It is difficult to believe assurances given by deputies that the problem of trapped buyers will be resolved before Christmas. This is not because deputies are trying to mislead or deceive people but because several past attempts by the legislature to resolve the issue of title deeds, many being held as collateral for developers’ loans by the banks, have failed. Measures approved by the legislature, often in co-operation with the interior ministry, have encountered legal obstacles that prevented their implementation and the freeing of trapped buyers.
A law approved in 2015 that gave the director of the Lands and Surveys Department the authority to eliminate mortgages held against properties that had been paid in full by the buyer was ruled unconstitutional. Judges ruled that it violated the article of the constitution that gave people the right to freely enter into contracts. The banks were bound to use every legal means to protect their interests, which was why Disy leader and chairman of the House finance committee Averof Neophytou adopted an unorthodox approach.
When the banks were pressing for the approval of the bills that would make foreclosures easier last July he demanded assurances from them that they would not oppose implementation of the law on the title deeds. On Wednesday, he promised to come down hard on the banks if they went back on this pledge. How he would pressure the banks he did not say but there was unanimity among the deputies in the committee about the need to tighten proposals and they were already working with the state legal services.
Perhaps Neophytou should also have pointed out that the government had done another big favour to the banks by setting up the Estia scheme by which the state would contribute to the repayment of loans on primary residences that were non-performing. With this scheme, the taxpayer will directly help the banks reduce their NPLs, while reducing the amount of the loans of strategic defaulters and assisting them repay it. It is scandalous that the state is helping the banks and the defaulters whereas honest home-buyers who honoured the contracts they signed with developers, paying them in full, are still without title deeds to their properties.
The banks are as much to blame for the unacceptable situation of penalising property-buyers as the developers. They should take a hit for allowing developers to mortgage properties that did not belong to them, but a lot will depend on how forceful the politicians are in pursuing the new arrangements aimed at finally freeing trapped buyers.