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Are we being deceived by EC reply to Cyprus question?

EC Vice-President Ms Viviane Reding has replied to Daniel Hannan’s question concerning developer mortgages in Cyprus. However, the answer she gives fails to answer the question asked and I wonder if someone is trying to deceive the European Commission?

Daniel Hannan MEP

Daniel Hannan MEP (photo: BBC)

IN OCTOBER, MEP Daniel Hannan raised a written question in the EU Parliament concerning developer mortgages in Cyprus and evidence that developers, estate agents, lawyers and banks are habitually breaking the law.

He asked the Commission what action it would take against Cyprus to protect EU nationals’ rights who have been misled into buying property that the developer had previously mortgaged. He said:

it is clearly a material fact that the property being purchased has a developer’s mortgage on it, and that in the event of the developer being forced into liquidation, buyers could potentially lose their homes. This fact is systematically hidden from potential buyers by developers”  – and continued  – “Cypriot banks even grant mortgages to buyers without informing them that the developer may also have a prior mortgage of his own on the property.

European Commission reply

IN HER WRITTEN reply on behalf of the Commission published yesterday, Vice-President Mrs Viviane Reding noted:

The Commission is aware that the purchase of immovable property in Cyprus has generated some degree of concern amongst a number of consumers”.

In relation to the alleged infringements of Union legislation by real estate market operators in Cyprus, please note that these problems may be addressed by the Unfair Commercial Practices Directive 2005/29/EC2 which was transposed in Cyprus in July 20073, and has been in force in that State since December 2007.

Its provisions require that traders, including property developers, operate according to the requirements of professional diligence and that they display in a clear, intelligible and timely manner material information that consumers need to make informed choices.

However, only national authorities and courts are competent to assess, on a case by case basis, whether not informing consumers that there are title deeds on the property which is being offered constitutes a misleading omission in the sense of the Directive.

(Click on the highlighted text to read MEP Hannan’s question on the subject of developer mortgages in Cyprus and the reply on behalf of the European Commission by Vice-President Mrs Viviane Reding).

Editor’s comments

Are we being deceived?

CLEARLY, the European Commission has failed to answer or even address MEP Daniel Hannan’s question.

His question had nothing whatsoever to do about “not informing consumers that there are title deeds on the property”.

It concerned the fact that “there is evidence of continuing, systematic and habitual infringement of EC law by developers, estate agents, lawyers and banks” … “it is clearly a material fact that the property being purchased has a developer’s mortgage on it, and that in the event of the developer being forced into liquidation, buyers could potentially lose their homes. This fact is systematically hidden from potential buyers by developers.

I would not be surprised if this misleading and rather foolish answer was designed to deceive the European Union. But I am confident that Mr Hannan and his MEP colleagues will be asking some serious questions of the European Commission and of Cyprus in the days ahead.

Readers' comments

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  • @Bob – The sales contract would not be fraudulent but you could sue for breach of contract.

    (Please ask any future questions you may have in the Cyprus Property Forum)

  • Bob Briggs says:

    If a buyer signs a sales contract, which states “There is no Mortgage or any other Encumbrance on the land/property”.

    Then subsequent investigation (say via the land registry N50 Form?) reveals that there a mortgage &/or encumbrances involved.

    Therefore is this Sales Contract fraudulent & so can be deemed to be null & void? Please inform. Bob Briggs.

  • Costas Apacket says:

    So what’s the next step?

  • peter says:

    I don’t know if anybody has lost their home to a bank that has claimed on a charge related to debt incurred by the developer, nor if such a case has been tried by a court here.

    I suspect that there is no legal precedent yet and would think the best course is for one of the property groups to collect donations or maybe pledges. When the time comes there will be funds to pay for one of the handful of lawyers here who are not bent to take the case, here and to Europe if necessary.

    The danger of not doing this is that some broke old couple who are in ill health will get get taken to court with 2 days notice, the court will find for the bank after a 30 min hearing and that will be the precedent that they need to get back some of their bad loans.

    Anyone in a position where a bank is making threatening noises must have access to immediate representation for the sake of the many in a similar situation.

  • Andreas says:

    If you’re not part of the solution YOU are part of the problem !!!!!! EU

  • Matt says:

    @Peter – You are spot on. As far as the EU are concerned, this is a ‘local’ issue and must be dealt with buy ROC court of law.

    It’s no different to a UK bank or developer conning hundreds of UK house buyers out of money and Title Deeds.

    The UK courts would deal with it.

    So, for all you thousands of unfortunate people out there that have been DUPED into signing contracts where the Full extent of the contract cannot be completed because someone in the chain is holding things up for far too long….. My advice would be, find a breach in your contract and break out of it. Sue whoever is responsible and make sure your money is refunded. If you can legally stop your payments… DO So !

    Think about it. Would you buy a house or car in the UK even though you haven’t received title deed or log book? Would you continue to pay your monthly direct debits to this person knowing they still hold the title?

    Not On Your Nelly – so why do it in Cyprus ??????

  • Denton Mackrell says:

    @Peter. OK but what confidence can anyone have that the EU actually WOULD take action if the ROC courts did not find for the consumer? Precious little on past and current performance!

    It takes years for civil cases to get through the ROC courts (e.g. 11 in the Beaumont & Sims case). Is it a realistic (or indeed moral) proposition to expect individual property buyers to fight such battles (at their cost), when the ROC government should have taken action?

    The ROC has created its own Hieronymous Bosch nightmare tableau of sovereign corruption. Having thrown in its lot with the Devil, it cares not a jot about its image and reputation or indeed what the European Commission may declare. The Commission also appears to be hurtling towards The Pit by saying that it has no responsibility to challenge sovereign corruption in a Member State.

  • peter says:

    Looks to me that she understood and answered the question.

    The first paragraph is a bit of an understatement.

    The second states that EU law applies to this problem and has been ratified by ROC.

    The states how property developers should represent themselves and their product to the consumer.

    The final paragraph seems a bit tongue in cheek in that it states that a court in ROC should decide whether its OK to sell a house without Title Deeds.

    To a reasonable person receiving title to the goods you have purchased is an essential part of the transaction whether its a car house or tin of beans. If title is not handed over when payment is made for whatever reason whether its a prior charge or delays in permissions from land registry then the sale cannot be completed.

    I use the term tongue in cheek because a court in any other EU country would find for the consumer who paid for the goods and is entitled to title, its only ROC that has difficulty with this very simple concept.

    The message seems clear that developers should be taken to court in ROC to force them to hand over title to their customers. The problems that exist between developer banks and land registry are not the consumers problem.

    The EU would expect ROC courts to find for the consumer in accordance with EU and ROC law. If they don’t then the EU would take action.

  • Matt says:

    @Steve – I, fortunately have my title deed..but if I had invested over £100k and could see No title deed coming in my life time…Believe me I would fight for what is rightfully MINE !

    To have a debt hanging over your head with the prospect of loosing all your money to the banks & developers is a daunting prospect. Not something I would want to be stuck with for the next 20yrs !

    Would you put up with this in the UK Steve?

    House you paid good money for and never having legal title to it?

    Waiting for the bank to knock on your door and ask you to leave soon as please…

  • Gavin Jones says:

    This shameful ‘Written Reply’ is yet another instance of someone in a so-called responsible position passing the proverbial buck and using fancy language in order not to upset a member of her European Union club: a clear case of a career politician preferring to keep her hands clean rather than mixing it and clearing out the Augean Stables of a rogue state such as Cyprus.

    This is in spite of all the evidence that the member government under scrutiny is openly flouting the law and allowing its institutions and friends in the property and legal world to abuse its own citizens as well as expatriates.
    This is a scandal of monumental proportions with no end in sight.

    Words fail me and no doubt everyone else…

  • Denton Mackrell says:

    The VP’s reply clearly states that the UFCP Directive DOES apply to immovable property and that the Cyprus government HAS enacted the Directive since Dec 2007.

    In the past, the Commerce Ministry (responsible for the Directive’s implementation) has told CPAG that the Directive does NOT apply to immovable property.

    Presumably MEP Mr Hannan will now seek answers to the following:

    What is the Ministry’s current position? Does it still maintain that the Directive does not apply to immovable property? If so, how can the EC tolerate such a flagrant challenge to its authority and EU law?

    If the Ministry now accepts that the Directive applies to immovable property, what evidence can it provide that it is actively supervising its implementation as far as immovable property is concerned?

  • Steve says:

    Cometh the hour, cometh the man!

    If you have the stomach for the fight, Matt. Go ahead and implement your ideas. We will all be behind you…, but quite a distance behind you, actually. Or are the suggestions an action list for someone else to attend to?

    These days not even the newspapers in Cyprus will name the rogue developers or their associates when the spotlight falls on them. They are even calling the developers’ public relations staff “spokesmen”. This site has drastically toned down its name and shame activities, and who wouldn’t, considering the friends in high places that the developers have.

  • Denton Mackrell says:

    With this kind of incompetent reply, are we not entitled to wonder whether Viviane Redherring is just a little bit out of her depth for the grand position she holds?

  • Personally, I think there are some people (not necessarily in Brussels or Strasbourg) who are extremely worried by the question and are trying to pull the wool over everyone’s eyes.

  • Matt says:

    So here we are again….back to the beginning !

    Like I’ve said many times before. Form an Action Group with 10 solid cases.

    UK Greek Barristers & 2 Cypriot local Lawyers.

    Hit the Cypriot courts with solid evidence and you will win your cases. You will also attract worldwide media coverage and set a president for others to follow.

    Wait for the EU to fight your corner….and you wait a life time with no results.

    EU reply – “some degree of concern amongst a number of consumers”

    err…. that number is very large in case you haven’t noticed !!!!!

  • Stuart says:

    Considering the number of allegations of corruption levelled at the European Commission itself, is it any wonder that we get the sort of response to the MEP’s written question that we see here?

  • Steve says:

    Let’s face it, the answer is not the one everyone wanted, but I don’t know if that is sufficient grounds for accusations of deception. What the lady Vice President says is more revealing than what she did not say.

    1 The EU regards the application of the directive as law in Cyprus and any decisions as to whether offences are being committed under it as a matter for the Cyprus courts and the Cyprus Commerce Ministry and not the EU.

    2 Politicians play these word games all the time. She is saying effectively that the EU Commission is not going to run around Europe with a police hat and whistle, enforcing this EU directive. This means the battle for consumer’s rights in Cyprus has to be fought in Cyprus. The Commerce Ministry is on record on this web site as having told the CPAG that the directive does not apply to immovable property, so it will be an uphill battle, which apparently no one has the stomach for.

    Cyprus Property Action Group (CPAG) representative Denis O’Hare told the Sunday Mail that when he contacted the CCPS to ask how it was implementing the law in relation to property, he was told that “it does not cover immovable property“.

  • graham cockroft says:

    The answer clearly passes the buck. As an ex property rep, I can confirm this practice was rife way back in 1990, deeds were simply not issued and property was re-mortgaged and repossessed even in those days.

    If this is not collusion to commit a crime between banks and builders I don`t know what is. Its clearly evident property is being sold twice.

  • Dee says:

    What a cop-out!

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


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