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Pay your developer’s debts or else!

People who bought property from the company operating the Froiber brand in Cyprus (A&G Property Wise Development Ltd) that went into liquidation last year are being chased by the banks and the tax authorities to repay the developer’s debts – or else!

TOWARDS the end of last month, the Greek Language newspaper Phileleftheros (? ????????????) published a story on its front page about the problems faced by those who bought property from the company operating the Froiber brand in Cyprus, A&G Property Wise Development Ltd, that collapsed and went into liquidation last year.

We have received a letter, written by one of the Froiber buyers, describing the financial demands being placed on them by the Banks and the Cyprus Inland Revenue Department referring to the Froiber liquidation article in the Phileleftheros.

Dear Sir / Madam,

I would like to refer the following article to your attention.

Monday 30 August 2010 “? ????????????”, page 3, ‘???????? ?? ???? ????? ??????????”.

The article outlines the unfair treatment of buyers of apartments sold to them by the Real Estate Developer Froiber. The unfair treatment concerns the banks to which Froiber currently owns millions of Euros (the company owns 4.7 million to one bank specifically) and them expecting the buyers to settle the loans. The unfair treatment also concerns the Inland Revenue Cyprus which also demands that the final buyers of the apartments settle taxes owed to the Inland Revenue by Froiber.

The situation has reached the proportions of extortion since the Inland Revenue and the banks threaten the buyers that they will not receive their title deeds of ownership to the apartments which they have paid for in full already, unless they contribute a ‘symbolic amount’ of at least 8,000 Euros per apartment to the banks and a few more thousand to the Inland Revenue. The problem is that the buyers are not receiving any protection from the law considering the fact that they were purchasing the apartments in good faith and have no responsibility or knowledge whatsoever regarding the mortgage of properties and amounts owed to the banks and IR by Froiber.

The banks have issued the loans to Froiber and it is the bank that should bear the risks of these loans. It is about time that the Cyprus legislation is updated to reflect these issues. For the banks the amounts mentioned in the article are symbolic, but to the buyers these are substantial amounts, and the banks have even gone so far as to offer loans to the buyers at “preferential terms”, so that they have a way of finding the money that Froiber owes them.

Unfortunately I am one of the buyers and I feel that this should be heard, since there are 17 blocks of flats that were built by Froiber and are facing the same problem, and we could say that they were built illegally if Froiber had no intention of settling the loans. I would like to request a program to be dedicated to this specific Froiber issue or the general title deeds and banks issue in Cyprus, since this is a big problem and the situation will be repeated in the future affecting more buyers.

I would like to propose for representatives of the various parties to be invited as guests of the program; representatives of banks, the Inland Revenue, the buyers, the government, the lawyers, the liquidator and others affected (i.e. Cyprus Property Action Group created by foreigners who bought property in Cyprus) in order for everyone to hear how these people are planning to tackle this serious issue, and exactly how the future will be affected if no action is taken for those who are already in this situation.

Lots of articles were published stating the complains of the buyers and the responses they had from banks, government and lawyers but not even one article was written with direct discussion with them and making clear their positions and what kind of legislation they base them on. Lots of lawyers are willing to discuss the problem and future outcome but when you enter their office all you hear is to pay when you are already in the situation. Their only suggestion is to consult a lawyer before buying. I am aware of the fact that you need to consult a lawyer before buying property so that I know if the land on which the property is built is mortgaged, and which I did, but the truth is that all the lands are mortgaged and the real estate developers are allowed by legislation to sell apartments for which they do not have the title deeds yet.

If someone wants to purchase a new flat, then they know that the land is mortgaged and there are no title deeds. If you want to purchase an apartment with title deeds, you need to purchase property which has been built over 10 years ago. When I was searching to buy an apartment I only could find one apartment with title deeds which was 20 years old, people do not have much options than believe that the title deeds will be issue or simply rent. Also another issue is that if you want to sell a property without title deeds you need to go through the developer, so he can cancel the contract of sale with you and enter a new one with the new buyer, in all cases developers agree to provide their signature only if they get a parentage of the selling price with the disguise of “service fee”. If you don’t agree then you cannot proceed. It is very difficult for me to understand why developers and banks are treated so preferentially comparing to the final buyer who by the end of the date face all the problems created by the previously mentioned parties and on top of that no matter to who they turn to i.e. banks, lawyers, tax representatives the only thing you hear is just pay, without much explanation, they don’t even want to enter into conversation to explain what kind of laws allow the current situation.

I would like to be able to get an honest answer regarding this problem because all the experts are simply advising the buyers (including me) to just pay and not enter the ‘trouble’ of dealing with it in another way, the interesting thing is that none of them ever told it publicly.

My question is: Can we actually go against the government for not offering protection to buyers of real estate in Cyprus? How far must a person go in Cyprus to receive his rights, which are so normal in other countries?

I would like to remain anonymous and for my identity to be kept secret.

Readers' comments

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  • Costas Apacket says:

    Thanks to Matt & Steve for their comments.

    In the meantime, after using the website just a few days ago I’ve already received a written response from my MEP saying that he is aware of the scandalous practices in Cyprus regards the property market and that he is writing to the British High Commissioner, Matthew Kidd, and also to the European Commission about our particular case and the situation in general.

    Without sounding like a UK Expat in denial I urge everyone who is in the same situation to do the same as a matter of urgency.

    The more pressure that is exerted by MEP’s in the EU Commission and by MP’s in the UK Parliament the better.

    Let me know when you’ve formed an action group in Cyprus to fund a Greek Barrister and I’ll join.

  • Matt says:

    Hi Steve,

    I know I’ve mentioned TRNC before…and I’ll mention it again !

    Over the past 15yrs, I’ve heard nothing but complaints from my Cypriot families and read untold amount of articles in Cyprus newspapers about the scams in TRNC. oh how wicked those naughty Turks are !!!

    Guess what the scams were?

    TRNC issuing post 1974 title deeds and selling land or property to foreign investors.

    Southern Cyprus of course were furious about this (illegal) practice and asked the EU to step in to make a change. I’m not sure what the change was – does anyone out there know?

    Anyway, can you spot the similarities between both sides….

    I suppose in all fairness, the Cyprus government and banks thought the Cypriot businessmen would conduct their business fairly and issuing mortgages against the value of the land was a legitimate practice…maybe…maybe not?

    What’s needed is for a top Greek Barrister to find loop holes in the Cyprus legal framework, allowing you guys to pursue with your personal writs against dodgy Cypriot companies.

    How about CPAG charging members a fee and allowing the funds to be used for such a task that all can benefit from.

    as they say….cats out the bag now. Watch the developers run and hide, taking the money with them. You probably will never find them again !

    Oh, and if the developer is deceased….PROBATE , and you really don’t want to get tied up in that mess

  • Steve says:

    Matt is a breath of fresh air, because his insights make a real contribution to the debate. Most UK Expats are in denial and continue to advocate writing to MP’s and MEP’s. It’s the same old “somebody should do something” that you read every week in the UK Sunday papers where UK banks and building societies compensate people when they have been too trusting or just plain stupid.

    Well, Matt is telling you it won’t work in Cyprus and he’s dead right. In any case, if the aggrieved finally get their title deeds, they won’t be able to sell at the prices they would want. The property developers make a huge contribution to the GDP of Cyprus and in return the government takes very good care of them.

    This same government has reneged since 2003 on so many promises to the EU that it is not worth a bean when they say they will fix the property market. Let’s face it, we all thought we understood the Cypriots. They were just like us, but lived somewhere warmer. It isn’t true. We don’t understand them at all and we show that by trusting them to keep their word and now we can all see where that got us.

    It pains me to read stuff from Brits who have been screwed by the Cypriots telling us all they know how to fix it. Please do me a favour and listen to Matt.

  • Matt says:

    Hi Costas,

    I’m half Cypriot and I know too well how the Cyprus system works. I really do feel for you guys. It’s not a nice situation to be in and causes nothing but heartache.

    The Cyprus government are more interested in making sure Greek-Cypriots are fully compensated for the lost of land and property in TRNC. Southern Cyprus couldn’t care less about anyone who has lost money due to dodgy scams and dealings.

    Cypriots have been waiting since 1974 (36yrs) for property & land to be returned to them. So they are in no hurry to help foreign investors that have been stitched up by Cypriot businessmen.

    I know of no action group that has collectively taken legal action.

    What’s happening to CPAG?

    If I were them, I would charge a members fee and use the funds to legally BASH the Cyprus government into making a change. Then it clears the path for individuals to serve personal writs with the hope of not being ignored by the courts.

    You guys can wait 20yrs and you may never see your title deeds and it will always be difficult to re-sell your, (banks) property or land.

    Developers will continue to liquidate their companies, transfer funds and disappear into the sunny Mediterranean sunset, never to be seen or heard of again..

  • Costas Apacket says:

    Hi Matt,

    Good advice, but I think we should do both.

    How many groups have been formed to serve a writ yet?

    Do you know of any that the rest of us can join?

    In the meantime I urge people to continue spreading the word via

  • Matt says:

    Forget your MP’s or MEP’s.

    They can do and will do Nothing for you. They cannot get your money back or transfer of title deeds. They can not push banks or institutions in your favour.

    The way I see it, European MEP’s are not willing to help return land and property from TRNC to Southern Cyprus owners, so why should the Cypriot government bow to MEP pressure.

    Concentrate your efforts collectively on serving legal writs to the fraudulent developers.

    Waiting for legislation to change will take many many years. (If) the law changes, you will still need to personally take the developer to court. By this time, your developer will be long gone, along with the registered Ltd company and ALL your money !!

    As things are hotting up in the Cyprus property fraud, you all need to act fast. Believe me, they will not return a penny unless they are dragged to their banks forcefully.

  • Costas Apacket says:

    By entering your UK post code into this website: it automatically identifies your local MP and all of your MEP’s from all parties.

    It is then very simple to send an email both to your MP and also all of your MEP’s as a group, (eg one email goes to all your MEP’s), by completing a very simple template with your personal details and your views about the situation in the Cypriot property market.

    It’s also useful to give your MP & MEP’s the links to the Cyprus Property News and Cyprus Mail so that they can read for themselves about the property market shambles here in Cyprus.

    By making an initial contact with your MP and MEP this will help to inform them and keep the ball rolling.

    Once the legislation becomes clearer we can then use these same links to co-ordinate our comments should the legislation not address the key issues as Denis says very eloquently in his post in the Cyprus Mail.

  • paul ruse says:

    I agree with Andrew.

    Don’t just stop at your Euro MP your UK MP and if you are still in the UK or have connections tell the local press.

    Makes a good local story. Local couple meet with their MP and discuss the problems of buying in Cyprus, may be a good headline to the story ?.

  • Matt says:

    This situation is going to get a whole lot worse!

    Unfortunately, when word gets out that developers can transfer their funds overseas and suddenly declare themselves bankrupt?..many more will follow.

    If this happens in the UK on a large scale, the Serious Fraud Office steps in to find out what the developers have spent their millions on and try to retrieve any assets to clear the outstanding loans.

    There is nothing you guys can do to fight the Cypriot system individually. This situation of fraud has snow balled to such a Massive scale, it’s going to be virtually impossible to put right.

    Over 200,000 outstanding cases is an unbelievable figure and near impossible to rectify.

    …form an action group with 200 members that have good solid cases. £1000 per member. Use a team of UK Greek Barristers (not Cypriot) and a small team of Cypriot lawyers. Serve a writ and bring them to court ASAP. Create big exposure. Show the courts the Action Group has funds to fight ANY developer in Cyprus. Hit them right were it hurts most….their pockets !!

    Find out if any UK or European TV network station wants to run a documentary on this scandal. Expose the Cypriot Government and banks.

    Mark my words…if developers get the government and banks blessing – many more developers will go bankrupt or just vanish into thin air, taking millions of your euro’s with them.

    My Cypriot father in-law waited 18yrs for his title deeds which he managed to get last year. The developer emigrated to Australia and died a few year ago of old age. His business partner was still alive and living in Cyprus. It took a group of 15 house owners to track him down and demand their title deeds. The house owners had to pay back taxes and fees for transferring title deeds – about 6,000 Euros in total but managed to secure the deeds – eventually !

    Actions Speak Louder than words

  • colin biggs says:


    Beware that sunny welcoming smile. with it’s trojan horse banking, property and legal system.signing on that dotted line is like injecting yourself with a financial meltdown virus.

    I just hope there is enough fish left in the sea when the property, financial, tourism, construction and legal systems break down and all the Cypriots have to return to the sea to earn a living and then fleece that environment?

  • Peter G Davis says:

    So there is a belief that we should all club together to save the banks from suffering any loss and save the big house of the developer from being repossessed.

    As I have said before “The Cyprus Property Market is Dead in the Water”

    This is only the start. When the Cyprus Government is on its ‘upper’ it will act but by then it will be too late.

  • Simon says:

    Wasn’t this supposed to never happen? Were we not worrying about nothing? Wasn’t it all very unlikely? The good news is when the big wave hits it will expose all the lies and the guilty will be naked.

  • Costas Apacket says:

    An easy way to write to your MP or MEP about these issues is to use the website shown below and just enter your postcode.

    This will bring up separate templates, one for your current local MP and one for all of your MEP’s, which you can fill in with your personal details and comment about the disgraceful situation regards the property market in Cyprus.

    It’s very easy and quick to do so I encourage you all to get on with it sooner rather than later!!

  • Andrew says:

    Tell your Euro MP. Everyone should do this now. This is only the start.

  • @James – I have emailed a copy of the article to you.

  • Costas Apacket says:

    Where are you Mr Sylikiotis with your promises now?

  • Jim says:

    The banks will have the title deeds as security for the developer loans, which I understand to be around 14 million Euros, mainly owed to the Universal bank.

    As such, they have a claim on the properties to settle the debt.

    The tax authorities will also have a claim against any company assets that exist. Probably out of what remains after the bank has been paid, although I am not certain who has first bite at the assets.

    My suggestion, is to get together & form an action group. The more publicity you can get for your plight, the better. Perhaps if the powers that be get embarassed enough, a more amicable settlement may be likely.

    I have said it before & will say it again, never buy a property in Cyprus, unless the title deeds are available.

    If, as seems likely, the property market in Cyprus continues to deteriorate, then many more developers are going to suffer similar fates & so affect the purchasers of their properties.

    I can see no hope of improvement, unless the government do a root & branch overhaul of the property system, to ensure that every property sold has a title deed ready for transfer to the purchaser.

  • James JH lockhart says:


    For the less Gifted of us in the Use of Computers can this letter be made Into a File We Can Download And Send to As many MEPs As possible.

    Its Clear the Sender has found out As many of Us, that Cypriot Lawyers will Do nothing to protect, vested interests Are to Strong In Cyprus.

    We Must use Stronger interests ie EU & And out own Governments, Remember the ROC is Expecting Our Countries to Support them over the CYPROB,

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.


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