Cyprus Property News for home buyers and real estate investors

Thursday 17th June 2021
Cyprus Property News logo
HomeNon-Performing LoansTitle Deed mess must be considered by troika

Title Deed mess must be considered by troika

THE NEED TO ADDRESS the Title Deeds fiasco is more urgent than it has ever been as the troika move in to sort out the banks’ non­performing loan (NPL) port­folios, property experts have said.

The Cyprus Property Ac­tion Group CPAG, said that through dealing with some terrible buyer situations, the organisation had seen much of this coming.

“As most of us have been saying for quite a while this Title Deed mess will need to be drastically addressed at some time; however the longer this action is delayed the more risky it gets for an increas­ing number of buyers due to developers’ rapidly reducing ability to service their mort­gage debts,” CPAG said.

In a document titled “The economic adjustment pro­gram for Cyprus“, the troika of lenders wants local banks to repossess homes held against non-performing loans within 18 months, opening the possi­bility that some homeowners without Title Deeds could po­tentially face the seizure and sale of their properties.

The Cyprus government, in its counter proposals to the troika, wants a five-year stay pending seizure of a property. Moreover, it proposes that owner-occupied housing be exempted from any asset sei­zures.

Whatever the outcome, it is certain that a compromise will have to be made under the bailout negotiations, which will still leave thou­sands of home buyers without Title Deeds facing reposses­sion of their properties due to developer mortgage defaults, unless the age-old fiasco is fi­nally resolved.

Spells disaster for many

“The troika’s proposal to ac­celerate loan recovery by the banks could spell disaster for many,” property analyst Ni­gel Howarth told the Sunday Mail.

“Within 18 months they could lose their homes even though they may have paid their developer in full and have been living in the property for many years.”

Howarth stressed that the news provides little com­fort for tens of thousands of homeowners who have been left without deeds by developers that used them as collateral for their own mortgages.

“We know that many people, both Cypriot and foreigners, have been duped into buying property built on land that the developer has mortgaged to the bank,” he said.

“We also believe that many developers’ loans should be considered as non-performing because they are not getting sufficient revenue from sales to service their loans.”

Furthermore, Howarth added that many banks were woefully deficient and reck­less in their responsibility to clients by granting mortgages to people that had unknow­ingly bought property on land which developers had already mortgaged.

Extent of the deceit is unknown

“But we do not know the ex­tent of the deceit, which this and previous governments have condoned by their inac­tion, but it must affect many thousands of people,” he add­ed.

“It is only when those who have bought property do a ti­tle search from the Land Reg­istry that they discover that the land on which their prop­erty is built is mortgaged. But even then they cannot find out the balance of the mort­gage as the bank treats this information as confidential.”

It is estimated that developers have sold properties without Title Deeds – the documents proving ownership – to 70,000 Cypriots and over 30,000 for­eigners, with the banks having first priority on the properties when calling loans.

CPAG claims that develop­er mortgages have now reached a staggering €6 billion.

“And developers currently in a collapsed market with limited income and unable to service this debt (and with the banks having hidden these NPLs) this ‘toxic debt’ we have been highlighting for years becomes even more tox­ic every day,” it said.

“Unfortunately, we are now seeing a possible avalanche of other creditor claims against retained Title Deeds on prop­erties paid for in full, often years ago.”

Homeowners chased by banks

CPAG said some unfortunate buyers have found out already by accident that their homes are scheduled to be sold off in order to pay off their bankrupt developer’s debts – not only to the banks but to the many other creditors, including the Inland Revenue, who have since come out of the wood­work and also lodged claims against the Title Deeds.

“And by the way, what claim does the bank now re­ally have, even over the land, when it was part of a decep­tion from the outset and has not acted properly in respect of the management of the de­veloper’s debt on that land?” it added.

CPAG also wondered what chance there was of the troi­ka either uncovering or being told the real extent of the Title Deeds mess.

“Questions do remain,” said Howarth. “How will the banks treat home buyers who are diligently making their mortgage repayments? Will the banks throw them out on the street if their developer defaults?”

“I dearly hope that the troika’s investigations will have uncovered the deceitful practices of the developers, their ‘puppet’ lawyers and the banks.

“Hopefully, in their forth­coming discussions with the government the troika will put forward measures to pro­tect home buyers from what could otherwise be their Ar­mageddon.”

Anti-Euro MP Nigel Farage says the troika’s economic policy toward Cyprus would result in wide-spread misery for both Cypriots and expatri­ates in on the island.

The outspoken MEP has pre­viously condemned the prac­tice of retaining title-deeds after the sale of a property, asking whether Cyprus was ‘a state or a bandit-stronghold?’

The Title Deed fiasco has been a constant embarrass­ment to the government and is partly blamed for the slump in the once booming property market, with Interior Minister Eleni Mavrou recently admit­ting that her office has been made aware of hundreds of complaints about deeds being sent to EU officials in Brus­sels.

The Cyprus Title Deed mess must be considered by troika


  1. If the developer as at fault, in any way for not issuing the title deeds, the law should provide for the developer to be taken to court and if necessary reprocess their homes and assets to pay for any short fall until the deeds are issued. Problem is, Cyprus as its own legal system but no justice, it is all down to who you know, ‘Koumbara’

  2. Surely the Troika MUST have been given misinformation!! They can’t seriously be thinking that the banks, who have done the lending, but failed to chase-up non-paying developers, should, with the Troika’s blessing, take away the homes of people who paid in full at the point of purchase!! And who, by the way, had no idea of their developer taking out still more loans against those same people.

    How about taking the homes of the developers who have not repaid mortgages (you know, the palaces they live in, on the backs of us who paid in all good faith)?

  3. Despite the sterling efforts of organizations such as the Cyprus Property Action Group (CPAG) and well respected websites such as Cyprus Property News, nothing has been done by successive governments to get to grips with this scandal which, together with the worldwide economic downturn, has been instrumental in crippling the property market.

    It has taken outsiders, the troika, to finally bring this scandal to the fore and hopefully force some form of resolution. Nobody else will and certainly not the Cypriot authorities. The government is ultimately responsible for allowing developers, lawyers and banks to behave in a fraudulent and reckless manner.

    Many people in Cyprus have either failed to understand the scale of the problem, have dismissed it as being inconsequential or in many cases haven’t even acknowledged that it existed.

    UKIP MEP Nigel Farage’s question as to whether Cyprus was “a state or a bandit stronghold” leaves no room for debate. In most people’s minds it’s a no contest: the latter.

Comments are closed.

Sign up to receive our free newsletter.

We guarantee that we do not spam and will not divulge your email address to any third party.

Read our privacy policy for more information.

Cyprus property transfer fees

Property capital gains tax (CGT) calculator

EUR - Euro Member Countries

Top Stories