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Cyprus Property Rights – Real or Illusory?

Article 23 of the Cyprus Constitution is forthright about the property rights of individuals, including the provision for Government compensation in certain situations. However, as many property buyers soon discover, ideals enshrined in the Constitution have yet to be translated into effective consumer protection, rights and safeguards. This discovery comes as a nasty shock, particularly […]

Article 23 of the Cyprus Constitution is forthright about the property rights of individuals, including the provision for Government compensation in certain situations. However, as many property buyers soon discover, ideals enshrined in the Constitution have yet to be translated into effective consumer protection, rights and safeguards.

This discovery comes as a nasty shock, particularly for buyers from other EU countries. They assume, quite naturally but wrongly, that the rights and safeguards in their own countries are common across all EU member states.

Government involvement

The Cyprus Property Action Group recently met with Finance Minister, Michalis Sarris. Arranged with the help of MP Georgos Perdikis, we spent a considerable time with Minister Sarris and senior civil servants discussing property issues. Finally, the Minister asked us to prepare a report on the problems and how they may be resolved.

Protecting buyers

There are laws in Cyprus designed to protect buyers’ rights; the Streets and Buildings Regulation Law, Cap 96 is an example and assures amongst other things that the property has been legally built. Article 10 provides that no-one can occupy a building unless it has been issued with a Certificate of Final Approval.

As some buyers have discovered, the lack of this Certificate can have disastrous consequences!

In one case, several buyers in Pyla, Larnaca District, who had properties built later discovered that their dwellings were illegally built, without planning and building permits. As a result, their homes were the subject of a demolition order, and, to add insult to injury, the land was encumbered by a hefty mortgage!

At a more mundane level, occupying a building without this Certificate may have health and safety issues. It could also invalidate buildings insurance cover, and there may be contractual implications regarding late delivery penalty payments. Buyers have told us that their lawyers never even mention this Certificate

A director of Armonia Estates Ltd (Leptos) wrote to two clients who had raised the matter of ‘Completion Certificates’ earlier this year. The director stated, “the said legislation although in force, in practice is inoperative” – and went on to say reassuringly, that as many Cypriot house owners did not have certificates (also known as Certificate of Final Approval), he doubted that the authorities would prosecute everyone!

Title Deed Limbo

CPAG has been contacted by residents on Leptos’ Harbour Shore Estates (Coral Bay) who say their properties have been waiting over 30 years for Final Approval Certificates. Without this certificate, the Title Deeds cannot even be applied for.

Although Leptos were not the owners at the time (Leptos Group bought the development in 2000), Coral Bay residents took Harbour Shore to court in 1998, but claimed they lost the case when their lawyer did not turn up for the final hearing!

At another Leptos estate, some buyers have been waiting 11 years for their Title Deeds. They were recently advised that the process could be speeded up with the payment of an appropriate ‘acceleration fee’, about CYP 100 charged by the Land Registry Department.

The company’s magazine, “Elegant Living”, states to potential buyers “due to the amount of construction over the past years, the issuing of your Title Deeds can take up to two years”. It continues, “as the purchase has been logged with the Council of Ministers your investment is completely safe. In time the Land Registry will catch up with the backlog”.

Planning Authorities

The whole issue is exacerbated by problems within the Lands Registry department. The Ombudsman earlier this year under “Ombudsman blasts land registry” publicly cited “vast flaws and alleged mismanagement”, going on to state ,“Bigger problems have been discovered at the Town Planning department” including “granting permits without the legal requirements being satisfied”. When it came to local area plans, the problems were “insurmountable”!

So, the problems are not confined to small rogue developers and illegal estate agents as certain parties have suggested. The malaise runs throughout the whole sector. Yet, unfortunately, this industry is one of the main drivers of the economy.

Quality of product

CPAG has a unique insight into the ‘finished product’ and its associated problems. We are ready to work with Government and the private sector to put an end to this malaise blighting the island’s property industry which continues to damage its image and international reputation. In future issues we will cover potential solutions.

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