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Forty thousand non-Cypriots caught in Title Deed trap

Despite government efforts to speed the issue of Title Deeds, the number of non-Cypriot buyers waiting for their deeds continues to grow and now stands at more that 40,000 according to the Department of Lands and Surveys.

NON-CYPRIOTS have purchased more that 51,500 properties since the start of the millennium, but fewer than 11,500 Title Deeds have been transferred, despite government efforts to speed up their issue.

Source: Department of Lands and Surveys

When we last reported on the impact of these delays in October 2008 (see Title Deeds delays affect 30,000 non-Cypriots), there were 29,949 Title Deeds outstanding for properties that had been bought by overseas buyers.

To address the delays in issuing deeds, Interior Minister Neoclis Sylikiotis set up special team made up of senior officials from each of the relevant departments of his ministry in 2009. This team was charged with overseeing teams of officials in each of the Island’s districts that were monitoring progress on the Title Deeds question.

But despite the efforts of Mr Sylikiotis and those of his team, that figure of 29,949 had risen to 40,170 by the end of November 2011. Moreover, it appears that the problem is getting worse as the gap between the number of properties sold to non-Cypriots and the number of Title Deeds transferred to them continues to widen.

Source: Department of Lands and Surveys

Footnote

THERE are almost certainly more than 40,170 properties purchased by non-Cypriots that have yet to have their Title Deeds transferred:

The information published by the Department of Land and Surveys does not include statistics for properties purchased before the year 2000. I personally know a number of people who bought property in the 1990s, the Title Deeds for which have yet to be issued.

Property transfers are not restricted to sales. For example if one partner in a property dies, their share of the property will be transferred to their heirs or beneficiaries – and an elderly couple may transfer a property to their children in efforts to reduce their inheritance tax liability. Also, properties can change hands without there being a written contract of sale.

Readers' comments

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  • Pete says:

    I heartily agree with the comments below and will certainly endorse copying VP Reding on the details. There are people with whom I’ve spoken who firmly believe we’re “being kept here” to prop up what’s left of the Cyprus economy. When one considers that income from pensions amounts to circa €125 million year in, year out, it’s a regular source of income that might otherwise be denied and certainly many I speak with would leave the island tomorrow if they could.

  • Costas Apacket says:

    Nigel, a Happy New Year to you.

    Regards your last post, I still think that your findings should be passed onto VP Reding and a question should be asked of Mr Sylikiotis.

  • Peter says:

    In the meantime my developer is being charged 9% p.a. because he’s not paying anything on my property, and he will pass this 9% on to me with his bill for 10 years in 2012 for me to pay. And I can only claim back a few years tax leaving me seriously out of pocket.

  • @Costas Apacket – unfortunately, I cannot tell from the figures why the more deeds are being transferred to Cypriots.

    But more Cypriots buy property than foreigners so you would expect there to be more transfers.

    I know that some do not bother with a written contract of sale and this has the effect of reducing the number of property sales because this figure is the number of property purchase contracts deposited at the Land Registry.

    And as you say, some of the transfers will be for land and other property for which a Title Deed has already been issued. (Indeed if you were to buy a plot of land that already has its Title Deed, you could transfer Title immediately).

    One of the hold-ups for non-Cypriots used to be getting the approval from the Council of Ministers. This is not an issue now for EU citizen, but it could slow down the transfer of titles to non-EU citizens.

  • Costas Apacket says:

    Nigel, just had a thought.

    Could the ‘remarkable differences in speed’ of title deed issuing be down to Cypriots just purchasing land only and therefore getting their title deeds more promptly, or can you tell from the figures if title deeds for property is involved?

  • @Costas Apacket – Yes, your earlier comment was edited.

    Please read and adhere to the comment guidelines in future.

  • @Gavin Jones – Unfortunately, the publicly available statistics from the Department of Lands & Surveys do not show the reasons for the delays in transferring titles. There may be a number of reasons:

    Property developers not clearing their loans on the land on which they’ve built properties and which they’ve subsequently sold to unsuspecting buyers.

    Bureaucratic delays in the Land Registry and other central Government and local Government departments.

    Planning infringements caused by property developers deviating from the various permissions and permits issued for the construction of their developments.

    Planning infringements caused by those who have bought property and made changes to it without the required permits.

    Some people may be unable to afford the transfer fees.

    And there will be the idiots who cannot be bothered to get the deeds as they do not consider them to be important.

    Waiting for Council of Ministers approval. Although this permission is no longer required for EU nationals, delays in obtaining permission will hold-up the transfer of title to non-EU citizens.

  • Costas Apacket says:

    Nigel, Very Well Done That Man!

    Your investigations seem to have uncovered some figures which appear to be agreeing with the deleted last paragraph of my original post from December 29, 2011 at 2:35 pm, which unfortunately was edited out.

    This is where I suggested that some cynical Non-Cypriot property ‘owners’ may come to the conclusion that there is something, let’s just say, Non-PC going on here in Cyprus regards the issuing of Title Deeds to non-Cypriot EU citizens and other foreign property ‘owners’.

    EU Vice President Reding should definitely be made fully aware of your findings as a matter of urgency!

    Maybe Mr Sylikiotis should also be asked in an open letter from you why he thinks these figures point to some kind of, let’s just say, social favouritism?

    Of course, like I said in my original post, I couldn’t possibly comment on these potential conclusions or suggestions of unfairness!!!

  • Gavin Jones says:

    As a postscript to my comment yesterday at 7.20 p.m., I think that it’s important to differentiate between (a) the Stone Age practices of the Land Registry Dept. which delay the issuance of title deeds and (b) the clandestine developer mortgages on the land which make the acquisition of said deeds by unsuspecting property buyers academic.

    Are figures readily available or is this a statistic too far? (Any thoughts/information on this, Nigel?).

  • Denton Mackrell says:

    Nigel, I do hope that you will be sending your data and analysis directly to MEPs and Commissioner Reding.

    @Steve. I agree about those who saw buying in Cyprus as purely an investment. However, of all the hundreds of ex-pats I have known over the past 8 years who have bought property in Cyp, I cannot think of one who does not use it as their only or primary residence.

    Another hypothesis for why the deeds issuance backlog continues to grow: maybe the govt has decided to write off the Cyp property market, so it has no motivation to speed up the process. If it were truly backing the industry it would be moving heaven and earth to get the backlog cleared.

  • @Steve – thanks for your (and everyone else’s) comments.

    I have been analysing the statistics produced by the Department of Lands and Surveys and there appear to be some remarkable differences between the speed at which Title Deeds are being transferred for Cypriot purchasers compared with foreign purchasers. I do not have a complete picture yet, but:

    The number of Contracts of Sale deposited by Cypriots between 2006 and end Nov 2011 was exactly 76,000.

    However, the number of transfers to Cypriots over the same period was 105,976.

    Although I appreciate that many Cypriots do not deposit written contract of sale, the difference between the two is remarkable!

  • Steve says:

    When I look at the sales numbers I see a somewhat different picture. The figures for 2000 – 2003 are quite similar overall to 2009 – 2011, in fact sales trebled from 2000 to 2001, which is the largest percentage annual increase in the 12 years covered by the table. The much higher absolute sales figures for the mid – 2000’s were paralleled by a property boom in the UK that was fuelled by cheap mortgages and daily doses of brain washing by low-budget TV programmes about how to make a killing in the property market, plus the usual talking up of the market by vested interests like estate agents and the press, who like the property advertising revenue. However, like the previous bubble in the late 1980’s, this UK property bubble burst, the TV programmes vanished because no one believed them any more and a lot of property owners, all with title deeds, lost a lot of money. Maybe there’s a pattern here too as well as some consequences for the Cyprus market.

    The moral of the story could be that if you want to invest in the property market, don’t buy a home you are not going to live in, buy some property unit trusts. You can sell in three days if you choose to.

  • jon frazer says:

    The non-issuance of title deeds has the (perhaps unintended) effect of keeping an awful lot of people here who would otherwise be off elsewhere.

    Of the expats who I know, I would say about 25% would leave Cyprus if they could. (I.e, had their title deeds, and could sell without a drastic loss).

    This translates to around 25,000 people. (Two per household). If one assumes their average input to the Cyprus economy to be around 10,000 Euros per year, this is an income of 2.5 billion Euros per year.

    In a small economy such as Cyprus, and in these difficult times, I would imagine that is useful cash. (Like the input into the Cypriot economy of the SBAs).

    I’m not suggesting these hostages with chequebooks are being kept here by some masterplan; simply that by doing nothing (except prevaricating and telling a few porkies), the authorities can hang on to this guaranteed source of income for years!

  • Mike says:

    G J Gill has, I think, summed it up accurately. We send numerous delegations of people overseas to investigate best practice procedures in order to bring back more efficient and productive ways of working but all we ever seem to receive are mountains of shopping bags.

    Past experience tells us that the authorities will convince the EU commissioners that there is in fact no problem and no doubt will also try to convince them that perhaps the rest of Europe should be following Cyprus’ model – such is their firm belief of being right and that those wanting title to their property are serial moaners who if were not moaning about title deeds will be moaning about something else.

    The frightening thing is that being so close to Cyprus taking up the rotating presidency it is likely to be accepted as a reason in order not to rock the boat cum gravy train.

  • G J Gill says:

    What can we expect from the titles office that looks like a shambles on speed? The last time I visited their office Larnaca I was amazed that in this 21st century you could see such a shambles. Hardly a computer in sight and the only one that was evident pre-dated 1985, brown paper files scatted all over the floor. The only staff moving with any conviction were those distributing coffee and sticky cakes. People waiting to be served? the usual Cypriot bun fight! Why can’t they grasp the simple action of having a numbered ticket dispenser and a display showing who is next to be served? Instead it is barge, push, elbow and something resembling a rugger scrum to push their way to the counter.

    The EU won’t take any action and the corruption will continue with the Monty Python mob that is “Running” the country.
    G J Gill

  • Gavin Jones says:

    Costas Apacket.

    Your reference to EU Commissioner Reding is apt.

    Any immediate, potential possibility of solving the ongoing title deed scandal lies with EU Commissioner Reding. On that score, all who’ve suffered as a result of the blatant corruption associated with this saga will have to wait until next month when a reply to the EU memo is expected. (Yes. We know it’ll more than likely be ignored by the Cypriot authorities but we have to go through the motions).

    I only hope that ultimately the EU won’t do a body swerve like the Arab League monitors appear to be doing in Syria by saying that all is hunky-dory and that the Interior Minister and his lieutenants are doing sterling work in rectifying the situation.

    I’m also sure that the Cypriot government will try its utmost to deflect attention away from this issue by trumpeting the news regarding potential offshore gas revenues, a tactic which is standard fare for governments under pressure.

    Cyprus will have to be bludgeoned into dealing with this scandal and I sincerely hope that the EU won’t be found wanting in enforcing the rule of law.

    The jury’s most definitely out.

  • Costas Apacket says:

    So there is much less work for the District Lands and District Planning offices to do because the number of sales contracts being lodged and the number of properties being built has dried up to a trickle over the last 2 years.

    There have also been ‘special’ teams set up to improve efficiency of the issuing of Title Deeds.

    In addition there has been a planning amnesty followed by another planning amnesty followed by all manner of other complicated schemes to get people to buy property or to pay off their Developers debts, and yet despite all of this, between 2008 and 2011 the number of outstanding Title Deeds for Non-Cypriot ‘property owners’ has increased by circa 35%.

    Are you taking note here Vice Pres Reding?

    Do you notice a pattern here?

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