Send to a friend

News

Movement on Cyprus title deeds - 5 August 2009

In response to the concerns being raised in the UK by groups representing large numbers of British property buyers in Cyprus, the Interior Minister Neoclis Sylikiotis last week announced a series of measures to help speed up the process of issuing title deeds to property buyers on the Mediterranean island.

An estimated 130,000 property owners are still waiting to get their hands on the title deeds to real estate they have bought, and the issue has raised concerns that some buyers could lose property for which the developer still hold the deeds if there is a loan taken out on the land by the developer who subsequently defaults on repayment.

Among the measure announced last week are plans to remove the obstacles preventing single owners on large property developments from receiving their deeds, and laws to allow those properties not built in accordance with their original planning permits to also be granted title deeds – a kind of building amnesty to allow the backlog of title deeds to be issued to be cleared effectively.

Of the 130,000 title deeds waiting to be processed, it is thought that up to 30,000 are for foreign buyers. Another report in Cyprus Property Magazine suggests that only 17 per cent of homeowners have the title deeds to their property. The Cypriot government has stated its aim as having 20,000 of these title deeds issued by mid-2010.

The announcement of the new rule on issuing deeds has left developers split over whether it is a positive step or not. Developer Aristo welcomed the news and claimed that the simplification of the process of applying for and getting title deeds will help enormously. Savvas Georgiades, Aristo’s finance and operations director, said: “90% of the deeds are expected not to be problematic; with the other 10% having problems regarding unauthorised changes to their plans and these could be corrected by the amnesty measures proposed by the minister.”

However, others did not see the move as such a step forwards. David Pollard, commercial director of agent Universal Vacation Realty, said the new rules would only have an effect if developers and the Land Registry and purchasers allow them to. “Simply bringing out new laws will not increase the speed at which some developers apply for title deeds; it will only make them more inventive because they have too much to lose. Of course there are many honest developers who will commit to obtaining title deeds in their contracts and also offer other safeguards. But it is incumbent upon the potential purchaser to find them”, he told Overseas Property Professional magazine.

The biggest potential problem with property in Cyprus with title deeds is the fact that many developers take out mortgages on completed properties, leaving the buyer at risk of losing their property should the developer default on the loan or go bust. Despite the fact that it is very rare, even in the present economic climate, for a Cypriot developer to go bust, the issue is causing concern among owners.

One proposed solution from the government is to issue a ‘limited’ title deed, protecting the owner in case of any financial difficulty on the part of the developer, while not granting them full rights of ownership, such as the ability to resell the property. This has been cited by agents and developers alike as the most worrying aspect of the proposed government changes, as it could still leave owners in a parlous situation that is not of their making, even if they have taken all appropriate legal advice from the outset of the sales process.

Post this article to:

del.icio.us Digg Newsvine Reddit MyYahoo! Facebook

Related Articles

• Buying a Property in Cyprus
• Northern Cyprus - The Current Situation
• Mortgages