In its latest issue, the Overseas Property Professional (OPP) magazine published an article about the Title Deed scandals experienced by thousands of people who have bought property in Cyprus. (The OPP is a very well respected international trade magazine published for overseas property agents, developers and associated professionals).
“OPP has learnt that disgruntled expat buyers in Cyprus have formed a new pressure group against one of the country’s biggest developers to highlight problems regarding the issuance of title deeds.
The pressure group, which has not yet decided to go public with its formation, along with other similar bodies, are complaining that they have been waiting years to receive their title deeds from developers which, for a variety of reasons, have not issued them to their buyers.
“Most property buyers in Cyprus do not actually own their properties as for up 10 -15, and possibly up to 30 years after purchase, the developers do not transfer the Title Deeds and instead use them to raise mortgages on the land on which the properties are built to finance further developments,” alleged Denis O’Hare from the Cyprus Property Action Group (CPAG), a body formed in 2007 to tackle the problem of title deeds in the country.
“Currently, Cypriot developers have record mortgages of over €400million, this in a relatively small market. This is an extremely risky situation for these buyers as if their developer defaults they can lose their property which they have already paid for in full to the lending bank. We think this situation is a national scandal as most Cypriot buyers are also in the same trap. By the way, whilst in this trap most foreign buyers are subject to financial exploitation by the developers. Imagine buying a car, driving it away, and the dealer keeping the log book and ownership for 30 years,” he added.
CPAG recently took the matter to the Cypriot Minister of Interior Neoclis Sylikiotis and Minister of Commerce, Industry and Tourism Antonis Paschalides, in the first of a series of meetings to discuss a CPAG Report outlining and documenting the problems facing property buyers in Cyprus.
The CPAG Report was commissioned by former Minister of Finance Michaelis Sarris and was delivered in early January this year.
Minister Sylikiotis told CPAG that as a result of the boom on the island over the past decade, issues had surfaced however he would do his best to push through new legislation clarifying title deed concerns by the end of the year. He also added that various meetings had already taken place with the Land Registry, to facilitate the new laws and that extra resources would be called to aid with the transition.
Although not a recent problem, the issue of title deeds has been thrust to the surface of debate on the island as economic conditions force the industry to tighten its practices.
A recent report by Greek-language newspaper Politis, quoting industry sources, said that “the reduction in interest from Britain is not only due mainly to the Sterling- Euro exchange rate, or the international economic crisis, but also to the publicity in the British mass media and on the internet concerning the problems with issuing title deeds that face British buyers”.
The triple whammy of exchange rate, economic conditions and title deeds is starting to hit the Cypriot industry where it hurts, as it relies heavily on the international market to continue its growth.
“In the last three months the reduction [in sales] is in the area of 30-40% from the foreign market and 5% for the internal market, while the forecast is that the reduction will continue until the end of the year and beginning of 2009,” said Solon Kourouklidis, president of the Pancyprian Real Estate Association, in an interview with Epiloges.
Many of the island’s biggest developers state that the blame for the problem should lay at the feet of local authorities, government and the Land Registry for not streamlining the process sooner, whilst the above blame developers for the situation.
In an effort to clarify the respective positions, a conference has been organised by law firm Michael Kyprianou & Co, in conjunction with the Bank of Cyprus, to be held in Paphos on October 29.
“The aims of the seminar are to clarify the legal process for obtaining Title Deeds and to dispel much of the misinformation and bad press in recent UK media coverage and incorrect information being given by some property developers and real estate agents,” explained a spokesperson.
Entry is free to the event, to which various developers and government ministers have been invited to attend.”