Equivalent to participation in defrauding a property owner and taking away their property

The lack of adequate supervision and control of certifying officers provides the possibility of defrauding owners of real estate, who may lose their property, usually to a relative who forges power of attorney documents and sells the property to an unsuspecting bona fide purchaser. A certifying officer does not require the presence of the person giving the power of attorney during certification allowing for this phenomenon.

The sale of the property, although illegal, allows the purchaser to retain the property and the title deed and the only remedy available to the owner is to claim compensation from the person who committed the fraud. Furthermore, the owner may not be able to recover compensation since the person who defrauded them is imprisoned and may not have any assets to satisfy the claim. Certifying officers must be doubly careful and protect the owner, both by ascertaining the identity of the person whose signature is sought to be certified, and by not certifying the signature of a person who does not appear before them.

There is a lack of adequate supervision by the competent authority of the manner in which certifying officers operate and the relaxation of the law, together with the lack of regulation of the manner of certification. The entire system regarding property ownership in Cyprus is affected and the government and House of Representatives must regulate the issue and provide for severe penalties against any offender. It is not acceptable for a certifying officer to certify the signature of a person without their presence, not to ascertain their identity and not to require them to sign the certification book that the certifying officer must keep in chronological order. No certification should be valid unless the above safeguards are strictly observed in order to eliminate fraud.

The issue was raised in a judgment delivered by the Supreme Court in Civil Appeal 283/2014, dated November 17, wherein the property owner, through the administrator of her estate, was seeking court orders to cancel the transfer of her property as the transaction was the product of forgery and seeking re-registration of the property in her name as well as other remedies. The Supreme Court cited the result of the first instance judgement that, although forgery of the power of attorney was proven, the involvement of the buyers was not proven.

The owner’s main complaint was that the finding of the trial court that the buyers did not know of the forgery and illegality of the sale contract and that it was not permissible to issue any judgement against them, was wrong since it was not justified in the light of the law and the facts of the case. The Supreme Court did not agree. Citing case law, it emphasised that it was not decided that any deviation in the sale price from the appraised value of a property must, without more, cast doubt on the bona fide contracting parties as to the validity and intentions of any purported proxy representative of the owner.

Nor did the Supreme Court accept the owner’s suggestion that the sale contract and the power of attorney were illegal and that they should necessarily lead the trial court to a finding of universal invalidity of not only the transfer deed but also of the sale contract. Again, with reference to case law, the Supreme Court pointed out that unlike in the present case, there was participation of the parties in the conclusion of the illegal agreement, whereas in the present case the owner failed to substantiate such a claim.

George Coucounis is a lawyer practicing in Larnaca and the founder of George Coucounis LLC, Advocates & Legal Consultants, [email protected]