Cyprus-Forum.com

[kafenes]

Since everyone wants to talk about the title deeds situation and I don't seem to know much about it, I thought of starting a new thread with a poll so I can learn more.

DID YOU KNOW THAT IF YOU BOUGHT PROPERTY FROM A PLAN THAT YOU COULD LOOSE YOUR HOME IF THE DEVELOPER WENT BUST?

[boomerang]

unlless you pay cash for everything don't you need a loan from the bank?...doesn't the bank check who ownes what prior to giving you a loan?

what kind of a deposit do you need to get a loan anyway?...

[Svetlana]

If you do not own the TD the bank requires you to get your developer (the TD holder) to provide a Bank Guarantee, for a Fee of course - and some will not do it anyway.

The banks used to require, normally, a 15% deposit but Central bank policy has upped that to 40% (30% in exceptional case) I think, because of falling property values.

lana

[Tim Drayton]

When I bought in February 2005, I imagined that once the contract of sale was deposited with the land registry office you would have cast iron title to the property. I was astonished to learn later that the developer, until such time as he releases the title deeds, can exploit a loophole and get a mortgage on the land that the property is built on rather than on the property itself and, in the event that the developer is unable to repay this loan, you can lose your property even though you paid for it in cash and have the contract registered with the land registry office. This is crazy.

Fortunately, in my case the transfer went through at the land registry office in February of this year (five years after the cash purchase was completed!). I believe this means that I am out of the woods as far as any risk goes, but I am still waiting for the actual title deeds to be delivered.

[cyprusgrump]

I knew...

We got our developer to add a clause to our contract stating that any mortgage on the property would be removed when the final payment was made...

He reneged on the deal and wouldn't remove the mortgage until the 'extras' invoice was also paid but we do now have assurance from the bank that no mortgage exists...

Bloody extras!

[beverley10]

We also bought in Feb 2005 Tim and are still awaiting our title deeds.We got an independant lawyer who did the neccesary searches to prove the land was mortgage free etc but at no time were we made aware that until the title deeds were issued our developer could mortgage our land the property sits on.We are keeping fingers crossed that all goes ok but it is not a happy thought that we could lose everything.This purchase was made by selling everything we had in the UK to make Cyprus our home,it was not bought as a holiday home so all bridges were burnt!So all you rather unsympathetic and racially bigoted people on here can rub your hands in glee at our foolishness in trusting your countrymen with the result of a life working hard to live a dream in our old age!We have no private pensions,my husband was a lorry driver and we could only afford an apartment so don't assume we are the "colonal blimp"type of ex pats that want to turn the island into a little bit of Surry.

[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!

[Svetlana]

The problem, Paphitis, was that a few years back when most foreigners (most wisely!) wanted to move to Pafos and there was little or no 'resale' property available. Also , most foreigners did not want typical Cypriot homes but rather, their 'dream home in the sun' complete with pool.

So, inevitably the incomers bought off plan and face the non-issue of TD we have alluded to. Most Cypriots, bought older properties or built their own on family land.

Currently, there are around 100,000 properties for which TD are outstanding; 30% of which have been bought by non-Cypriots.

Lana

[bill cobbett]

One thing (among many others) I find curious about this is that very early on in the development process the individual plots, the oikobetha, are measured and marked out on the ground and those same plot divisions are recorded in the Registry. Surely the Planning Dept doesn't give permission to build unless the plots have been marked and registered?

Surely it's a simple matter that with the initial deposit or with the first big stage payment, buyers and governemnt should insist that the developer pays off the bank, and the plot becomes the buyers and the Transfer process started in the Registry long before completion of the building.

[Svetlana]

In all the countries I am aware of you buy a property off plan or resale and get the TD on payment - 'Simples' as Grump would say.