Cyprus Mail
Cyprus Opinion

Blaming purchasers is no help at all

By Paul Dobson

I refer to the Sunday Mail’s ‘Legal issues with George Coucounis’ and the most recent article ‘Obligation of purchaser to accept property transfer’. What planet is he on? Developers and vendors unfairly treated by purchasers who willfully will not accept their title deeds, whatever next?

To suggest, without showing any evidence of a widespread problem that the law must be amended to give equality to purchasers and vendors rights – by which most of us would take this to mean developers – is not only insulting to those purchasers who have been waiting many years for their deeds, 12 years in my case, but completely misses the whole crux of the title deeds mess in Cyprus.

And that is the frequently dishonest treatment of purchasers from the outset by many developers and solicitors, from contracts showing title deeds will be issued quickly and giving an unrealistic date, to the failure of solicitors.

They fail to perform proper land searches, fail to inform their clients of additional mortgages, poor construction practices, problems with building permits and overvaluation of property for IPT.

Unnecessary delays then result in last minute extortionate transfer and added admin fees. Then there is the failure of developers to adequately invoice and collect the correct taxes and of course to actually pay the tax to the government. Most of this is unfair commercial practice, untruthful information and misleading omissions, which are contrary to EC directives.

It is not unusual for Cypriot property developers to have failed to obtain the correct permits to build, or build across the boundary of someone else’s land, add or radically alter the buildings without permission so the site bears little relation to the original plan.

They then leave the title deeds issue dormant for years expecting the land registry to magically sort it out years later when they feel like doing it. All of this could be nipped in the bud by adequate building regulation enforcement at the start of building and again on completion, then issuing the full title deeds free on the date of purchase.

Instead we find lies, delays and belated requests to municipal building permits office, and plans eventually being produced to the inefficient registry that are inaccurate and have to be returned many times for minor corrections or get filed away as too difficult.

All this apparently then relates to a buildup of debt by purchasers. If the developer actually got his own house in order and dealt with the title deeds issue quickly less of this would happen.

Mr Coucounis missed completely the widespread practice – rightly considered fraudulent outside Cyprus – of developers demanding thousands of euros to supply a signature to transfer a name on title deeds.

Also developers have frequently overcharged the purchaser the higher ‘developers’ IPT rate when in fact the purchaser may not be liable for IPT at all. Frequent mistakes have been made in the calculations for IPT so beware.

As for land registry property overvaluation, this is well known and rife particularly in Paphos where despite what the department of lands and surveys website says about the valuation criteria, when one can actually access it, it is a secretive process and appears to be often based on an arbitrary value per square metre for example €1,300 in 2001 and €1,600 in 2004 per sq metre of closed space and covered veranda, instead of a balanced view based on similar properties in the area, or even expected resale value.

Where this figure comes from or why the Paphos land registry values are routinely over 40 per cent or 50 per cent above the original purchase price in a depressed market, I do not know. Even local solicitors have been told by Paphos officials that many Paphos district properties have not been visited by valuers and they and the purchaser are not entitled to know how the calculations have been made.

Why the 2014 valuation now cannot be shown on the title deeds document issued by the land registry informing your developer that your title deeds are ready for issue is also a mystery to me. Even issue of this ‘advanced’ notice by the land registry does not actually mean that the developer or the land registry will not still delay production of the deeds. Perhaps the Paphos district land officer could explain all this?

You may not be surprised to learn that Cyprus is not a signatory to the EU-wide Freedom of Information Act, but is a signatory to the 2007 EU directives for the EU Small Claims Court procedure, which is available to both purchasers and vendors and covers unfair commercial practices, small debts etc.

Perhaps I have missed Mr Coucounis’ articles solving the problems facing purchasers obtaining their title deeds, but it does appear to me that he is yet another lawyer championing the wrong people.

The troika is rightly chasing the millions of euros in non-performing loans given to large companies, but little seems to be done by the government to secure payment of the debt and now this lawyer is saying that hard-up property purchasers must be forced to pay and take their title deeds no matter what their situation.

He needs to think of a more equitable solution. The whole title deeds mess reflects badly on Cyprus and is a disincentive for future investment in Cyprus property particularly from the UK. Blaming purchasers is no help at all.

Paul Dobson, Paphos

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