Pay your developer’s debts or else!
People who bought property from the company operating the Froiber brand in Cyprus (A&G Property Wise Development Ltd) that went into liquidation last year are being chased by the banks and the tax authorities to repay the developer’s debts – or else!
TOWARDS the end of last month, the Greek Language newspaper Phileleftheros (Ό Φιλελεύθερος) published a story on its front page about the problems faced by those who bought property from the company operating the Froiber brand in Cyprus, A&G Property Wise Development Ltd, that collapsed and went into liquidation last year.
We have received a letter, written by one of the Froiber buyers, describing the financial demands being placed on them by the Banks and the Cyprus Inland Revenue Department referring to the Froiber liquidation article in the Phileleftheros.
Dear Sir / Madam,
I would like to refer the following article to your attention.
Monday 30 August 2010 “Ο Φιλελεύθερος”, page 3, ‘Φόρτωσαν τα χρέη στους αγοραρστές”.
The article outlines the unfair treatment of buyers of apartments sold to them by the Real Estate Developer Froiber. The unfair treatment concerns the banks to which Froiber currently owns millions of Euros (the company owns 4.7 million to one bank specifically) and them expecting the buyers to settle the loans. The unfair treatment also concerns the Inland Revenue Cyprus which also demands that the final buyers of the apartments settle taxes owed to the Inland Revenue by Froiber.
The situation has reached the proportions of
extortion since the Inland Revenue and the banks threaten the buyers that they
will not receive their title deeds of ownership to the apartments which they have paid in full already, unless they contribute a ‘symbolic amount’ of at least 8,000 Euros per apartment to the banks and a few more thousand to the Inland Revenue. The problem is that
the buyers are not receiving any protection from the law considering the fact that they were purchasing the apartments in good faith and have no responsibility or knowledge whatsoever regarding the mortgage of properties and amounts owed to the banks and IR by Froiber.
The banks have issued the loans to Froiber and it is the bank that should bear the risks of these loans. It is about time that the Cyprus legislation is updated to reflect these issues. For the banks the amounts mentioned in the article are symbolic, but to the buyers these are substantial amounts, and the banks have even gone so far as to offer loans to the buyers at “preferential terms”, so that they have a way of finding the money that Froiber owes them.
Unfortunately I am one of the buyers and I feel that this should be heard, since there are
17 blocks of flats that were built by Froiber and are facing the same problem, and we could say that they were built illegally if Froiber had no intention of settling the loans. I would like to request a program to be dedicated to this specific Froiber issue or the general title deeds and banks issue in Cyprus, since this is a big problem and the situation will be repeated in the future affecting more buyers.
I would like to propose for representatives of the various parties to be invited as guests of the program; representatives of banks, the Inland Revenue, the buyers, the government, the lawyers, the liquidator and others affected (i.e. Cyprus Property Action Group created by foreigners who bought property in Cyprus) in order for everyone to hear how these people are planning to tackle this serious issue, and exactly how the future will be affected if no action is taken for those who are already in this situation.
Lots of articles were published stating the complains of the buyers and the responses they had from banks, government and lawyers but not even one article was written with direct discussion with them and making clear their positions and what kind of legislation they base them on. Lots of lawyers are willing to discuss the problem and future outcome but when you enter their office all you hear is to pay when you are already in the situation. Their only suggestion is to consult a lawyer before buying. I am aware of the fact that you need to consult a lawyer before buying property so that I know if the land on which the property is built is mortgaged, and which I did, but the truth is that all the lands are mortgaged and the real estate developers are allowed by legislation to sell apartments for which they do not have the title deeds yet.
If someone wants to purchase a new flat, then they know that the land is mortgaged and there are no title deeds. If you want to purchase an apartment with title deeds, you need to purchase property which has been built over 10 years ago. When I was searching to buy an apartment I only could find one apartment with title deeds which was 20 years old, people do not have much options than believe that the title deeds will be issue or simply rent. Also another issue is that if you want to sell a property without title deeds you need to go through the developer, so he can cancel the contract of sale with you and enter a new one with the new buyer, in all cases developers agree to provide their signature only if they get a percentage of the selling price with the disguise of “service fee”. If you don’t agree then you cannot proceed. It is very difficult for me to understand why developers and banks are treated so preferentially comparing to the final buyer who by the end of the date face all the problems created by the previously mentioned parties and on top of that
no matter to who they turn to i.e. banks, lawyers, tax representatives the only thing you hear is just pay, without much explanation, they don’t even want to enter into conversation to explain what kind of laws allow the current situation.
I would like to be able to get an honest answer regarding this problem because all the experts are simply advising the buyers (including me) to just pay and not enter the ‘trouble’ of dealing with it in another way, the interesting thing is that none of them ever told it publicly.
My question is:
Can we actually go against the government for not offering protection to buyers of real estate in Cyprus? How far must a person go in Cyprus to receive his rights, which are so normal in other countries?
I would like to remain anonymous and for my identity to be kept secret.
http://www.news.cyprus-property-buyers. ... /id=005562?
If the large number of blocks of apartments buyers REFUSE to pay the Developers loans which they legally should, what are they going to do with them, auction all the apts off as well? Lawyers went along with this scam as well and now push buyers to pay up so nothing will be brought out into the open.
The amount owed by Developer is approx 14 million euros to the banks. No-one knows the tax bill.
It doesn't get any dumber than when a uneducated nincompoop; who made a complete dork of himself and got thrown out, returns under an even stupider guise like “666” and pats the "former user" on the back! 
