Cyprus-Forum.com

[hissyfits]

Then your argument should be with those 5-10k that bought in the North. You cannot hold those that chose to buy in the South responsible.

[hissyfits]

Then your argument should be with those 5-10k that bought in the North. You cannot hold those that chose to buy in the South responsible.

[Milo]

Yesterday’s revelation about the illegal activities could have massive implications for Cyprus’ property sector and the Island’s economy. The Cyprus government may have no option other than to take effective action immediately.

YESTERDAY’S revelation that developers, estate agents, lawyers and banks in Cyprus have been continually, systematically and habitually infringing EU Directives and breaking the law could have massive implications for the Cyprus property sector and banking system.

Those involved in the sale of property will no longer be able to sell mortgaged property. As a consequence, developers will not receive the inflow of cash required to service their massive debts – and the banks will have even bigger problems than they have today as more developers will file or be forced into bankruptcy. The recent Moody’s report that the outlook for the Island’s banking system was “negative” and that the property market “remains a risk area with weak demand and unclear growth prospects” will only add to their woes.
Thousands of property buyers will be able to walk away from their bad investments and claim compensation from the banks and developers (at no cost to themselves) through the Commerce Ministry’s Competition and Consumer Protection Service (CPS). This will result in more property developers being forced into bankruptcy and will put even more pressure on the banks to keep their heads above water; some of whom could fail.
Those who have bought property since the law was passed will have an excuse not to pay their mortgages and will submit a claim to the CPS. Based on the money they paid in say, 2008, they will be able to buy a similar property at a greatly reduced price.

The maximum fine of 5% of annual turnover placed on those who have broken the law would result in the Cyprus government (and possibly the UK Government) collecting billions of Euros that could be used to finance a rescue package to compensate buyers who have been missold property. But this again would result in more property developers being forced into bankruptcy and will put even more pressure on the banking sector.

The Office of Fair Trading may discover that Cypriot companies operating in the UK have been breaking the law if it carries out an investigation as recommended. This could result in the closure of the UK offices of those companies and the banning the promotion of Cyprus property at exhibitions of overseas property held in the UK. (See Lord Jones of Cheltenham’s written question in the House of Lords and the reply from Her Majesty’s Government.)

The EU may place sanctions on Cyprus for failing to comply with the Unfair Commercial Practices Directive 29/2005/EC and possibly others.

The result
The result could be complete and utter chaos for the banking system and the Island’s economy. If the Cyprus government wants to avoid the chaos, it has no option but to take effective action immediately.

Possible solution
One possible solution would be for the government to issue a gold-plated guarantee to the European Union that no property buyer, regardless of when they purchased the property, will lose their home as a result of a developer’s debt – and issue all of those who have paid for their properties in full with a temporary certificate of full legal ownership that will remain effective until such time as a Title Deed is issued.




http://www.news.cyprus-property-buyers. ... /id=006034?

[Milo]

An article in today’s Sunday Mail Opinion column questions whether the Cypriot authorities have left it too late to repair the damage that has been done to the Island’s image abroad.


Published: November 7th, 2010

THE CRASH of the stock market, in which thousands lost their life savings or ended up with huge debts that they are still paying off today, ensured that very few people would ever again view the Cyprus Stock Exchange as a trustworthy institution. The CSE authorities may have introduced tighter controls and tougher regulations after the fiasco but, 10 years on, investing in the shares of companies listed on the exchange is still considered risky activity by the majority of people.

Once the damage is done, it is very difficult to change people’s perceptions, more so when the authorities fail to take punitive action against the culprits, professionals who knowingly misled investors with cooked accounts and unrealistic forecasts. The overriding impression created was that the law offered no effective protection to investors from dishonest businessmen looking to make a fast buck at the expense of gullible people.


THIS SAME MISTAKE has now been made in the property market, which also went through a ‘bubble phase’, attracting all sorts of cowboys, posing as developers, who saw an opportunity to make a quick profit. Most of the buyers were foreigners and therefore easy prey as they were not aware of the Cyprus laws and were not guaranteed reliable legal advice.

The results are well-known and far from flattering for Cyprus. One couple recently lost their flat, some buyers were sold properties that had already been sold, others ended up in flats without electricity and there are close to 10,000 foreigner property-buyers without Title Deeds, praying that the developer would not go bankrupt and the bank takes over their property. There has been one positive case in which owners sued a lawyer who had misled them and were paid damages in the region of €100,000.

This mess has received extensive media coverage abroad, particularly in Britain from which most buyers of holiday homes came. British MEPs have raised the issue of Title Deeds at the European Parliament, thus making the problem known across Europe. It was the worst possible publicity the struggling holiday home market could have received as it amplified the effects of the recession and jeopardised the future of many developers.

Given that government proposals on the Title Deeds issue, which also affects some 90,000 Cypriots, will solve none of the old problems, there was only one way for Cyprus to rebuild its tarnished image – taking a tough line in cases of developers deceiving buyers that were brought before justice. It was critically important to show that the law offered protection to foreigners who had been deceived by locals; the case of the lawyer who had to pay damages to his clients was a step in the right direction.

But in the last week this good work has been undone by the case of Conor O’Dwyer who had been assaulted by three men (a developer he was in dispute with, the developer’s son and an associate) and was hospitalised for a week. His three attackers were found guilty of causing actual bodily harm by the court but the judge did not give a custodial sentence. Father and son were given a 10-month suspended prison sentence while the third man was fined €3,000. The developer had also crashed his car into O’Dwyer’s but for that misdemeanour the court gave him two penalty points, instead of three that would have caused him to lose his licence.

The court’s leniency towards O’Dwyer’s attackers was quite astonishing and will not boost the confidence of foreigners in our justice system. It is more likely to encourage the view, rightly or wrongly, that the courts are not very tough on crimes by Cypriots against foreigners. To add insult to injury, O’Dwyer now faces criminal charges for posting offensive and harassing messages “without reasonable cause”, for publishing personal data and for threatening violence.

The Attorney-general may have been obliged to charge O’Dwyer after the police received a complaint, but it seems bizarre that the state would prosecute for alleged offences committed six years ago. On Friday it was reported that the Attorney-general would lodge an appeal against the court’s decision and lenient sentence in the O’Dwyer case. One prosecutor told the Cyprus Mail: The Attorney-general’s position is that nothing changes because he is British or any other nationality. Justice is for all.”

The authorities may have finally realised the damage being done to Cyprus’ image by our system’s failure to protect property buyers, but unfortunately, this seems like a case of too little too late.

http://www.news.cyprus-property-buyers. ... /id=006095?