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How many trapped buyers?

Earlier today the Greek language newspaper Χαραυγή (Daybreak) published statistics on the number of trapped buyers unable to get their Title Deeds because of various unpaid developer debts.

Trapped buyers in CyprusINTRODUCED in 2015, the Trapped Buyers’ law was designed to enable those who had paid for their property in Cyprus to get their Title Deeds but were prevented from doing so because their developer had failed to repay mortgages on the land on which he was building and/or had failed to pay outstanding taxes.

Following recent decisions by District courts in Limassol and Paphos that ruled the law unconstitutional, the Land Registry suspended transfers until the authorities considered what to do.

Legal Services then directed the various departments to continue implementing the law pending the results of appeals filed at the island’s Supreme Court, which will have the final say on the matter.

In the meantime, lawmakers are looking to plug loopholes in the Trapped Buyers law and it is hoped that a revised law will be passed in September.

Trapped Buyers statistics

There has been much speculation as to the actual number of trapped buyers. But earlier today the Greek language newspaper Χαραυγή (Daybreak) published statistics that it obtained from the Department of Lands & Surveys. These indicated that there are  71,000 cases currently in process involving 106,985 individuals and companies:

Applications from trapped buyers – 11,500 cases involving 15,640 purchasers (6,817 Cypriots, 8,146 foreigners and 677 companies).

Initiated by Land Registry directors – 28,000 cases involving 36,791 purchasers (12,216 Cypriots, 22,986 foreigners and 1,589 companies).

Applications from property developers – 6,000 cases involving 7,756 purchasers (2,363 Cypriots, 5,074 foreigners and 319 companies).

Title Deeds issued, transfers pending – 20,000 cases involving 38,970 purchasers (13,830 Cypriots, 24,003 foreigners and 1,137 companies).

The above are the cases where problems have arisen due to the court rulings; a further 165 court cases are pending.

Vendor documents filed after 1 January 2015 – 5,500 cases involving 7,828 purchasers (2,203 Cypriots, 3,937 foreigners and 1,688 companies). Note that these cases are not covered by the existing legislation.

Of the 106,985 persons and companies: 37,429 (35%) are Cypriot, 64,146 (60%) are foreigners and 5,410 (5%) are companies.

Readers' comments

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  • embapaphos says:

    @Nigel, interesting that developers applied via the trapped buyers law too, this can only mean that many buyers were just not in a position to pay for transfer fees etc can see no other reason why if you have paid for a property as per your sales agreement that you would not want the deeds to it….

    Ed: Some of the buyers may not be in a position to pay but there are many others who do not understand (or refuse to understand) how vital it is to have the Title Deed to the property they’ve purchased.

  • Steve says:

    Thanks Nigel,
    I was advised to pay what the developer asked for on the basis that overpayments can be claimed back from the tax man. However, in contrast to the short deadlines for making the payments to the developer, months or years can roll by before the developer provides the documentation needed to make the application for return of overpaid tax.

  • Steve says:

    @Embapaphos – You are right about the timing, but I did say the decision was made early last year when going through the developer would have also qualified for the 50% discount in fees, so we are comparing apples with apples.

    We did not use a lawyer to make the application, but it became necessary because if you use the trapped buyer legislation in Paphos, any IPT due to the developer is not determined by the Land office or the taxman but by the developer, who blocks the process until you have paid what the developer says you owe.

    If you don’t agree with the figure, you dont have much time to argue or pay up before the Land Office disqualifies the application on the basis that it is out of time.

    Ed: It seems that the Land Registry office in Paphos makes up the rules as it goes along! You should be able to claim any legitimate IPT overpayments from the Tax Department (your Citizens’ Service Centre should be able to help you with the paperwork).

  • embapaphos says:

    @Steve, your cost/benefit analysis depends on the timing, don’t forgot and Nigel can correct me, that transfer fees a few years ago were twice what they are now…of course if you factor in the lawyer fees (and you didn’t really need one to apply via the trapped buyers law) and the exchange rate, you are back to square one….and would have saved all the hassle if you had as you say given the developer a gift and got the deeds straight away so to speak.

    Ed: Just to confirm – if you paid VAT on the purchase price of the property, you will pay no Property Transfer Fees. If you did not pay VAT your Property Transfer Fees will be reduced by 50%. Plus there’s a further 10% reduction if you applied under the provisions of the Trapped Buyers’ law.

  • Steve says:

    For a relatively small δωροδοκία (bribe) of a few hundred Euros, I could have obtained title deeds in two weeks via the developer, but I didn’t feel happy about doing that. Since I filled in the papers and paid the fee to use the Trapped Buyer legislation early last year, we have seen the GBP nosedive around 30% versus the Euros we need to pay our transfer fees and we have had to hire an attorney to help us. Overall result? the δωροδοκία would have been more efficient and cheaper too. Moral of the story? In Cyprus, think and act Cypriot – you know it makes sense.

  • embapaphos says:

    @ed, agree with sky, maybe the mass media should focus more on highlighting the MASSIVE number of people affected when they host MPs on TV giving speeches regarding the trapped buyers problem in CY…

  • Deanna says:

    Just want to reiterate the thanks we all owe you Nigel. If it wasn’t for your work in collecting information together none of us would know where we stand.

    Ed: Thank you Deanna.

  • sky says:

    Thank you Nigel! great work!
    Very valuable and useful piece of information for non-Greek speakers.

    Ed: You’re welcome sky. P.S I translated from Greek to English using Google Translate

  • Peter Westhead says:

    Can anyone tell me how I can find out if I am a ‘trapped buyer’ as the land registry do not seem to know or are not telling me. I have asked them the question on two separate occasions.

    Ed: You’ll need to ask the Land Registry for a Title Search. It may take a few days to get the result and it will show if you’re a trapped buyer. Cost €20.00.

  • steve r says:

    People on our site are also trapped buyers but of a different nature. Our site is free from any developer mortgages but 2 out of the 7 properties have bank mortgages. The developer skipped the island and the company is being managed by the receiver. The developer never finished the site but the residents have agreed to all chip in to carry out the work.

    It now transpires that the developer owes various taxes and merchants bills but a final figure cannot be determined because he never submitted any accounts. The receiver will not spend any more time on this case due to lack of funds so we will remain trapped for ever. Just a sad case all round.

    Ed: If there are no claims lodged against the property at the Land Registry they pre-date the deposit of your contract of sale, the fact that your developer owes taxes and bills should not affect you.

    As you’ve already clubbed together to complete the project you should all continue to get the deeds issued.

  • embapaphos says:

    @peter, indeed 1000,000 no small sum but drop in the ocean to what I believe various developers owe the state, and developers who are long gone.

  • embapaphos says:

    @ED, 100% correct state made this mess, they should clean it up, and as land registry Larnaca told me over 3 weeks ago if the banks have a problem (and even with deeds issued so far via law ) they should take it up and sort it out with the government who carried out the transfer and not those who now have or will receive deeds.

  • embapaphos says:

    Hi Nigel, land reg head and chairman of the house legal committee this pm on sigmatv acknowledged extent of problem in terms on numbers and of Cyprus image abroad.

    The rest of the chat focused on time, timing, and having to get something done soon (next few days weeks or all summer) before the sky falls on our heads God forbid he said as this will happen IF the Supreme Court upholds the district courts views.

    I think there is an attempt to push as fast as possible through as many applications-transfers as possible as they know the Supreme Court will ultimately rule against law as it stands.

    Mr. Georgiou also mentioned the need for some compromise slightly disconcerting as compromise how and with whom?

    ED: As it’s the state that allowed this to happen, it should be the state that pays for any compromise to clean up the mess it created – and for making sure it never happens again.

  • Jane says:

    Thank you for keeping us updated. You information is always so very useful and very much appreciated.

    Ed: You’re welcome Jane.

  • peter smith says:

    Bearing in mind that we have all have paid the land registry our 10 euros to register for our deeds, that’s over 1,000,000 euros another great scam lol.

  • embapaphos says:

    Thanks Nigel very interesting, will be nagging some MPs, see if they can come clean and tell us what amendments are being proposed to the law etc.

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