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O’Dwyer decision another nail in the coffin

It appears that buyers rights to property in Cyprus are not protected by the law even though they may have deposited their contract of sale at the Land Registry for ‘Specific Performance’.

ALTHOUGH we are not legal experts and cannot express an informed opinion on the legal intricacies of court cases, there is a point raised in the judgement of the Conor O’Dwyer vs Karayiannas Developers case that makes no sense at all.

In her judgment, the judge noted that “the fact they (plaintiffs) submitted a sales contract to the Land Registry did not mean they automatically and in perpetuity have become the ‘owners’ (as they mean it) of the residence.”

This is a bewildering view that would suggest that the irrevocable right to property is not protected by the law in Cyprus. If a sales contract for a property that is submitted to the Land Registry does not mean the buyer has become the owner in perpetuity, then we have a serious problem with our laws.

How and when would a buyer become the legal owner of a piece of real estate in perpetuity? Are we to believe that our law does not always safeguard the right to ownership of property?

These are very important questions that nobody should be asking in a country in which there is rule of law. The protection of property rights is one of the fundamental principles on which democracies are built. Yet the judge in the above-mentioned case did not believe that submission of a sales contract to the Land Registry was enough to guarantee a person’s property rights. If this is the case, and the judge understands the law better than us, people should be told how their property rights are protected when they buy real estate.

Until this judgment was issued, most people were under the impression that once a sales contract was submitted to the land registry, the ownership of the buyer was indisputable. There is a Supreme Court decision supporting this position, but the judge in the O’Dwyer case either disagreed with it or was not aware of it. Whatever her reasons, her decision was another nail in the coffin of the Cyprus property market, as it served to reinforce the widely held view among foreigner buyers that Cyprus law offers little protection to property buyers.

There could not have been a worse advertisement for the Cyprus property market than this decision. When a judge rules that not even submission of a sales contract to the Land Registry safeguards property rights, what foreigner, in his right mind, would consider buying a holiday home in Cyprus?

Nail in the coffin

Readers' comments

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  • andyp says:

    @ Dave. There are several Conor cases ongoing. He lost one and won another with a few still to come up I believe.

  • James JH Lockhart says:

    Should not the MEPs table a motion asking the EU to suspend the EU presidency from Cyprus, til they have in place effective rule of law, and effective property laws ?

  • out of the frying pan into the fire says:

    O well back to letter writing to your MEP and your local MP wherever you may be or what ever job title they have.

    Tell them the story once again.

    Sooner rather than later it will become like Tunisia and Egypt. Some thing will have to give and go.

    Keep up the pressure.

  • Dave says:

    Why was this bent island allowed into the E.U. they are just milking it. Cyprus now has the dearest Elec in the E.U. this has doubled in 5 years as has Rates and petrol. It seems if they run out of cash they just put prices up. Now we are not allowed to show our tax discs is this because most Cypriots do not have them, now only the police can know that. They will never get this North South divide sorted out as long as I have a hole in my **** road outside my house!

  • Dave says:

    Conor Conor I heard last Tuesday that he had lost his case then I hear last Saturday that he has won it. Now that we are in the E.U. why does a independent lawyer not want to know the answer to Conor’s dilemma, which one is right?

    Cherie Blair accepted the case of the Orams’ she took their money but they got no real answer.

    Title deeds amount to approx 100,000 mostly due to ex-pats multiply this by 5-7K. and you have a lot of noughts a lot of money, this is what the Cypriots want so why do they not take it.

    My Title Deeds are registered but apparently this makes no odds. Why do they not ask if you would like to get your title deeds with your final payment, this could save a lot of time.

    Why is there no such thing as a Solicitor who wants to know the answers to the above, or do they know, but it is just a matter of which is right at the time, if it suits them. surely the law books cannot be that complicated, if there are any.

    Finally Merkel got on very well with the president on her visit here regarding the N/S divide, agreeing with him all the way,this can only mean one thing,that she does not agree with Northern Cyprus either. Another checkmate.

  • U Boat says:

    What a shambles !!! What sort of message dose this send out to the less trustworthy of the Developers?

    May be this judge is having a nice retirement home built in the hills? (I wrote this before reading the comments below)
    I would never buy in Cyprus again!

    Once again the few (Greedy Cypriots) spoil it for the majority.

    Why cant the EU do anything? If it were happening in England, then they would be all over us like a rash.

    regards
    U Boat !

  • Chris Woodward says:

    We are talking about the opinion of a judge passing judgement on a single case on the evidence placed before her; who as you point out should have made reference to any existing case law in order to come to an informed decision. Sadly only by going to appeal and achieving a ‘case stated’ outcome would there hopefully be an informed outcome? Maybe she’s married to a property developer!

  • Johnny Cyprus says:

    The words of the judge in this case may have caused some alarm, but there is at least one previous case in this context where the judges’ conclusions should raise concern.

    The case of Beaumont and Sims vs Nicos Papacleovoulou was taken to the supreme court in April 2010, and was reported on this website. The appellants had paid for a house that was subsequently seized by the bank under the terms of a loan taken out by the developer who ‘sold’ it to them. The contract was signed in 1999 and was subject to the very 1997 Sale of Land (Specific Performance) Amendment that is supposed to ‘protect’ us buyers.

    They successfully sued the Lawyer who acted for them in the purchase, however the points noted by the judges in this case would seem to at variance to statements and reassurances given by Ministers, Lawyers and the Supreme Court itself.

    The judges noted that a buyers lawyer should check to ‘ensure that there were no registered charges that would PREVENT the future transfer of title free of encumbrances’.

    Further it was noted by them that a buyers lawyer should ‘warn the client of the DANGERS emanating from possible insolvency of the vendor’

    It was quite clear from these remarks and from the circumstances of the case that the Protection afforded by Specific Performance is very limited.

    This particular piece of legislation purports to set out a court procedure whereby a property buyer can force a seller to obtain the necessary licences and certificates that would facilitate the transfer of registered title to the buyer.

    Bafflingly it envisaged that this can be done without the involvement of certain ‘interested parties’. Interested parties who may be excluded from the procedure, it is imagined, include anyone who holds a MORTGAGE over the property (a Bank, for instance) and the REGISTERED OWNER, if he is not the vendor.

    That is a rather surreal scenario.

    Perhaps 90% of property ‘owners’ in Cyprus are without Title Deeds. They are exposed to great risk and this disgraceful situation is because they have placed trust in people who display breathtaking greed, dishonesty or incompetence.

  • Peter says:

    @JRB – I finished paying for my property over 9 years ago and still no sign of the property being transferred into my name, meantime the developer is free to take out a second mortgage against the property without telling me.

    Worst, my friends paying by instalments were told the next one was due, which was after the walls had been plastered. A visit to the site showed this was not the case, but the developer withdrew his workforce and left the shell saying. “Well if you want it plastered it is due”. After 5 weeks my friends made the payment and the works team were sent back in. There is a point at which the developer has most of your money, so stage payments mean very little. You are between a rock and a hard place.

  • James JH Lockhart says:

    Nigel,

    Has Graham Watson MEP been informed off the Court decision? I think now he can go to the EU Commission with this.

  • @JRB – Even though you may pay the balance of your contract, the property will not become ‘yours’ until its Title Deed has been registered in your name.

    Unless you have bought a property for which a Title Deed has been issued, it may take many, many years before you can call it yours.

    According to a letter to Graham Watson MEP from the Interior Ministry that you can read by clicking here:

    “It is worth repeating that even under current legislation, buyers of immovable property are protected, once they deposit the Contract for Sale at the appropriate District Office of the Department of Lands and Surveys according to the Sale of Lands (Specific Performance) Law, Cap.232.”

    Also, in July 2009 the Interior Minister, Neoclis Sylikiotis, issued a statement that included the following:

    “Despite our determination to cut this Gordian knot with the introduction of new legislation for the improvement and reformation of the planning system, as well as the system of issuing property titles, it must be clarified here that even the current system and the existing legislation protects buyers and their ownership status.”

    You can read that statement by clicking here.

    Clearly, the Judge’s decision in this case throws doubt on both these statements.

  • Stuart says:

    Despite what the EU claims are the internal safeguarding laws in Cyprus regarding consumer protection, it is obvious that no-one gives a damn about them when it comes to property development.

    If the judiciary cannot be relied on to adhere to the internal laws either, then purchasers have no security of tenure whatsoever in what is rapidly proving to be a lawless member state of the EU.

    However, if this case goes to the Supreme Court on appeal, it will be interesting to see whether that court supports the assertion of the female judge in the O’Dwyer saga. She may well get overruled.

  • JRB says:

    It seems reasonable that just because you submit a sales contract that the property does not become yours until the terms of the contract are complete. I have just submitted a contract to the land registry office.

    I have put a 20% deposit on the property, but this property will not be transferred into my name until I satisfy the terms of the sales contract. i.e. pay the balance.

    At which time the property will be transferred to my name to do as I like. I think some are misreading the judges comment or it has been taken out of context.

  • Mike says:

    baileyboy

    Cypriot law is based on English law. However what you were conveniently not told is that property law is based on Ottoman law.

    As is now obvious to most decent law abiding foreign nationals now is that you must be totally mad to risk buying now that all, or should I say a lot, of the facts are known.

    If you wish to risk losing all your savings, or if you wish to launder money fine, go ahead & do so, but not if you are making the decision to invest your life’s savings. There are plenty of other sunnier and morally sound, ethical countries to choose from.

    We have been warned.

  • baileyboy says:

    One of my first questions when I was considering buying in Cyprus was “how does the legal system work regarding a foreigner buying property here?” I was told there were no problem as Cypriot law was based on English law.

    Another lie it seems.

  • Unbelievable says:

    @Nigel – Remember previous comments comparing a UK Log Book (V5C Registration Certificate), to a Title Deed? Proof of ownership..

    Well, I just checked my Log Book and it clearly states the following..

    “THIS DOCUMENT IS NOT PROOF OF OWNERSHIP. It shows who is responsible for registering and taxing the vehicle.”

    Does this mean the Cypriot judges ruling could carry some weight?

    If so, this will seal the fate of the Cyprus property market and as you say…another nail in their coffin.

  • Unbelievable says:

    @Nigel – This really does stink of Nepotism !

    Either that or the judge dislikes non-cypriots.

    How can Conor find out if the developer has family connections within the Cyprus law courts?

    I bet the judge studied and qualified in the UK.

    Keep on digging a deeper hole Cyprus. If you think the (stupid) English will continue to buy Cyprus property, think again!

  • Peter says:

    What the judge is saying is that you are wasting your time bothering to deposit your sales contract at the land registry, and if the value of your house goes up the developer can just sell it again from under you. But he will probably leave your name on it if the value falls, depending how he feels….Nice one Cyprus

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