OVERSEAS property investors in Cyprus face a double hammer blow from the Cyprus Scientific and Technical Chamber (ETEK) which is demanding that the government there should demolish illegally-built properties that are unlikely to be approved under the new planning amnesty and also set up a black-list of property developers who sell off-plan before full permission is granted.
In an effort to sort out the long-standing problems in Cyprus over Title Deeds and illegal development schemes, the government has established a new system to regularise and officially recognise unauthorised projects. Wherever possible the developments in question will be made official.
But ETEK (which is the statutory technical advisor to the state) is not happy with this approach and wants the government to send out a clear signal that illegal property developments will not be tolerated. ETEK argues that demolition will not just be a penalty for those who have broken the law but also serve as a warning to those who may consider breaking the law in the future.
ETEK is angry and is lobbying for a black list of property developers who sell apartments off-plan without first having secured the necessary permissions and who then make false claims regarding completion and withhold the Title Deeds. It is also angry with developers who, having been refused a loan, remortgage property for which no Title Deed has been issued in order to fund the development of their next illegal project.
Spokesman Costantinos Constantis said various companies were destroying Cyprus’ international reputation and the authorities should reject applications made by land developers who were known to have broken the law.
There is still considerable doubt in Cyprus that the measures currently being adopted with solve the problems faces by tens of thousands of property buyers who don’t have Title Deeds and who may face having their properties demolished.
There is also concern about how long it is taking to put the new bill into action. It also claimed that some of the provisions in the proposed legislation being proposed will lead to stagnation in the construction industry.
Meanwhile European Parliament MP Daniel Hannan has called on the European Commission to send a fact finding mission to Cyprus to investigate the Title Deed problems. He is concerned that the new legislation will not address the main problems especially those relating to buyers whose properties have second developer mortgages on them and therefore they do not have Title Deeds.
In a written question to the parliament he has also asked for specific official figures on the number of property sales contracts that are encumbered with developer mortgages, the current balance of the total mortgage debt of Cypriot developers and the year-on-year percentage increase of that debt over the last three years.
The proposed legislation allegedly designed to speed up the issue of Title Deeds to some 130,000 properties that currently do not has them have yet to be approved by Parliament. An attempt was made to get the legislation approved during the last parliamentary session failed and discussions are planned to continue after the summer recess.
Regular readers will be aware that the proposed legislation has been widely condemned by various groups and organisations including the Cyprus Bar Association.