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Troika must consider title deed fiasco in seizures' proposal


The Cyprus Property Action Group CPAG, said that through dealing with some terrible buyer situations, the organisation had seen much of this coming.

“As most of us have been saying for quite a while this title deed mess will need to be drastically addressed at some time; however the longer this action is delayed the more risky it gets for an increasing number of buyers due to developers’ rapidly reducing ability to service their mortgage debts,” CPAG said.

In a document titled “The economic adjustment program for Cyprus”, the troika of lenders wants local banks to repossess homes held against non-performing loans within 18-months, opening the possibility that some homeowners without title deeds could potentially face the seizure and sale of their properties.

The Cyprus government, in its counter proposals to the troika, wants a five-year stay pending seizure of a property. Moreover, it proposes that owner-occupied housing be exempted from any asset seizures.

Whatever the outcome, it is certain that a compromise will have to be made under the bailout negotiations, which will still leave thousands of home buyers without title deeds facing repossession of their properties due to developer mortgage defaults, unless the age-old fiasco is finally resolved.

“The troika's proposal to accelerate loan recovery by the banks could spell disaster for many,” Property analyst Nigel Howarth told the Sunday Mail.

“Within 18 months they could lose their homes even though they may have paid their developer in full and have been living in the property for many years.”

Howarth stressed that the news provides little comfort for tens of thousands of homeowners who have been left without deeds by developers that used them as collateral for their own mortgages – in many cases without disclosing their actions to buyers.

“We know that many people, both Cypriot and foreigners, have been duped into buying property built on land that the developer has mortgaged to the bank,” he said. “We also believe that many developers' loans should be considered as non-performing because they are not getting sufficient revenue from sales to service their loans.”

Furthermore, Howarth added that many banks were woefully deficient and reckless in their responsibility to clients by granting mortgages to people that had unknowingly bought property on land which developers had already mortgaged.

“But we do not know the extent of the deceit, which this and previous governments have condoned by their inaction, but it must affect many thousands of people,” he added.

“It is only when those who have bought property do a title search from the Land Registry they discover that the land on which their property is built is mortgaged. But even then they cannot find out the balance of the mortgage as the bank treats this information as confidential.”

It is estimated that developers have sold properties without title deeds – the documents proving ownership - to 70,000 Cypriots and over 30,000 foreigners, with the banks having first priority on the properties when calling loans.

CPAG claims that developer mortgages now reached a staggering €6billion.

“And developers currently in a collapsed market with limited income and unable to service this debt (and with the banks having hidden these NPL’s) this ‘toxic debt’ we have been highlighting for years becomes even more toxic every day,” it said. “ Unfortunately, we are now seeing a possible avalanche of other creditor claims against retained title deeds on properties paid for in full, often years ago. “

CPAG said some unfortunate buyers have found out already by accident that their homes are scheduled to be sold off in order to pay off their bankrupt developer’s debts – not only to the banks but to the many other creditors, including the Inland Revenue, who have since come out of the woodwork and also lodged claims against the title deeds.

“And by the way, what claim does the bank now really have, even over the land, when it was part of a deception from the outset and has not acted properly in respect of the management of the developer’s debt on that land?” it added.

CPAG also wondered what chance there was of the troika either uncovering or being told the real extent of the title deeds mess.

“Questions do remain,” said Howarth. “How will the banks treat home buyers who are diligently making their mortgage repayments? Will the banks throw them out on the street if their developer defaults?”

“I dearly hope that the troika's investigations will have uncovered the deceitful practices of the developers, their 'puppet' lawyers and the banks. Hopefully, in their forthcoming discussions with the government the troika will put forward measures to protect home buyers from what could otherwise be their Armageddon.”

Anti-Euro MP Nigel Farage says the troika's economic policy toward Cyprus would result in wide-spread misery for both Cypriots and expatriates in on the island. The outspoken MEP has previously condemned the practice of retaining title-deeds, after the sale of a property asking whether Cyprus was ‘a state or a bandit-stronghold?’

The title deed fiasco has been a constant embarrassment to the government and is partly blamed for the slump in the once booming property market, with Interior Minister Eleni Mavrou recently admitting that her office has been made aware of hundreds of complaints about deeds being sent to EU officials in Brussels.

Last year property buyers decided to change tack and pursue their title deeds through Brussels, arguing that the holding back of the deeds violates the EU directive on unfair commercial practices.


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