North Cyprus Property | Time for Banks to Negotiate With Mortgage Victims


North Cyprus Property | Time for Banks to Negotiate With Mortgage Victims

With the landmark decision on Thursday, albeit not a unanimous decision, the Stealth Mortgage situation is being viewed very differently now. It has to be cautioned with the fact that one High Court Judge did not see it the way we all do and indeed voted in the Bank’s favour.

However Mortgage Law 11/78 section 21 is being taken seriously now and it would not surprise me if the Banks start to come to the negotiating table with many of the victims of mortgage fraud.  Clearly this would be the right thing to do, since most victims are old and really do not need the increased stress of court appearance after court appearance.

The view of many legal people now is that the outcome of the Kulaksiz 5 case, where the battle still rages, is crucial and will affect thousands of mortgage victims. Why does it need to go to the final battle to win this war? Now is the time for the Banks to show their mettle and start negotiating with the mortgage victims. If the war is won by Kulaksiz 5 then the Banks stand to lose an awful lot more than the money they loaned, alleged unwisely and possibly illegally. Time for them to mitigate against these possible losses and indeed in doing so undo some of the bad feeling of those so brutalised. As a good will gesture, the first Bank to break ranks and see sense will garner untold goodwill with the banking public.

Many of us still believe that those who sought the mortgages using property they no longer owned as security should be punished under the criminal law. Fraud IS criminal and yes indeed this would be just and fair. However the first step has to be to stop the Banks taking homes of the innocent. Maybe when this is done, those who started this heinous chain of events will be made to answer for their crimes. Remember, without this alleged criminal act initially this article would need to be written.

Let us just look at Mortgage Law 11/78 section as translated by a very eminent legal mind:


This is an explanation of Mortgage Law 11/78


According to section 21, of the TRNC Mortgage Law (No.11/78) a creditor when putting a mortgage on a property is obliged to search the property and declare the rights of other people on it. This rule of law means that the rights of other people on the property remain valid and should be respected. It further means that a mortgage covers only what is mentioned on the mortgage certificate and may not cover the houses or rights of other people not mentioned on the certificate. Only when a house is mentioned on the mortgage certificate, and the consent of the purchaser is obtained, can the rights of the purchaser be affected. Therefore according to the correct interpretation of the Mortgage Law, unless his house is mentioned in the mortgage certificate and his consent is obtained, the rights of a homebuyer remain intact. This principle brings us to the conclusion that in all other occasions sale contracts remain valid and have priority to the mortgage.

Unfortunately in TRNC, this clear rule of law is ignored by some local banks. They claim that when they put a mortgage on a property and declare that it is a bare land, houses on that land are also included in the mortgage. Following this logic, they claim that everything already built on the land, or going to be built later, will automatically become theirs. They insist that this illegal interpretation should be accepted by Courts. So that they can grab the houses of innocent people through mortgaging the lands on which houses are built on. This attempt is not only illegal but amounts to larceny in many countries of the world.

Yasal sorunun özü

KKTC İpotek Yasası (No. 11/78) ın 21 inci maddesine göre bir taşınmaz mal üzerine ipotek koyan alacaklının o taşınmaz mal üzerinde araştırma yapması ve üçüncü kişilerin haklarını ipotek takririne kaydetmesi gerekir. Yasanın bu hükmü ipotek konurken ipotekli mal üzerinde diğer kişilerin haklarının geçerli kalacağını ve bu haklara saygı duyulması gerektiğini ifade eder. Bu hüküm ayrıca bir ipoteğin sadece ipotek takririnde belirtilen malları kapsadığını ve ipotek takririnde belirtilmeyen mallarla hakları kapsamadığı anlamına gelir. Buna göre ev satın alan bir kişinin haklarının etkilenebilmesi için satılan evin ipotek takririnde belirtilmesi ve satın alan kişinin rıza göstermesi gereklidir. Bu durumda ipotek takririnde satılan malın belirtilmediği ve satın alanın rızasının alınmadığı tüm durumlarda sözleşme geçerli olmaya devam eder ve sözleşmenin ipoteğe göre önceliği olur.

Yasanın bu açık hükmüne rağmen maalesef KKTC de bazı yerel bankalar bu hükmü göz ardı etmektedirler. Bir taşınmaz mal üzerine ipotek koyup boş tarla olduğunu beyan ettikten sonra o tarla üzerindeki tüm evlerin ipoteğe dahil olduğunu iddia etmektedirler. Bu görüşten hareketle ipotekli tarla üzerinde yapılmış ve yapılacak olan evlere otomatik olarak sahip olmaya çalışmaktadırlar. Yasanın bu kabul edilemeyecek yorumunu mahkemelere kabul ettirme gayreti içindedirler. Böylece iyi niyetli saf insanların evlerini ipotek yöntemiyle gasp etmek istemektedirler. Dünyanın bir çok ülkesinde böyle bir girişim sadece yasa dışı ve geçersizolmayıp hırsızlık olarak da nitelenmektedir.

Long may the furore this law is causing continue. In submitting a mortgage document with information missing, i.e. the existence of property on the land, the Bank submitting such a document would be denying the District Officer at the Tapu the information he needed to do his duty properly.

Power to the people

Citizen Smith

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