Cyprus-Forum.com

[Jerry]

It looks like Cyprus Property Action Group are trying, with the "help" of the EU, to sort out the title deed scandal at last. It seems there are already laws and procedures in the ROC to protect buyers but little is known about them.

Let's hope it improves the image of the ROC in the overseas property market.


Updates
April 2011

Dear Colleague,

Purpose of this Communication

This is a vitally important request for your action.

We are calling for your individual action in order to support CPAG, your UK MEPs and especially all buyers without Title Deeds. Please read the full text below and the request to you at the conclusion of this note.

Background

In April last year it was decided to close down the CPAG website due to the severe risks to people involved in running the website. Nevertheless it is also fair to say that at the time we were also being overwhelmed with emails from distressed buyers.

Although we continued to help these buyers wherever we could it was also obvious that in the case of developer bankruptcy there was little that we could ultimately do.

By this juncture, although under severe pressure as a result of our supporters’ lobbying of the EU and UK Government, it was clear that the property industry and Government of the Republic of Cyprus had few options and even fewer ideas on how to get out of the scandalous mess surrounding Title Deeds.

It was therefore decided that, as change could only really come as a result of outside pressure, CPAG’s efforts would have to be concentrated on the EU. This we have done and as a result we are more optimistic than ever that change is now possible.

As you will see from the MEP letter (below) to the EU Commission, we now believe that not handing over Title Deeds immediately the full purchase price has been paid is an infringement of EU law.

EU Directive – Unfair Commercial Practices


The Unfair Commercial Practices Directive was transposed into Cyprus law effective December 12th 2007 and makes the State responsible for the enforcement. Also the European Court of Human Rights has previously ruled that member states could be liable to pay damages to individuals and companies who had been adversely affected by the non-implementation of a directive.

This particular Directive under Article 17 called for EU member states to ‘take appropriate measures to inform consumers of the national law transposing the Directive and shall, where appropriate encourage traders and code owners to inform consumers of their codes of conduct’.

In truth the Cyprus Government appear to have implemented and publicised this law in a fashion which means that the least number of consumers know about it. For example there do not appear to have been any media announcements to inform consumers and the Cyprus Consumers’ Association website itself contains no reference to the law, even though it claims to carry all consumer-related legislation.

Lawyers we have contacted were unaware of this law and we have even seen a recent communication from a member of the Board of the Cyprus Bar stating that is he is not familiar with the Cyprus law which transposed this Directive. This could also mean that lawyers have unknowingly fallen foul of this law since it was transposed!

Enforcement Agency


The Ministry of Commerce is designated as the Enforcement Agency for this law. A visit to their website will show no mention of the subject law in the English version. Only if you know exactly what to look for will you find it embedded ‘deep’ within the Greek version.

The Competition and Consumer Protection Service (CCPS or CCP Service) within the Ministry is actually charged with the management of enforcement.

Under Law 103(1)/2007, when the CCPS discovers a breach, it has the power to do various things, including imposing an administrative fine of up to 5 per cent of the turnover of the person or company responsible, or a fine of up to CY£150,000 (€256,290). Anyone who hinders the CCPS’s work is guilty of an offence punishable with a maximum fine of CY£50,000 (€85,430) or a 6-month prison sentence, or both.

From reports sent to the EU from Cyprus we can see that they tell the EU that:

Where the Competition and Consumer Protection Service of the Ministry of Commerce, Industry and Tourism, upon an investigation, considers that there is a violation, it may – if it deems necessary- apply to the District Court for the issue of a prohibitory οr mandatory order, including the interim order, against any person (or business) who, according to the Court’s opinion is liable for this violation.’

This statement suggests that the CCPS will even take court action on behalf of complainants if it considers a transgression of the law has taken place.

In an EU document dated October 2009 regarding a Cyprus ADR (Alternative Dispute Resolution) it states that ‘The Competition and Consumer Protection Service has prepared a draft Law which provides for the setting up of mechanisms through which a consumer may seek redress to a problem he/she may have by applying to an out of court body.’

Given the potential of this Consumer Protection Service and the effect it could have some would say it is hardly surprising it has been kept under wraps!

UK MEP’s

Your UK MEP’s are in the process of sending a joint letter to Mrs Viviane Reding, the Commissioner responsible for Justice and Fundamental Rights, requesting written confirmation that the developer practice of withholding Title Deeds after the full purchase price has been paid (regardless of when the property was bought) is an unfair commercial practice in all circumstances. That is to say the Title Deeds should be transferred immediately otherwise there is an infringement of this EU law.

Furthermore, they request that this unfair commercial practice is specifically listed in the Annex to the Directive, alongside the other 31 unfair practices in all circumstances, so that there is no room for any argument to the contrary.

This should mean that the CCPS cannot rule that the practice is fair as a way of dismissing complaints, or worse still, take 10 or more years testing it in the failing Cyprus courts.

The MEPs are also jointly writing to the UK Government demanding that Cypriot developers and their agents operating in the UK are investigated for infringement of the equivalent laws in the UK.

We are expecting that many, if not all, of the 72 UK MEPs will sign the letters, the coordination of which is being organised by Daniel Hannan MEP and his team. CPAG has also written to each MEP individually asking for their support.

What Can YOU Do To Help?

You will have noticed that all around this geographical region decent ordinary people are standing up to corrupt regimes and calling for radical change. Obviously, the situation is not quite that bad here yet!

You will be relieved to hear therefore that you won’t have to spend several weeks camped out in Nicosia demonstrating for the downfall of the Government or even dodge any sniper bullets! All we want initially in Stage 1 is a few minutes of your time.

Nevertheless, your individual effort combined with all our other supporters, your MEPs and MPs could make all the difference in the lobbying effort.

Stage 1

Firstly, would you please print off this letter, complete the details and send it to the EU Commission in support of the UK MEP’s demands. (Maybe you can get your neighbours/fellow buyers to sign one each as well and use the same envelope to post them). Or please feel free to write your own letter.

Perhaps, you may wish to drop a short email to your area’s UK MEPs asking that they support any future efforts at the EU to address the Cyprus property problems.

Secondly, you may write to your UK MP in a similar fashion requesting that they write to David Cameron, Prime Minister, enclosing the MEP letter for guidance. Or even write to Mr Cameron yourself as well.

Even if you already have your Title Deeds, but think this behaviour by developers is totally unacceptable and want to help others, we ask for your support in this lobbying exercise.

Finally, to all our supporters of other nationalities we ask you to think about writing to your own country’s MEPs in support of this effort.

Stage 2

Buyers without Title Deeds can complain to the Cyprus CCPS that their developer has not transferred their Deeds and request that they take the neccessary actions to effect the transfer. Full details on how to do this will be provided – see below.

Additionally, there are other unfair (‘aggressive’) commercial practices by developers which can only be carried out because Title Deeds have not been transferred immediately, such as cancellation charges and the IPT-type scams. Buyers may wish to make a claim to their developer for refunds, copying the CCPS.

It is also true that because Deeds are not transferred immediately, the Land Registry can get in on the act by charging transfer taxes, years later, on a completely different basis than the purchase price. We also consider this to be an aggressive act under the Directive. In other countries where Deeds are transferred immediately and stamp duty is paid on the purchase price this scam simply cannot happen.

What Are CPAG Going To Do?

We are restarting the website, with all the risk this entails, albeit with a different style and objectives and will be providing amongst other things, full details of how individual buyers can complain to the CCPS. Clearly, there are different buyer situations which need to be covered, so please bear with us whilst we compile the website content.

With buyers’ assistance, we are planning to create a register of the complaints and also the responses from the CCPS. Should the CCPS fail to properly enforce the law we can then jointly (with our MEPs) complain to the EU to take action against Cyprus for failing to enforce the law using the collected data as proof.

Ultimately, this could result in Cyprus being taken to the European Court of Human Rights (ECHR) by the EU Commission, should they not comply.

We are also of the view that the CCPS is the designated local legal remedy and therefore once this remedy has been exhausted then it follows that individual buyers could then take Cyprus to the ECHR – which is free and can even be done on- line!

Finally

We hope you would all agree that no one wishes to destroy the property market or Cyprus economy, nevertheless, equally, no buyer should be at risk of losing their home through no fault of their own.

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.

Consequently, we need your personal involvement to force this long-needed drastic action to be taken by the Government of Cyprus which may very well come from these proposed activities, so let’s all give it our best shot – this is not a time for leaving it to someone else!

Kind regards and thanks in advance for your support,

Cyprus Property Action Group

[bill cobbett]

Would love to see much more criticism of the role of the banks in all this.

After all, is it any less of a sharp practise for banks to lend money to their friends, the developers, on the strength of the value of land which the banks knew full well had been sold on for homes, paid for in full by home-owners.

So much disrepute has been brought on to CY's good name by these developers and banks.

[Jerry]

Would love to see much more criticism of the role of the banks in all this.

After all, is it any less of a sharp practise for banks to lend money to their friends, the developers, on the strength of the value of land which the banks knew full well had been sold on for homes, paid for in full by home-owners.

So much disrepute has been brought on to CY's good name by these developers and banks.

I'd like to know the Government's reason for not employing more staff in the land registry to speed the process up. Surely the ROC must be losing millions in tax revenue if the deeds are not issued.

Still, at least we can give the carpetbaggers a two fingered salute now. They have always said that the property problem is as bad in the ROC as it is in the north - it looks like it is going to be sorted out at last.

[quattro]

Would love to see much more criticism of the role of the banks in all this.

After all, is it any less of a sharp practise for banks to lend money to their friends, the developers, on the strength of the value of land which the banks knew full well had been sold on for homes, paid for in full by home-owners.

So much disrepute has been brought on to CY's good name by these developers and banks.

I'd like to know the Government's reason for not employing more staff in the land registry to speed the process up. Surely the ROC must be losing millions in tax revenue if the deeds are not issued.

Still, at least we can give the carpetbaggers a two fingered salute now. They have always said that the property problem is as bad in the ROC as it is in the north - it looks like it is going to be sorted out at last.

No need for more staff Jerry They are more than enough what they need is to sit their arses on the chair and start working than drinking coffee.

[Jerry]

Would love to see much more criticism of the role of the banks in all this.

After all, is it any less of a sharp practise for banks to lend money to their friends, the developers, on the strength of the value of land which the banks knew full well had been sold on for homes, paid for in full by home-owners.

So much disrepute has been brought on to CY's good name by these developers and banks.

I'd like to know the Government's reason for not employing more staff in the land registry to speed the process up. Surely the ROC must be losing millions in tax revenue if the deeds are not issued.

Still, at least we can give the carpetbaggers a two fingered salute now. They have always said that the property problem is as bad in the ROC as it is in the north - it looks like it is going to be sorted out at last.

No need for more staff Jerry They are more than enough what they need is to sit their arses on the chair and start working than drinking coffee.

Sounds like their arses need kicking before they sit down. I wonder how long those who work in the Land Registry have to wait for their deeds.

[quattro]

Would love to see much more criticism of the role of the banks in all this.

After all, is it any less of a sharp practise for banks to lend money to their friends, the developers, on the strength of the value of land which the banks knew full well had been sold on for homes, paid for in full by home-owners.

So much disrepute has been brought on to CY's good name by these developers and banks.

I'd like to know the Government's reason for not employing more staff in the land registry to speed the process up. Surely the ROC must be losing millions in tax revenue if the deeds are not issued.

Still, at least we can give the carpetbaggers a two fingered salute now. They have always said that the property problem is as bad in the ROC as it is in the north - it looks like it is going to be sorted out at last.

No need for more staff Jerry They are more than enough what they need is to sit their arses on the chair and start working than drinking coffee.

Sounds like their arses need kicking before they sit down. I wonder how long those who work in the Land Registry have to wait for their deeds.

hmmmmm let me see ................ 24hours ....................or is that too much

[supporttheunderdog]

I was very lucky - I bought a re-sale propert and got the deeds in a matter of weeks - few months at most.\I had a good lawyer, Areti Charidimou, in LImassol, who did a good job in warning me off one propertiy because of deeds problems - not connected with mortgages but because of possible building laws violations where the seller got a tad upset when we wanted an independant architect to check the actuality of a house against the plans and permissions.

That said the record of the Government in failing to properly deal with the entire developers' mortgage issue and protect buyers is a disgarce: In particular (a) the AG's failure to prosecute developers for fraud and (b)the failure of law society disciplinary board (where I understand the AG has a role) to deal with the dodgy lawyers who have conived with developers are both an apaling state of affairs which the AG should either deal with immediately or resign as being unfit for his job, and Toffee should put in someone who will act on both points to prosecute developers and strike off the dodgy lawyers.

The impression otherwise is (rightly or wrongly) that the government is complicit in the whole affair.

[Milo]

Those that have finally been informed that their Title Deeds are now finally ready are finding at the Land Registry yet another obstacle. If you challenge the Land Registry's decision, it will cost yet more money.


Guilty of tax evasion unless you prove otherwise
The Land Registry is effectively finding you guilty of tax evasion and defrauding the state of much-needed tax revenues if it inflates the amount you have paid for your property when calculating your property transfer

IN virtually all civilised countries, the burden of proof rests with the person or organisation that lays charges against you; in other words, you are considered to be innocent until you have been proven guilty.

However in Cyprus, the reverse is true when it comes to paying your Property Transfer Fees at the Land Registry.

Using its discretionary powers to reassess Property Transfer Fees, the Land Registry relies on historical data to assess the market value of a property – and it will use that data as the basis for calculating the transfer fees to be paid by the purchaser.

The reason for the Land Registry’s reassessment, we are told, is that vendors and purchasers often under-declare the price of a property in efforts to defraud the state of much-needed tax revenues; by under-declaring the price, vendors reduce the amount of Capital Gains Tax they pay, while purchasers reduce their Property Transfer Fees. Of course for this fraud to take place both the vendor and the purchaser have to collude to deceive the authorities.

If the Land Registry considers that a purchaser has under-declared the property’s sale price, it will demand that he pays Property Transfer Fees based on their valuation (which incidentally is always higher that the declared sale price on the contract). The Land Registry is not required to say how it arrived at its valuation; the burden of proof rests with the accused (the buyer) to prove his innocence by showing that the Land Registry’s valuation is incorrect.

Strangely, the Inland Revenue Department does not re-assess the vendor’s Capital Gains Tax liability even though he must have colluded with purchasers to defraud the state.

To British property buyers, and others who have contacted me, this practice is a state sponsored rip-off and is typical of what you might find in less civilised countries in which corruption and nepotism are rife. It merely adds to the dissolution and anger felt by many who have purchased property in Cyprus and who have suffered at the hands of unscrupulous lawyers, developers and banks.

http://www.news.cyprus-property-buyers. ... /id=008115

[supporttheunderdog]

EU pilot scheme guarantees legal certainty when buying property cross-border
EU parliament vice president Diana Wallis MEP has commended a pilot scheme that promises to end the probems experienced by expats when buying property in Spain and other EU countries

The scheme, set up by the European Land Registry Association and funded by the EU, allows for the purchasing procedure to be settled in the buyer's home country and under the protective laws of that country.

It also guarantees compensation for unknown restrictions and violation of the contract by the seller.

Currently piloted in Holland and Spain, the Cross Border Electronic Conveyancing (CROBECO) scheme means that a Dutch buyer of Spanish real estate can apply Dutch law to the contract and ask a Dutch court for compensation from the seller if he later finds out there are unknown public limitations, such as retrospective planning laws, affecting the property.

http://www.telegraph.co.uk/property/exp ... order.html

I would really love to see English law being applied to some of the developers and their dodgy lawyers - not that there would so much scope for some their tricks if a British lawyer was to do the conveyancing.

[Ron Doran]

Jerry - Rather belated this reply, but you say....'and send it to the EU Commission'.
Would you have a name and address?