- Cyprus Property News Magazine - https://www.news.cyprus-property-buyers.com -

Legislation changes will not end Title Deed nightmare

LAST week, the Nicosia City Council circulated an email encouraging householders to apply for planning permission to changes made to their property in return for (renewed) Title Deeds. This followed on from a Ministry of the Interior planning amnesty brochure I’d received by post a couple of months ago.

The planning amnesty opens with a thousand words of gobbledygook entitled General Information, followed by Key Features of the Legislation broken down into eight separate clauses, then Town and Country Planning Law which outlines Permanent Provisions with five separate clauses followed by Temporary Provisions 1, 2, and 3, which contains sub-clauses (a, i to iv, b to d) then clauses four to 18.

If you are not totally bemused at this point you then proceed to The Streets and Building Regulation Law – Permanent Provisions, seven clauses followed by Temporary Provisions, one to 15, and finally, The Immovable Property (Tenure, Registration & Valuation) Law, clauses one to four.

Who are you trying to kid?

Come on, Interior Minister Sylikiotis, who are you trying to kid? I bet you don’t understand a word of it.

Here below are a few examples of the pitiful state of the Cyprus property market.

At the time of purchase, Mr X’s developer told him that the planning ratio in his area was 20 percent although recently, he learnt through the grapevine, that it was only 15. He immediately applied to the District Office and Town Planning Department in Limassol for a copy of both the building and planning certificates.

The District Office was very helpful and on payment of a small fee, he was given an authenticated copy of the building certificate and associated drawings, which showed that the developer had lodged false drawings.

The Town Planning Department, on the other hand, was not at all helpful, so Mr X engaged a surveyor to check the dimensions of his property after acquiring a copy of the planning permit, which also stated 15 percent build. His surveyor reported that the developer and architect had committed a criminal act, Mr X’s house having been overbuilt by 34 percent.

If Mr X decides to go down the planning amnesty route (amnesty being quite the wrong word) he will end up with “tainted Title Deeds” which will hinder the future sale of his home, although he is not required to do so since he is not yet the legal owner of the property, this making his developer liable for specified irregularities and any fines. If, on the other hand, he was to proceed down the Planning Amnesty route, there is no mechanism for withdrawal – highlighting overbuild of more than 30 percent which may require he knocks down part of the property.

Mr X then carried out an N.50 survey (developer’s assets/liabilities) and found that his developer had assigned mortgages to the bank and had outstanding debts to the Inland Revenue. If Mr X went for the amnesty, it would be like signing three blank cheques: a fine for overbuild, share of mortgage debt and share of tax debt without knowing in advance how much each would be.

Another householder wrote to me, “At the moment I’m going for the amnesty through an independent ETEK architect and I don’t want my developer to know anything about it. I have been negotiating with the developer relating to the original lease of 1998. Guess what, he produces a new sub-lease for me to sign that implies I’m leasing my own house as well as the plot. He must think I’m stupid!”

Another wrote, “Most developers build illegal properties trapping the buyer into selling the house back to them due to non issuance of Title Deeds.

“Most buyers have no idea that their properties are riddled with illegalities. It is only when they choose to add an extension or sell up that the illegalities become apparent. The amnesty is really designed to get developers and architects off the hook by transferring the financial burden of correcting their ‘mistakes’ to the per se owners.”

He goes on to say, “A renowned property journalist suggested in one of his articles that if an estate of ten houses has a developer’s mortgage of a million Euros on their properties,  they could band together and pay €100,000 each of the developer’s mortgage and hence get their Title Deeds.

“Fundamentally, almost all properties built in Cyprus are in some way illegal. Cypriots aren’t bothered because they buy the land first and he who owns the land owns what’s on it. This is not the case for the majority of foreigners, who buy from developers who ‘own’ the land.

“The amnesty says that even when you have corrected all illegalities, the property still belongs to the owner of the land, and the government can’t in law transfer the property rights to the buyer without the owners’ consent.”

Yet another wrote, “In my case, I had an independent lawyer and she did identify a mortgage on the land that was written into my Contract of Sale. I have withheld about euro 18,000 pending payment of the mortgage. What was not identified was that the land ratio was only 15 percent when it was spelt out in the contract that the house was built to 20, which would have taken my lawyer five minutes to check. I am very angry, but it seems that the responsibility for overbuild lies with the developer and the architect. I foolishly used the developer’s architect.”

Of course, there are thousands of similar examples of the chaotic and illegal meanderings of planning departments, developers, architects, lawyers and land registries – few expats own homes in accordance with planning laws and most of these homes sit on land either owned by developers or mortgaged to banks.

The present mess is irretrievable

The tardy, dishonest and purposefully complex manner in which Cyprus chooses to sell property will rebound explosively on those involved in the supply chain. Amnesty or not, it is self evident that this present mess, propounded over many years by ineffective planning departments (and the governments of the day) is irretrievable no matter how many new planning laws the Interior Ministry introduces. It is not surprising that the uptake for the planning amnesty has been very low to date.

When a major developer/hotel owner bursts into a council meeting with his bodyguards, threatening to sue all the councillors for refusing planning permission to build homes on a public beach, things have gone far too far.

The Cyprus Property Action Group is applying to the European Court of Human Rights for issuance of clean Title Deeds to all who have paid for their property in full. I wish them well and diddling developers to rot in hell.

Hermes Solomon’s book, Cyprus on the Rocks, is available from Hellenic Distribution Agency tel: 22878500