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Article by: Sam Orgill info@proactpartnership.com Published: 09/11/2008

A new pressure group is being formed against one of Cyprus’ biggest developers to highlight problems regarding the issuance of Title Deeds.

A new pressure group is being formed against one of Cyprus’ biggest developers to highlight problems regarding the issuance of Title Deeds.

“The disgruntled ex pat buyers are complaining that they have been waiting years to receive their Title Deeds from developers, which , for a variety of reasons, have not issued them to their buyers”, says Sam Orgill, Managing Director of ProACT Partnership, specialists in advice to expats.

The pressure group along with other similar bodies are concerned because most buyers in Cyprus do not own their properties for up to 10 to 15 years and in some cases possibly up to 30 years after purchase. This is because an inadequate legal frame work to regulate developers and land sales has been compounded by poor legal advise and contracts of sale drafted by local solicitors.

According to a source, to tackle the problem, “Cypriot developers have record mortgages of over 400 million euros in a relatively small market. This is an extremely risky situation for buyers as, if their developer defaults, they can lose their property which they have already paid for in full, to the lending bank.

We think this situation is a national scandal as most Cypriot buyers are also in the same trap.”

CPAG recently took the matter to the Cypriot Minister of Interior, Neoclis Sylikiotis and the Minister of Commerce, Industry and Tourism, Antonis Paschalides, in the first of a series of meetings outlining the problems facing property buyers in Cyprus.

As a result the Minister told CPAG that the boom on the island over the past decade has allowed issues to surface however he would do his best to push through new legislation clarifying Title Deed concerns by the end of the year. (2008). He also added that various meetings had taken place with the Land Registry to facilitate the new laws and that extra resources would be called to aid with the transition.

Added Sam, “The issue of Title Deeds has been thrust to the surface of debate as economic conditions have heightened concerns over Paphos and the financial stability of banks and developers.

Cyprus is a victim of its own success, over the last 10 years transforming resorts like Paphos from historically backward to thriving, modern resort locations.

Cyprus is going through a lot of exciting changes not least the building of a major international marina in Paphos and Limassol aimed at attracting high end visitors and investors. Therefore it is essential that the difficulty of ownership is overcome as quickly as possible before there are major problems in the housing market”.

Everyone blames each other but the essence is poor regulation and vague laws.

Building permits and regulations are tied to transfer of the title deeds meaning the Cyprus land registry is swamped with transfer applications that can take up to two years to process.

Developers use these rules to delay completion of a development so they can keep the title deeds longer as security for mortgage finance and overdrafts. But also it puts them in a powerful position when the new owner wants to sell or dies. The developers then attempt to apply to buy back the property at below market rates or charge a cancellation fee of up to 20% of the sale price.

All this could be prevented with strong contracts of sale. Unfortunately local practice is for buyer and seller and as a result, strong water tight contracts are the exception.

Against all this, contracts of sale are guaranteed by the Cyprus government to ensure title deeds are transferred to the buyer. Unfortunately the laws don’t say when and redress is a slow and expensive process.

Concluded Sam,” We always recommend professional expatriate advice before signing any contract of sale in Cyprus. This includes an independent solicitor from outside Cyprus. ProACT’s UK lawyer Gareth Fatchett from Shakespears Putsmans solicitors in Birmingham says,’ the old saying ‘Caveat emptor’- let the buyer beware – is the advice we give, always take independent legal advice when buying overseas property.

Because of the current unrest over Title Deeds we are offering a free review for anyone anxious about the situation.”

ProACT Partnership (00 357) 26 819 424 info@proactpartnership.com

ProACT Partnership offer professional expatriate advice to expat family and business living, working retired or investing in property abroad covering tax returns and rebates, making a will, trusts and estates, investment and pensions. ProACT offer free reviews and seminars in Cyprus & the UK on the topics contained in this article or for more information;

Sam Orgill

Tel: +357 26819424

Contact us at info@proactpartnership.com

Or see www.proactpartnership.com

 

External Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=184

Article Link: http://www.property-partnership.com/overseas-property-guides/overseas-property-guide.cfm?id=184

Please contact the author at info@proactpartnership.com for more information.

 

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