So does that mean we will get our deeds without encumbrances even though the road isn’t constructed. Is it only property with unauthorised work done to them that will have notes on the deeds.

    (Ed: The Certificate of Unauthorised Works is only issued for the properties affected. If your property is affected by the lack of a road your deed will not have encumbrances but a note prohibiting its sale until the road has been constructed.)

  • Gary says:

    With regard to the last paragraph, are you stating this new decree is not beneficial then? That the Title Deeds issued would be next to useless?

    (Ed: I agree that this is not an ideal solution, but you will secure undisputed ownership of the property. Although you may be unable to sell it you can leave it to your children, etc.

    The Certificates of Unauthorised Works will be removed (and ‘clean’ Title Deeds issued) when the planning issue has been resolved. There are cases where purchasers have clubbed together to pay for the work that needs to be done. And then the developer can be sued to recover the costs incurred.)

  • Pippa says:

    Am I correct in thinking that although we may be issued with so called title deeds we will be no better of as we will still be unable to sell the property? Is this just a sop to the Troika?

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