EARLIER today I received the following email from Andreas Symeou – a former high ranking official at the Department of Lands & Surveys in Nicosia and one of the architects of the Specific Performance Law enacted in 2011..
(Readers who attended the Title Deed seminar organised by the Cyprus Property Action Group at the Elysium Hotel in Paphos in 2009 may recall Mr Symeou, who gave an overview of new legislation being prepared at the time).
“Title Deeds for All”: what about the 39,490 title deeds issued but still standing in the names of developers?
On your front page, one can see a photo of demonstrators with placards saying “All we need is a title deed”, “Property rights and title deeds for all” etc.
Certainly the delay in issuing title deeds is a very serious problem in Cyprus, although it has been alleviated in recent years. An equally similar problem, however, is the fact that thousands of title deeds which have been issued still stand in the names of the developers/sellers.
According to an official statement, the number of title deeds which have yet to be issued by the Land Registry is 23,417. At the same time and more surprisingly, 39,490 of the title deeds which have been issued in recent years have not been transferred in the names of the purchasers. It appears that the main reason for this abnormal situation is the fact that a lot of purchasers are not in a position (or are not willing) to pay the unreasonably high transfer fees (5-8% of the market value, as determined by the land Registry).
In two articles of mine in your site (“Transfer fee reductions could increase public revenue”, published on Tuesday 22nd November 2011 and “Transfer fee discount could be win-win for all”, published on 26th October 2013) I was arguing that a radical reduction on the amount of transfer fees would be beneficial to both the public revenue and the purchasers.
A few days ago the Minister of Interior announced that the Government intends to cut the transfer fees by up to 50%. The decision of the Government is welcomed, but the way the Minister of Interior announced it was wrong. From the moment of the Minister’s announcement, all transactions in the Land Registry have stopped, as the purchasers are waiting the passing of the new legislation. The correct action would be for the government to pass the new Law in absolute secrecy and speed so that the market would not be upset.
It is high time for the Government and the House of Representatives to act rapidly, passing a Law reducing to a minimum the transfer fees. At the same time additional discounts should be given to those purchasers appearing before the Land Registry shortly after the passing of the Law. By this simple and common sense approach both the public revenue and the purchasers will benefit within a short period of time.
Andreas D. Symeou LL.B, M.Sc (U.L.A.), MRICS
Visiting Lecturer at Neapolis University, Paphos
I called Mr Symeou and we talked about the problems people were facing and that the figure quoted of 39,490 waiting to be transferred could be as a result of a number of other issues:
- A proportion of those titles cannot be transferred to purchasers because they are burdened with mortgages and/or other impediments which the developer has failed to repay.
- Some of transfers could be blocked because the developer has not cleared his Immovable Property and Capital Gains tax commitments.
- It could also be that a purchaser has not paid the whole purchase price to the developer and the developer is refusing to transfer the property.
- It could also be that the purchaser is in conflict with the developer as the property they purchased has construction issues or is in conflict over another matter.
- Perhaps the developer is trying to extort money from the purchaser and preventing the transfer until he receives payment.
- And of course the title deed may be ‘blighted’ as a result of planning irregularities that have been legitimised under the provisions of the Town Planning Amnesty.
So there are a whole host of reasons why there are 39,490 waiting to be transferred, although those unwilling or unable to pay the unreasonably high transfer fees will account for many of them.
We agreed that the figures produced by the Land Registry only told part of the story and further detailed analysis is needed. I plan to pursue this with the stakeholders after parliament’s summer recess.