A BANK in Cyprus and the Island’s Inland Revenue Department are pursuing the clients of a property developer who has fled the Island. They are demanding that buyers repay the developer’s mortgage and his unpaid taxes.
When is the Cyprus Government going to put an end to this ‘legalised theft’. Can you imagine this happening in any other civilised country? If you were to buy a car from a dealer and pay for that car in full, would the Inland Revenue and the bank chase you for the dealer’s debts if he absconded or his company went into liquidation?
Unfortunately, this is not the way the law works in Cyprus. If your developer fails to pay his mortgage and you do not have the Title Deed to the property registered in your name, the banks will demand money from you using the threat of taking your home away from you to elicit payment.
And if your developer fails to produce a ‘tax clearance certificate’ at the Land Registry when your Title Deed becomes available, the Land Registry will refuse to transfer ownership of the property into your name.
Bearing in mind that you will have already paid for your house in full, why does the law allow you as a buyer to be penalised for the transgressions of your developer? Why does the Inland Revenue not pursue the developer for the taxes he owes? After all it is he who owes the taxes and has the money to pay; so why does the law allow this to happen?
The situation in Cyprus reminds me very much of some graffiti I once read on a wall of a gents toilet in the House of Commons. It read:
“is there any intelligent life in Westminster?”
Someone had scrawled an answer:
“yes, but I am only visiting!”
The Cyprus Government has promised to introduce legislation to resolve these issues (yawn). Whether it will remains to be seen; discussions are continuing.