Cyprus-Forum.com

[nhowarth]

Due to popular demand, I'm back on CyBC radio 2 tomorrow evening at 19:00 hrs - doing a phone in program on property issues with Rosie Charalambous.

You can listen to my dulcet tones on 91.1, 92.4, 96.5 and 94.2 MHz FM.

If you have a question, why not give me a call. Tune into CyBC radio 2 and listen out for the announcements.

No awkward questions please

Regards,

[nhowarth]

In case you missed the broadcast last evening, you can listen to a podcast of the program at: http://www.cyprus-property-buyers.com/files/phonein.mp3

(broadband connection recommended)

Rosie Charalambous, the presenter, was a bit shocked by some of the things I had to say!

Cheers,

[Sotos]

Thanks Nigel. Is this mostly for foreign buyers in Cyprus or for Cypriots also?

[nhowarth]

Hi Sotos,

It's for both Cypriot & foreign buyers - the discussion is in English.

Regards,

Nigel

[dolmadis]

Only one phone call though..........??

Hope you have a good tin hat for when the lawyers and developers come looking for you !!

[hazard]

Very interesting, many thanks Nigel.

I was under opinion that once a property sale contract is registered with the District Land Registry Office, developer can not take any new mortgages on land & property. However as I understand from the podcast you say it is otherwise. Can you clarify?

[nhowarth]

Hi Hazard,

> Can you clarify?

No problem - take a look at the Ministry of Interior web page at: http://www.moi.gov.cy/moi/citizenschart ... enDocument

which is all about Deposit of contract of sale of immovable property - The Sale of Land (Specific Performance) Law

At the bottom of the page, you'll find a paragraph:

"The deposit of the contract of sale creates an encumbrance, which expires within six months from the date of the contract of sale or six months from the last date of transfer specified therein. Where only part of the property is sold (a building site or field under division or flat, office or shop under construction) the encumbrance is attached to the whole of the immovable property until the issue of a separate title for the part so sold. This means that the encumbrance created shall thereafter be limited to the part of the property so sold. Until the issue of a separate title, the vendor may transfer his property subject to the contract of sale, which is deemed to be a mortgage on the property so transferred, in the name of the new owner (purchaser). The contract of sale is binding upon the purchaser. The vendor may also choose to mortgage the property. In this case, the contract of sale is deemed to be a prior mortgage (subsisting before the new mortgage)"

I know a number of people who have bought property that the developer has subsequently mortgaged - in one case the mortgage is CYP 3,000,000.

So you can buy mortgaged property, pay the developer in full for it and take posession - then the developer can take out a further mortgage - it's all perfectly legal!

I would be very interested to know how many properties are affected by this - and it's very obvious to see why some property developers are 'reluctant' to proceed with getting Title Deeds issued.

What happens in reality when you sell the property is that you can recover what you paid for it, but any profit goes to paying off the developers mortgage - clever eh?

Regards,

[hazard]

So you can buy mortgaged property, pay the developer in full for it and take posession - then the developer can take out a further mortgage - it's all perfectly legal!

I would be very interested to know how many properties are affected by this - and it's very obvious to see why some property developers are 'reluctant' to proceed with getting Title Deeds issued.

What happens in reality when you sell the property is that you can recover what you paid for it, but any profit goes to paying off the developers mortgage - clever eh?

Very nice. For what is the specific performance useful then? To ensure that the developer doesn't sell your property several times to somebody else?

[nhowarth]

Very nice. For what is the specific performance useful then? To ensure that the developer doesn't sell your property several times to somebody else?

That's about the size of it - stops the owner from changing his mind about the sale or sellig the property to someone else.

Regards,

[dolmadis]

What you don't want as a buyer is this sort of clause which was present in a contract recommended for signing by a lawyer in Paphos to a buyer client.

"also the vendor has the right to mortgage the above plot but he has the responsibility to release the flat from any mortgage when the title deeds will be ready"

They signed unfortunately and please note that the mortgage redemption is dependent on the issue of deeds !!

For protection you need a clause which PRECLUDES further mortgages and then the Banks won't lend to the seller.