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Government striving for Title Deeds solution

The Cyprus government is trying to expedite a resolution to the Title Deeds-cum-fraud mess in which people were duped into buying property built on land that the developer had earlier mortgaged to the bank.

Cyprus Title Deeds fraudTHE GOVERNMENT is trying to expedite a bill hoping to resolve the “very important” Title Deeds issue, Interior Minister Constantinos Petrides said on Tuesday as he cautioned that it was a complex legal issue that had to be examined thoroughly.

Petrides was responding to a written question by Akel MP Giorgos Loucaides regarding the government’s intentions on the matter.

In a bid to sort out the so-called trapped property buyers mess, parliament in 2015 passed a government bill granting the head of the land registry the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

The law sought to resolve the problems created by the failure to issue Title Deeds to people who had paid for their property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

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

However, following a string of court decisions in cases where banks objected to the law, the land registry suspended procedures, as authorities contemplated their next move.

The attorney-general subsequently instructed the departments involved to continue implementing the law while appeals were filed at the Supreme Court, which will have the final say on the matter.

Some of the court cases have been won by the banks, largely on the grounds that the buyer’s claim on the property infringed on the contract between the bank and the developer.

But in September, the Larnaca district court upheld the 2015 law, allowing trapped property buyers to obtain their Title Deeds irrespective of the developers’ own commitments to banks.

In his reply, Petrides said despite the matter not being resolved, the ministry had prepared a bill which it sent to the Legal Service for processing last October.

“As it transpired from the differing district court decisions, it is a complicated legal issue and due to this an in-depth study is required,” the minister said.

The bill will be forwarded to the cabinet as soon as it is processed by the state’s lawyers and from there to parliament for voting, he added.

“The Interior Ministry considers the issue of trapped buyers as very important and the delay in preparing the bill is due precisely to the difficulties cited above,” Petrides said, adding that efforts were being made to expedite the process.

Readers' comments

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  • Derek Jones says:

    Steve Ferry – I don’t know what the legal costs are yet my lawyer sent the developer his legal bill but got no reply the developer has agreed to settle with us after the court bailiffs sent him 7 days notice settlement date is 5th of February but my lawyer does not trust the the developer he says they live in another world.

  • Steve Ferry says:

    Having read Derek Jones’s judgement, I can’t understand why there’s interest on the whole of the rent for the entire period. Surely, the first years rent should have 8 years interest, the second years rent should have seven years interest etc. Obviously the cost of the residence should have the full interest as it was basically all owed from day one but the rent was built up over the 8 years. Still, it’s a good judgment, good luck to you Derek and Kathleen. Your case is a bit different to ours as it is the bank stopping us getting our deeds rather than an incompetent developer but we hope to emulate your success. Can you give a rough idea of legal costs?
    Steve.

  • embapaphos says:

    Nigel hi again, any news on what the implications maybe of a future ruling in favour of the banks for those who have already received deeds via the trapped buyers law (and where the bank and developer did not object during the process)

    Ed: There should be no implications for those who have received their deeds as the bank would have objected to the application.

  • Gary says:

    Very pleased for you Derek Jones. Well done. It is not right that individuals should have to fight their own case. Parliament should tackle the banks head on with regard to this whole mess. Unfortunately, for some of us, our developer has gone bust or fled the scene of the crime leaving homeowners who have paid their debt in full fighting the banks.

    It is corrupt, fraudulent behaviour on the part of the banks and stepping in to prevent the issuing of Title Deeds is immoral. The only way to resolve this is for Parliament to hit them hard. Think PPI in the UK for example. They’ve had their chance and blown it. Now take the financial penalties.

  • Derek Jones says:

    Hi all we sued for non-delivery of our title deeds judgement on 30th November 2017 the judge ruled the developer has to pay us €238,000 back plus interest for the last 8 years at the same time we hand back the property the developer had 42 days to appeal it is now passed that time we are now in the process offering property back our lawyer is offering property back giving the developer 7 days to respond you can see the judgement on cylaw.org.
    Regards Derek jones

    Ed: Congratulations! Click here to read an English translation of your judgement.

  • Steve Ferry says:

    We have owned an apartment in Geroskipou since 2012. We paid in full with my pension money. Last year we applied for our title deeds. On Wednesday, (January 17) we received paperwork from the courts as Alpha bank has objected to the issue of title deeds, we have to attend the hearing on Monday 22nd giving us three working days to find a lawyer and prepare. We have been told that Pafos court WILL take the side of the bank. We have then to appeal to the Supreme Court. If we don’t appeal, then the bank can in theory evict us. I was wondering, as it was a stipulation of the troika that this mess should be sorted out as a condition of the bailout, would the European court of justice have any sway in this matter?

    Ed: Unfortunately the bankers (should be spelt with a ‘w’) found a loophole in the so-called ‘trapped buyers’ law’, which was designed to avoid this. The situation has been referred to the Supreme Court for a final decision.

    One of the conditions of the troika bailout was that Cyprus was to:

    Present to programme partners revised draft legislation for all future title deeds transfers that:

    ensure that property buyers who have paid the purchase price in full, will have their title deeds transferred without delay after title deed issuance,

    put obligations on all parties involved to ensure that the procedures releasing encumbrances and transferring the title can operate without delay, legal uncertainty and as automatically as possible, and

    provide safeguards against abuse, inter-alia by introducing a mandatory escrow account system that will ensure that all payments related to a property transaction are processed in a safe manner, at low operational cost and without delay.

    If you don’t have a lawyer, I suggest you get in touch with one on the list provided by the British High Commission in Nicosia.

    I don’t know of anyone whose been evicted because they were duped by crooked property developers and their chums in the legal profession into buying property on land that the fraudster had earlier mortgaged to the bank. That’s not surprising because it can take ten years to foreclose in Cyprus.

  • embapaphos says:

    You will find that alot of promises will be made in the run up to the elections….so blatantly in your face that many of the pre-election promises are hot air….hopefully this one is not.

  • Deanna says:

    The Law Courts upheld (again) the 2015 bill but it the Lawyers who are causing obstructions.

    Mmmm – whose lawyers?

    Ed: Lawyers working for the banks. (Only one judge in Limassol ruled that the law didn’t infringe the Constitution.)

  • Uboat says:

    Well it’s 14 years this year since we took delivery of our Villa Built by Chacholis of Ayia Napa. In Ayia Thekla.

    Now it appears that the council won’t agree a completion of the development until the green areas. (Which Chacholis built on another 3 properties) areally completed and look like mini play parks … what’s more at the cost of us residence by all accounts.

    It’s just one excuse after another to stop you obtaining the tittle to the land. As far as I’m aware Chacholis has Not handed over any titles to any purchasers of any if his developments in the famagusta area…..

    Call me cynical but I smell a big stinking Rat ….

  • Costas Apacket says:

    It’s not a complex legal issue since off the peg conveyancing and land registry systems are available all over Europe, which Cyprus could easily adopt.

    What it actually is, is a complex vested interest issue.

    When the above is added to a lack of will to actually change anything we are again stepping into the long grass.

  • Augean Stables says:

    Slightly off point, but has anyone out there had, or heard of, any sort of developments in respect of Alpha Bank and the Swiss Franc/ Power of Attorney court cases ?

    Ed: I suggest you contact the law firm/group that is representing you regarding developments. As soon as I have any confirmed accounts I will publish an article, but I understand cases are due to be heard in court later this year.

    BTW it isn’t only the Alpha Bank the CHF loan issue affects Bank of Cyprus/Laiki and Hellenic borrowers as well.

    There was an article in Semerini yesterday reporting that that three unnamed banks in Cyprus have voluntarily agreed plans to address the problem faced by consumers who borrowed Swiss francs, according to which loan write-offs ranging from 10% to 40% for conversion into euros or sterling or repayment of loans.

  • Whatever next ! says:

    I understood that many of the points you have so diligently raised were part of the lawyers conveyancing process !!

    Ed: Everyone should be aware that there are a number of ‘crooks’ on this island masquerading as lawyers – 99 per cent give the rest a bad name.

  • Whatever next ! says:

    Yes indeed Carillion manage a lot of MoD homes so I wonder if the guys at the Cypriot Bases will start to change their own light bulbs for the time being !!

    Ed: Carillion was awarded the contract to design and build a new communications facility in Cyprus; a single story building of approximately 10,000 square metres in area, with temperature and humidity controlled environments. Construction started in April last year and should have been completed by the end of January 2019.

    As this is a public sector project it should continue.

  • Whatever next ! says:

    Surely the only “in depth” studies required concern the Cypriot Legal System and the ethics of its Land Registration System and Codes of Banking practice.The facts in this matter are simple, properties were sold to buyers without Title Deeds when contracts should have only been deposited at the Land Registry with title numbers and deeds issued.

    Also the EU bailout depended on this change of Law so the minister is and has been aware of all the facts for many years, so one would believe he doesn’t want to do this and is just prolonging the matter for the sake of it.

    Ed: Properties bought off-plan (i.e. they have yet to be built or are in the progress of being built) cannot have a Title Deed until they are finished. But as in other countries it should be possible to have a Title Deed available when a purchaser accepts delivery of a property.

    Those wishing to take the risk of buying off plan should (a) get the developer to register their share of the development on the deed (b) pay a contribution to the developer’s mortgage debt to the lending bank (c) pay off a percentage of any other debts registered against the land (d) ensure planning and building permits have been issued (and where possible get the physical construction work checked to see it complies with the agreed plans). And pay the balance to the developer as construction progresses and withhold a tidy sum until the Title Deed becomes available for transfer.

    However even this approach will not resolve the problems if the developer deviates from the building permits and approved plans, or if he fails to complete the project, or if he is unable or unwilling to pay his tax debts, or if the company ‘does a Carillion’.

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