INTERIOR MINISTER Neoclis Sylikiotis fired a broadside against the legislature, earlier this week, for delaying passing the five bills relating to the town planning amnesty. Sylikiotis had been angered by the postponement of discussion of the bills at committee level and what he saw as the deliberate delay in deputies making a decision.
He did not mince his words, accusing deputies of employing delaying tactics, “in a co-ordinated and methodical way, constantly coming up with new suggestions or proposals, many of which aimed to change or weaken every innovative proposal put forward by the bills”. The President of House was also targeted by the minister, for having gone back on his promise to arrange the approval of three of the five bills 10 days ago.
While the minister’s anger was understandable, these are complex bills which need to be carefully evaluated. The practice of House committees to ask for the views of all parties affected by a law proposal does not contribute to speedy decision-making, and sometimes it gives rise to irrational decisions. In the case of the town planning bills, after inviting developers, estate agents and an array of government officials, deputies remembered that representatives of the banks had not been invited to give their views, so another meeting was arranged.
Banks objected to provisions
Banks, which are part of the Title Deeds problem, expressed objections to certain provisions, causing deputies to look for new compromise solutions. However the chairman of the Legal Affairs Committee Ionas Nicolaou gave assurances that all five bills would be approved before the House broke up for the May elections. Whether the bills will be approved in their original form or will be changed by deputies to satisfy interested parties remains to be seen.
Bills do not strike a balance
Nicolaou’s claim, a couple of months ago, that “we aim to strike a balance between the rights of the buyer and the seller, but also guarantee the rights of the mortgagee”, was not likely to inspire much confidence. What balance needed to be struck? Surely after the property fiasco which has left around 100,000 foreign home owners without Title Deeds and wrecked Cyprus’ reputation abroad, the legislators should have one objective: to guarantee the legal right of a buyer to be handed a Title Deed as soon as he pays for a property. How is allowing a seller to carry on using a property he has sold, as security for his bank loans, a case of striking a balance?
The government, to its credit, has tried to address the problem with its bills, by stipulating big fines for delays, omissions or fraudulent information in documentation required for obtaining a Title Deed, but has it gone far enough in protecting the buyer? We mention this because legally protecting the buyer is of critical importance to gradually restoring Cyprus’ tarnished reputation and kick-starting the stagnant property market.
Hundreds of holiday homes remain unsold, despite prices being slashed, because potential, foreign buyers have been made aware of the Title Deeds fiasco. A sound legal framework, ensuring the immediate issuing of Title Deeds, combined with attractive prices could re-kindle foreign interest and put in motion a small property market recovery that would benefit the economy.
Government aimed to collect revenue
Unfortunately, this was not what the government set out to achieve in drafting the bills. Its main objective was to collect funds through the town planning amnesty, because revenue from property transactions had hit rock-bottom. Under these provisions, people, who had not secured final approval for their flats or houses because of building permit violations, would be entitled to pay a fine to the state and secure the approval necessary for the issuing of Title Deeds. When the deed was issued transfer taxes would be paid to the state.
Securing Title Deeds will be expensive
But will people take advantage of the amnesty to secure Title Deeds, which will be a costly exercise? Many Cypriots, especially those not planning on selling their property, would most probably prefer to wait a few more years for a Title Deed rather than pay thousands of Euros in fines and taxes to have one issued, at a time of economic uncertainty and tight money. This may also explain why deputies are not in a big hurry to approve the town planning bills – there is no public pressure apart from the agitating by the impatient minister.
The irony is that the big problem faced by the people who have been pressuring the government for action – the 100,000 foreign property-buyers without Title Deeds – would not be solved by the eventual passing of the bills. There is no obvious or easy solution to that problem, which is why the government has focused on formulating bills that would raise state revenue.
Gavin, you’re probably right.
However, someone on this forum, in answer to an earlier thread said, “I’m very optimistic and positive that the Cypriots will continue to protect their own interests at our expenseâ€Â.
Bear with me on this, conspiracy theory as it may be (and obviously assuming that the Cyprus government is capable of this long-term thinking):
The developers have big debts for which they will not be held accountable and we are allowed to pay these off for them (thanks House of Deputies, by the way), including fines, etc, plus actually finish off the projects as well. They won’t go to prison either, so all that will happen is they have a black mark against their names from the banks.
The banks are owed lots of money that they will never see again (unless of course we the Expats do pay off the developers’ mortgages).
Two possible scenarios:
1) We pay off the developers’ mortgages. Technically the developers do not have bad credit with the banks as the loans are cleared. There is thus no downside for them at all.
2) We don’t pay off the mortgage, the banks seek a bail-out (if the EU doesn’t, the Cyprus government WILL). Where will they get the money from? IMF, possible revenue from the gas reserves now about to be exploited? The upmarket end of Russian property market (still being targeted with marinas, golf courses and other assorted nonsense)? Who knows?
If any of the bank refinancing methods do not conform to EU standards, hey, can always leave the EU (as according to Cyprus newspapers, Cyprus is a net contributor. I had to laugh when read that).
If we follow through on scenario 2), what happens to us, after we’ve defaulted on the developer’s mortgage? Our properties get reposed by the banks. This non-performing housing stock needs to be sold: who do you think the banks will sell it to? Correct, their property developer mates.
Credit ratings agencies will downgrade Cyprus to junk status, however an injection of money (from above sources) could change all that in a matter of months.
The EU could take action but does it? Will it? And what will that action be – more fines?
The reason the proposed legislation strikes a balance between the rights of the banks and the developer and the rights of the banks and the developer (and we are forced into the Sophie’s Choice of either paying for the executioner’s bullets, as mentioned by a previous poster, or lose everything we’ve invested here) is because we simply do not matter. The ownership of everything goes back to the people who started with it and a fresh wave of people (gas workers, investors from Israel, Iran, Russia again but more upmarket ones this time) will arrive to go through the same as we did.
We have been caught by the short and curlies in a well-orchestrated pincer movement and it is all very deliberate.
Maybe the focus will change away from residential property, but, in the words above, “I’m very optimistic and positive that the Cypriots will continue to protect their own interests at our expenseâ€Â
Very well put comments below.
Now we have got off our chest, now is the time to put pressure via our Euro MPs.
You pay their wages make them earn it. Complain to them, Developers, lawyers, Banks, estate agents, etc etc.
If you don’t not much will change.
Andrew.
Beautifully put.
I laughed and despaired at the same time…
They expect you to pay the developers bills. They expect you to finish the project yourself .They expect you to pay the developers fines. Then they expect you to pay the developers mortgage.
Then , if you have any money left they expect you to take the developer to court, with the aid of the corrupt lawyers who got you into the s??t in the first place.
Welcome to Cyprus!
Odd_Job_Bob – Cyprus can’t continue like this forever and a day.
You can fool some of the people most of the time and most of the people some of the time, but not all of the people all of the time.
Take a look at Cyprus economy 25yrs ago. It was OK but nothing special. Most Cypriots lived a humble life and some had a very good standard of living.
Without the mass housing industry, Cyprus cannot continue this lavish life style.
Plumbers, Electricians, Builders, Carpenters, Glaziers, Roofers, Painters, Stone masons etc.. will all be competing big time for work. Some will have to change their trade as the island is very small and can only accommodate (sustain) so much trade.
Take a look at Spain as a good example. Hundreds of unfinished housing projects just crumbling in the wind.
The Cypriot banks are going to have a few sleepless nights this year and next !
I’ve been saying this all along. The Developers & Lawyers are being given sufficient time to stash the cash before they start declaring themselves
BANKRUPT – BANKRUPT – BANKRUPT
Go on Gavin! Not possible to put it better myself!!
I did try, but gave up…
Not RIP Cyprus though. They’ll just carry on doing what they’re doing…
These bills were in my opinion never designed to help victims but rather protect the guilty and inflict more pain and cost on the victims.
Why The Minister is get so agitated about these Bills not proceeding is beyond me. Any reader of this Site could have told him months ago that they were never going to happen. Why? Because they prefer the staus quo and the elite would rather see the whole of Cyprus suffer rather than make things right and resolve the title deed fiasco/fraud once and for all.
Too few people have too much to lose.
The internet and general word of mouth have scuppered any form of recovery for the Cypriot property market and the tinkering being peddled by the Interior Minister is a waste of his and everybody else’s time: we know it even if HE doesn’t.
As for the Attorney General and his august band of legal ‘practitioners’ (thieves?), I and countless numbers of others have more than said our respective pieces and exposed the endemic corruption that has become de rigueur. We’ve reached the end of the proverbial line and as far as expecting to receive any likelihood of REAL justice is concerned, forget it. What the Deputies (the majority of whom are lawyers) are doing is nothing more than crude filibustering.
The game’s well and truly up. Conniving chicanery has become a way of life and the only ones who remain to fight the Cypriot corner are the perennial Quislings and shrinking band of fantasists who cling to the apologist line.
RIP Cyprus.