From to time we write about some of the odd things going on in real estate that come to our attention. There are various scams and other things to look out for that we believe the public should know about. Here are some of them:
- Signing as a guarantor for the benefits of a financier: In a recent case a client signed a guarantee on behalf of a buyer/borrower, up to the date of issue of a separate title for an apartment. The title was issued four years ago, but the buyer, despite various invitations for the transfer, does not turn up or respond to attempts to be contacted.
The financier is now suing, so if they are successful, the financier will collect the guarantee, and the buyer (the borrower) could get off scot-free. We were told that the guarantor must take the “appropriate” steps to have the apartment transferred, which means they have to take care of any taxes, any capital gains and so on that the borrower owes and then sue them, a process of around seven years or so in legal battles.
- Another case saw a buyer who bought an apartment in Limassol (a well-known furniture chain), signed a sales contract using its name and then asked the seller to change the contract with the same terms but changed its name, adding an A at the end of it.
The purchaser did not pay, and the seller sued. After five years, the court decided the original buyer was not the same as the second (the company) with the additional letter A. Is this not fraud?
- At a development in the Larnaca beach area, a group of buyers (10 out of 80) came up with all sorts of reasons why the administrator of the common expenses had to go.
He eventually did, and the same group undertook the job but were unable to collect the common expenses, leading to the project being run down. Other buyers got together and decided to sue the new administrative committee for the loss of value of their property. It is a most interesting case to watch and a lesson to those who think they can do better.
- We were once involved in a case concerning a project in Peyia, in which the buyer claimed damages due to damp. We went to give an expert opinion and the gardener, who just happened to be there, told us that the buyer had turned the water sprinklers on his wall. He lost but it took four years to resolve.
- A buyer of an apartment in the Ayios Theodoros quarter in Paphos, claimed that the agent sold it to him for more than its market value. He even provided the salesperson of the agent as a witness, who said that the agreed sales price was the result of negotiations between the buyer and the seller and in fact the deal was concluded behind “closed doors”. The buyer lost and now has a memo on the apartment which means that he cannot sell/dispose of the property unless he compensates the agents for loss of time, costs etc.
- A two-bedroom apartment was let and it emerged afterwards that it is being occupied by eight people. Non-payment of common expenses by the occupants forced the administrative committee to disrupt the water supply, but because it is a common service, hot water is still running for them, while the remaining residents pay for it.
Legal action has been undertaken by the administrative committee against the owner, who is ignoring the situation, costing thousands, in the hope the dues will be collected and the occupants possibly evicted.
- Illegal actions by municipalities and lack of transparency are issues not only for the changes we need but also because they do not respond to public letters. We have written on several occasions about how the Paralimni Municipality let government-owned land on the beach. After five years of pressure, we have now been told that the municipality had no right to occupy or let the property in the first place.
- An older court case involved a beachfront property in Neapolis, Limassol. The judge decided that because there was a government strip of land (20 feet wide) in front of the site, the property under evaluation was not considered beach land. The compensation received was €250,000.
The owner appealed to the European Court of Justice, which awarded him €2 million in damages.
It is about time that a common body is set up comprising buyers, tenants, financiers, and other interested parties (including developers), which will act as a pressure group to improve the situation of the real estate sector, with the hope for a better future.
Antonis Loizou & Associates EPE – Real Estate Valuers, Estate Agents & Property Consultants, www.aloizou.com.cy, [email protected]