Cyprus-Forum.com

[Tim Drayton]

I know, which is why I would never buy any property from a developer in Cyprus.

I would only consider buying pre-owned new builds, to minimise this risk.

I am astonished how developers are able to obtain mortgages on parcels of land they have already sold. It doesn't make any sense!

Unless the previous owner is in possession of the title deeds, though, you are effectively assuming exactly the same risk.

[Milo]

I know, which is why I would never buy any property from a developer in Cyprus.

I would only consider buying pre-owned new builds, to minimise this risk.

I am astonished how developers are able to obtain mortgages on parcels of land they have already sold. It doesn't make any sense!

Unless the previous owner is in possession of the title deeds, though, you are effectively assuming exactly the same risk.

Worse still if the TD,s were not handed over on completion to you on purchase, and there is for instance a mortgage from the original developer on that build which could have been bulit years ago, your recent purchase then becomes after the mortgage, which is a riskier position than the vendors may have been in before you.

To quote Louise Zambartas:- Lawyer in Limassol

Are there any difficulties selling before the issue of Title Deeds?

Yes, says Louise Zambartas. HOWEVER, where a potential buyer is considering whether to take on a property where there is no Title Deed and mortgages or memos have been lodged since the first contract was deposited, then I have to say I would warn that buyer off because HE WILL have a claim behind the mortgages and memos owing to the new and later date of his contract. The only way forward would be for the bank to release the new buyer from the mortgages. Louise Zambartas also wrote, Banks will sometimes agree to this if asked to by the buyer’s lawyer.

So selling now becomes a problem.

Someone we know found by going to the LR that a mortgage was on their property, bought outright by them with no mortgage in 2005. The Developer has been courteous to them from day 1, but since they decided last year they had to sell due to a very tragic health problem, they have found out that the bank will not allow anyone other than a cash buyer to purchase the property as another mortgage would not be accepted. The cash buyer, if there ever is one, will no doubt find he will be buying a property with an unpaid loan on, in the current market the developer is no longer building, although presently solvent. How many buyers can they expect, the bank is not helping them at all. Its not their loan or problem and never was, but while others go bankrupt, banks reclaim assets, owners are left out in the cold.

As of the start of last year the loans accrued by developers amounted to €5.9 billion, the central bank has already chastised another bank since for loaning more to developers to enable them to service last years payments.

The govt must act NOW to spare any more misery for homeowners who bought in good faith.

There is a way out to safeguard owners, not one many would like, but as a similar thing happened in Ireland, they went with NAMA:-

http://www.businessweek.com/news/2010-0 ... rect-.html

[Paphitis]

I know, which is why I would never buy any property from a developer in Cyprus.

I would only consider buying pre-owned new builds, to minimise this risk.

I am astonished how developers are able to obtain mortgages on parcels of land they have already sold. It doesn't make any sense!

Unless the previous owner is in possession of the title deeds, though, you are effectively assuming exactly the same risk.

Yes, the house was built only a few years ago, and the owner was in possession of the TD. The TD has been transferred, but the bank is in possession of it as security over a loan.

So I am indeed lucky, but I was always advised to not purchase off plan or from developers.

The RoC will need to look at this urgently. They need to introduce a law that specifically states that property must be subdivided at lock down stage and before the final installments are made. That way, a TD can be issued to the purchaser on settlement.

[frogeye]

dose this apply to caves and holes in the ground also ? if so then Frodo and company down in middle earth Cyprus are in deep shit !!!!!

[wyoming cowboy]

I never understood why in Cyprus there has never been Title Insurance....where before you sign a for the property with or without a mortgage, a title search is conducted and the Title company takes responsiblity if there is a problem.

[Gasman]

The lawyers have a lot to answer for. I was offered a property recently, asked if they had their deeds. Their response was 'yes'. I asked if I could see them. They said they don't have them themselves but had 'seen them' in their developer's office (said he showed them to them!) Tried to explain that I would not be buying from them, I'd be buying from their developer and they would no doubt have to pay to get released from their contract with him (tho' I am sure the developer would have strongly suggested that they get their buyer to pay that too).

I gave up trying to explain the situation to them. They think they have properties bought and paid for and had no clue they will still be handing over thousands of pounds more before they get any deeds.

They came back to me saying they'd spoken to the Cyprus lawyer they used originally and all she said was 'you can still sell without the deeds - there is a way round it - we all meet up at the developer's office' and blah blah. They don't even TRY to explain what the real situation is.

This is the same Cypriot lawyer who acted for them when they bought originally, telling them not to worry about the limit placed on foreigners re only being able to purchase one property. That the only time they'd have to worry about it was when they got their Title Deeds! And I know a hell of a lot of other Brits who bought several properties at the same time from the same developers regardless of that rule.

Tho I believe now that Cyprus has been in the EU for more than 5 yrs they cannot enforce it under EU law - they can no longer place that restriction.

[Hazza]

My parents bought their property off-plan, having moved in just over 3 years ago. They used an independent lawyer to to all the necessery checks on the land and he also drew a contract for the develeper to sign, declaring that there is NO mortgage on the land and that there will be NO mortgage taken out.

3 Years on and they are still awaiting for their title deeds. Reason is that the garden wall at the end of the road is a foot over what it was meant to be, so until that is resolved, everyone in the street will have to wait for their TD.

My parents went back to their solicitor who gave them the option of suing the developer to buy back the property at TODAYS market value. My parents are in their 70's so they don't need the stress of moving again.

[CBBB]

dose this apply to caves and holes in the ground also ? if so then Frodo and company down in middle earth Cyprus are in deep shit !!!!!

They don't even have planning permission!

[Robin Hood]

Svetlana,

With all due respect, I think these statements are incorrect.

Firstly, the Municipality have to inspect the properties to see they have been built in accordance with Building Permit and Planning Permits, then an approach has to be made to the Land Registry who then ask the Surveys Department to inspect the properties, all of this has to be done before the original plot is sub-divided into individual Titles.

The planning office issue a Building Permit, when the property is complete the Architect prepares the documentation for the Completion certificate. It is after this that the Planning Office check that the property complies with the previously approved design and if it is, approve the Completion Certificate.

As I previously posted, the land can be subdivided once the infrastructure is completed. It is not a requirement that ALL the properties are complete, this is an oft stated misconception (No doubt started by the Developers).

However, the delays are caused by the fact that Title can not be issued until all the properties have been completed and inspected - and in some cases on large projects this can take several years. If any one property fails inspection no Deeds can be issued until the matter is resolved.

Again, the properties should have been subdivided. So this statement is only true where the Developer has retained the site as one large plot and has not bothered to subdivide.

It would be a far simpler system to manage if the Land and the structure were treated as separate entities. The Title to the Land could be transferred once the infrastructure was complete and the main plot subdivided. The final inspection and issue of the completion certificate when the property was complete, and then the property would be added to the title deed.

You would now be able to get title to each plot as a single entity. But, this comes expensive for the developer because HE would have to pay one lot of transfer fees for each plot and the purchaser would then pay another upon transfer to them. If he sub-divides when he has built every thing, then he pays NO transfer fee, because that would be paid by all the purchasers, plus all the IPT the developer has had to pay over the years he has kept them waiting.

So, I would suggest that it is the developers who drag their feet as it is their interest so to do. Although, I don’t think any Government department in Cyprus could be called dynamic????

[Tim Drayton]

Well, speak of the Devil! This very afternoon I have picked up my actual bona fide title deeds. The contract of sale was deposited with the Land Registry Office on 2 February 2005. It can be done. Courage mes braves.