Cyprus-Forum.com

[stuballstu]

The following article is in the Financial mirror.

03/05/2006
www.financialmirror.com

No money to pay potentially huge claims


The government’s decision decades ago to treat Turkish Cypriot properties in the government-controlled areas as effectively having zero value could come back to haunt it in the coming years if it finds itself liable for both decades of loss of use and compensation at today’s market value, the Financial Mirror has learned.

According to legal expert opinion, a whole nest of property cases could be brought against the government on human rights grounds by Turkish Cypriot property-owners.

Moreover, this would be a separate issue from any other potential court cases relating to Greek Cypriot property in the north or other property in the British Bases.


Law of necessity has already been dealt a huge blow


One of the main messages from our sources is that it doesn’t really matter what the current law of the Republic of Cyprus says. What matters is whether it is in accordance with the European Convention on Human Rights.

Moreover, there is no connection in law between the violation of property by one person and the fact that this person’s property is being violated elsewhere.

These princples are particularly relevant with respect to the law of necessity, a principle used by the Cyprus government to deal with the unusual situation on the island. But the law of necessity has also had important consequences for human rights and was dealt a huge blow in the Aziz case.

In June 2004 Cyprus lost a case brought by Ibrahim Aziz, a Turkish Cypriot living in the south, to the European Court Human Rights. The Court judged that the Republic of Cyprus was in violation of the right to free elections and the prohibition of discrimination by not allowing Aziz to register on the electoral roll. (Under the Constitution, Greek Cypriots and Turkish Cypriots are supposed to be registered separately.)

Just a few months later in September 2004, the Cyprus Supreme Court judged in favour of Arif Mustafa, a Turkish Cypriot residing in the south for several years, who wanted to move back to his property.

The government withdrew its appeal in February 2006, when it became clear that it would lose the case.

After the Greek Cypriot refugees living in the property were rehoused, Arif Mustafa became the first Cypriot to have his property restituted after the division of the island.


Various scenarios

Once the principle is established that individual human rights override the law of necessity, a whole raft of uncomfortable scenarios are possible, according to our sources, with potentially huge consequences for government finances.

These include:

*A Turkish Cypriot sues the government for building on his land. He sues first for loss of use, in the form of rental income at market value for decades, plus inflation, plus interest. He also sues for compensation for expropriation. Compensation for expropriation is normally paid at market value on the day of expropriation. No doubt interest on that compensation is payable afterwards.

*A Turkish Cypriot sues a Greek Cypriot who has built on his land that has not been expropriated. (According to our sources, more than 5,400 Greek Cypriot families have built houses on Turkish Cypriot land that was not expropriated.) The Greek Cypriot, who was encouraged to build on the land by the government, asks to be indemnified against the government. In other words, the government pays the damages. The damages, as above, come under two heads: rental income at market value since 1974, and compensation for the expropriation. Since expropriation has not yet happened, it will be valued at today’s market value, which will rise every year.

*A Turkish Cypriot refugee sues a Greek Cypriot refugee for trespass on his land (or other way round of course). Trespassing is a criminal offence, implying that the police will have to be involved.

*A Turkish Cypriot refugee charges the government a 6-month hotel bill because the government insists on six months of residency in the government-controlled areas before the Turkish Cypriot can get his property back.

*A Greek Cypriot or Turkish Cypriot sues the government for not allowing him to register his sale (transfer of title) at the land registry. Currently the government will only allow sales of Greek Cypriot refugee property between members of the same family.

*A Greek Cypriot refugee sues a Turkish Cypriot refugee for trespass and using the principle in the Orams case, forces the sale of the Turkish’ Cypriot’s land in the south to pay his compensation.


Where’s the money?



If enough of these cases were brought to trial you can see why questions are now being asked about the government’s unfunded liabilities and whether any of this is taken into account when calculating the budget deficit according to Maastricht criteria.

Just looking at the potential liabilities for loss of use (ie excluding any claims for expropriation), Stelios Orphanides, writing in this Sunday’s Politis, made a rough estimate of CYP 1 bln (13% of GDP).

It is clear that this money will have to come from the taxpayer.

Our legal source explained that after 1974, Turkish Cypriot property, amounting to some 400,000 donums (555 million square metres), was in effect used as a policy tool to cushion the effects of 1974.

Thus, property was handed over at little or no value to Greek Cypriots who themselves had fled their own homes.

Although this was done with good intentions, it had an unfortunate consequence: because the property was treated as having no value, it was not managed at commercial value.

This is one of the reasons why the Guardian of Turkish Cypriot Properties, the public body set up in the early 1990s to handle Turkish Cypriot property, is running an annual deficit (once unpaid rent is taken into account). No one knows how big its accumulated debt is.

People are now beginning to ask how one can manage all that property and come up with a deficit.

Of course, the market did work in a way. It is known that some refugees rented a property from the government at a minimal rent of, say, CYP 1 per month, but then rented it on at market value, of say CYP 550 per month.

When the day comes that the Turkish Cypriot wants compensation for loss of use, the Turkish Cypriot will be entitled to market rent, so the government will have to find another 549 per month plus interest.

But since the Guardian fund is in deficit, it is the Cyprus taxpayer who will be called upon to pay.


Fiona Mullen

[stuballstu]

Any thoughts on the above article?

[GreekCypriotGurl_UK]

typical Turkish Cypriots want there homes back in the south but they dont want Greek Cypriots to have there homes back they have a nerve if they want there homes back so badly why dont they just ask the turkish settlers to leave and the turkish army to leave so greek refugess get there homes back and also they as well get there homes back but no they want there homes in south Cyprus and still want greek Cypriots not have there homes back they want it all they probably try and make a excuse for turkey to take all of Cyprus oneday shame some people on here cant see

[Rude Gal]

Any thoughts on the above article?

South Cyprus going bankrupt if all TCs sue?

Hopefully a few more GCs will wake up to fact that their side also has much to answer for when it comes to the land/property issue.

[Piratis]

Hopefully a few more GCs will wake up to fact that their side also has much to answer for when it comes to the land/property issue.

Will have to answer what?

Greek Cypriots, the 82% of Cypriots were forced by the Turkish army to the 63% of land, while the Turkish Cypriots who are the 18% grabbed the 37% of land. This is something illegal forced by Turkey and TCs.

If TCs sue, then RoC will sue TCs for all their illegalities during the last 32 years. Have you paid your taxes to RoC Rude Gal? Have you met your responsibilities as a RoC citizen? Have you acted in any way illegally according to RoC laws?

TCs should realize that they can not choose between legality and illegality whenever it suits them. We would be more than glad to return to them all their properties and give them compensations etc as long as they do the same. However as long as they insist on illegality they should realize that such a choice has consequences.

[Rude Gal]

Piratis, for me RoC is as illegal as the TRNC you complain about. It is not as 1960 Constitution intended and you know it. The fact that, due to way world politics operates, GCs have had de facto control over RoC for 42 years and also enjoyed international acceptance of this does not make it any more palatable/acceptable/legal to me.

And before you go on to your regular drivel, if it was soooo acceptable to rest of world, they would not be bothering about TC needs/rights or a "solution", they would just back up everything the RoC did. Which they are not - especially recently. Why?

The world is waking up to fact there are 2 sides to this story/conflict, just like there are innocents on both sides you have/are suffering, just like both GC and TC authorities have to face the music for the property issue. I know tons of TCs all lined up in varying stages of sueing GC controlled RoC. The whole land law suit biznes was a massive GC own goal - just as the Cyprus Mail predicted months ago and as will be borne out by developments in future...

[Piratis]

Piratis, for me RoC is as illegal as the TRNC you complain about.

For me the house next door is mine. Can I go rob it now?

It is not as 1960 Constitution intended and you know it. The fact that, due to way world politics operates, GCs have had de facto control over RoC for 42 years and also enjoyed international acceptance of this does not make it any more palatable/acceptable/legal to me.

For the 32 out of the 42 this is done mainly due to your fault.

And before you go on to your regular drivel, if it was soooo acceptable to rest of world, they would not be bothering about TC needs/rights or a "solution", they would just back up everything the RoC did. Which they are not - especially recently. Why?

The UN has several resolutions that Turkey ignored. The reason we negotiated anything beyond that is that no country had the will to sacrifice its own people to force Turkey out of Cyprus. If we wanted we could stick to the initial resolutions of 1974 and negotiate nothing. It was our right. The fact that we were forced to negotiate and make compromises does not mean that your demands had any legality.

The world is waking up to fact there are 2 sides to this story/conflict, just like there are innocents on both sides you have/are suffering, just like both GC and TC authorities have to face the music for the property issue. I know tons of TCs all lined up in varying stages of sueing GC controlled RoC. The whole land law suit biznes was a massive GC own goal - just as the Cyprus Mail predicted months ago and as will be borne out by developments in future...

I have not said that only GCs suffer.
What I said is that you return to us what belongs to us and at the same time we return to you what belongs to you. After all you keep from us more than twice as much as we were forced to keep from you.

What you say to us now is: "Ours is ours and yours is ours again"!

[Kifeas]

I have not said that only GCs suffer.
What I said is that you return to us what belongs to us and at the same time we return to you what belongs to you. After all you keep from us more than twice as much as we were forced to keep from you.

What you say to us now is: "Ours is ours and yours is ours again"!

It is not just more than twice as much, but area wise is almost four times as much. It is about 210,900 hectares of G/C ownership in the occupied north vs. 58,200 hectares of T/C ownership in the south. It is the properties of 185,000 G/Cs originating from the north vs. the properties of only 55,000 T/Cs originating from the south. Value wise the discrepancy gap is even higher, mainly due to the fact that the largest portion of the G/C properties in the occupied north is situated around the 50% of the total coast line of Cyprus that is now in the occupied areas. In 1974, value wise the discrepancy was in the range of 1:13. Now, after the rise of property prices in the south, the value discrepancy is in the range of 1:8.

If according to the above article, the RoC owes 1 billion of compensations to the T/C community for the loss of use, then, with the same logic, Turkey owes at least 8 billion to the G/C community for the loss of use of their properties for the past 32 years.

[Kikapu]

Just a question on was written in the paper. Is it to my understanding that the return of property/compensation claims by the TCs from ROC is because ROC has to fulfill it's obligations under the EU regulations on human rights and the rest. Since the ROC chose to go into EU alone without the TCc by voting NO, on the re-unification referendum, and being the only recognised government, it can then be legally sued by thy TCs. Had the vote was a YES on the reunification, then the TRNC would also had to comply by the

[Kikapu]

Just a question on was written in the paper. Is it to my understanding that the return of property/compensation claims by the TCs from ROC is because ROC has to fulfill it's obligations under the EU regulations on human rights and the rest. Since the ROC chose to go into EU alone without the TCc by voting NO, on the re-unification referendum, and being the only recognised government, it can then be legally sued by thy TCs. Had the vote was a YES on the reunification, then the TRNC would also had to comply by the

Sorry, I pressed the wrong key. As I was saying,..then the TRNC would also had to comply by the EU rules. If this is the case, I would suggest for the GCs to hold another referendum on the reunification to give the GCs the same right to sue for their property in the noth from the trnc.