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Cyprus property developers taken to court - 8 July 2009
A number of property developers and lawyers in Cyprus are being taken to the High Court in the UK by a group of owners who have not received title deeds to properties in Cyprus they have bought and paid for in full. Signalling that they are no longer prepared to wait for the Cypriot government to sort out the issue of title deeds, the 24 property owners have brought their own civil case in the UK courts to resolve the problem, reports trade magazine The Overseas Property Professional.
The property owners, who are British, Cypriot and from other countries, hope to force the developers to hand over their title deeds and then change the system for future buyers to be better protected. UK barristers have rated the chances of success in the case at higher than 65 per cent, meaning that insurance companies should cover the costs involved.
The law regarding property purchase and the issuing of title deeds in Cyprus is causing concern both on the island and here in the UK. Over 100,000 property owners are reported to have not been issued with their title deeds in Cyprus, with over 30,000 of these being non Cypriot nationals. Often this is because the developer has finance secured on the land upon which the property is built. This leaves property owners potentially at risk if the developer defaults on the mortgage it has in place and the lending bank wishes to repossess the property. This means that owners could face losing their homes despite having paid for the property in full.
This is likely to be a continuing problem as the interior minister of Cyprus has stated that the problems with this issue have been piling up over decades and will take time to sort out. The initial target was to have some 10,000 cases examined and resolved this year, but the lack of action on the part of the Cypriot government has led to protests and public criticism.
One of the issues to be dealt with is the estimated €4 billion of debt the developers have secured against property that has already been sold. One suggested solution is that the revenue raised from issuing the proper deeds to buyers and recovering the transfer taxes associated with this could be used to assure the debts of the developer if they were to go bust and default on payments.
The cases are also due to be pursued in the Cypriot courts, but the group felt the UK courts offered the best chance of a speedy decision. They also hope to be able to take the case to the European Court of Human Rights.
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