CYPRUS TITLE DEEDS – PROBLEMS AND SOLUTIONS View the video here.
Freddie Cerva of FC Advance Solutions interviews A & G Kouzali Law Office in Paralimni 27th July 2009. Report on 2nd interview.
WHAT CAN CYPRUS PROPERTY PURCHASERS DO NOW TO AVOID FUTURE PROBLEMS?
Following on from the first interview on the Title Deeds issue (click here for a report on this), in this highly informative 25 minute second interview, Giovanni Kouzali offers existing and future buyers really positive and practical advice.
If you have not yet purchased a property, we strongly advise that you watch this DVD in order to avoid the pitfalls which have occurred for some past purchasers of Cyprus property. However, for those who have bought and have already experienced problems, he also shows that all is not lost. Change is afoot and everybody who is involved in the cycle – from agents to banks – has a role to play in bringing about change.
So who are the key players in the process of buying and selling property in Cyprus? In this interview, Giovannis lists all of them. Buyers, agents, developers, banks, land registry offices, government departments, mayors offices and solicitors. All of these parties, according to Giovannis, must bear a larger or smaller degree of responsibility for the current situation, all must take action to change the situation for the future and all especially must show their own “due diligence”.
“First of all the Title Deed situation is everybody’s responsibility. If anybody says it is not their responsibility, that is definitely the person to blame … But we will not kill this market, we will make this market much better and more efficient. That is our priority and our task!” (Giovanni Kouzali)
What can a buyer do to avoid problems in the future?
Coming primarily from the UK and other western European countries, where the legal, banking and government authorities are more highly regulated, many new buyers will perhaps be surprised to hear on this DVD a top Cyprus lawyer informing them that they themselves must take responsibility and show this due diligence in making sure that they way they buy is as free from pitfalls as possible. This is some of the advice he gives to new buyers:
• Check out your solicitor. He/she must prove they are independent and working primarily for you the buyer and not the developer. Solicitors are often recommended by the developer.
• Even if your solicitor has approved your contract – ask to read this, check yourself that it represents you. Ask friends/other buyers for solicitor referrals, even check with the British High Commission.
• Get your solicitor to put in writing what they are going to do for you.
• Check out your agent in the same way. They can help to put pressure on developers to take action and operate ethically. They must be on your side. They must ensure they only represent worthy, able developers with established products.
• If your agent or developer arranges a mortgage for you, check it out. Go to the bank. What other products are available? Don’t just take what is immediately offered.
What role can a developer play in making sure it is easy to obtain a Title Deed as soon as possible after the property is sold to the buyer?
Giovannis expands on one of the main ways in which property developers must take their share of the blame for why this title deeds problem has developed in Cyprus. All too frequently on a large development, when the developer receives payment for the first houses completed, instead of taking this money to the bank and asking the bank to issue a “waiver” for that part of the mortgage (effectively cancelling out that part of the debt), he has used that money instead to buy other land to start new developments. This means that neither the developer nor the owner can in turn apply for the Title Deed on that property.
The good news in this DVD is that Giovannis explains that late issuing of waivers (even when not part of the original agreement) is not only easy and possible but necessary now to solve the Title Deeds problem. Banks must also play their part in facilitating this and in putting pressure on developers to issue waivers at a later time if they have not already been issued.
This interview shows how we must all take a role in putting pressure on developers to:
• build according to the regulations, plans, specifications laid down
• deliver on time
• pay their loans on delivery and get title deed applications in process
• obtain a waiver from the bank for the client as soon as that particular client has paid in full
In addition to the waiver situation, Giovannis explains “banks must not make the final payment unless there is a final building permit on the project”. Sadly some banks have released funds prematurely. This is where banks themselves must operate with their own due diligence.
The role of government departments
In addition, it is shown how some land registry offices are issuing planning permission simply from sketches from the developer without proper architects plans – and even issuing permission for apartments to be built with no parking spaces! This is the government’s fault and Giovannis calls for uniformity to be adopted. The timescale for obtaining planning permission is also condemned – three months is the maximum permitted length, but it is often taking up to ten months.
“I cannot keep only criticising the Minister. The whole government system has played a dramatic and large-scale role in causing this problem . The governmental machine must be there to move fast… at the moment there is nothing like this. It does not produce solutions or give guidance. It is a mess.”
A & G Kouzalis will continue to stay at the cutting edge of providing the best, up-to-the-minute help and advice to clients and visitors to this website on the Title Deeds problem – as well as in advising and lobbying the government. Watch this space!
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