North Cyprus Property | What if the Kulaksiz 5 Mortgage is Judged Invalid?


North Cyprus Property | What if the Kulaksiz 5 Mortgage is Judged Invalid?

So yet another court attendance under the belts of the Kulaksiz 5 and indeed the bank. Let us not forget the bank, they too choose to be present at every appearance and it is eating into their lives just as much as the K5’s lives. Surely they too would like to see an end to it all.

So, yesterday the bank’s advocate questioned the amounts involved in the purchase of the properties at Kulaksiz site.

How is this relevant? The very fact that the Kulaksiz 5 litigants have all been living in the villas must surely go to evidence their right to do so and no builder would have allowed that without having received a substantial part of the purchase price. It is my understanding that the only amounts outstanding are those as per the Contract, and since the site was never finished by the builder, nor were the titles transferred into the owners’ names, there would be a small amount outstanding. Balance that against the penalty clauses for late delivery to the purchasers and it could legitimately argued that the builders owe the purchasers, or if as Mortgage Law 11/78 section 21 implies, the current Contract holders, i.e. the bank, took over that liability when they repossessed the properties, or if you prefer, bought them at auction.

Now again I say, how is the amount paid relevant? If the mortgage document does prove to be invalid, then the mortgage never existed and the the status quo returns. The landowner and builder do owe the bank the money they borrowed but it will no longer be secured against the ex-pats’ properties. There will still be the three villas owned by the landowner, so the bank would be able to look to those villas to recoup their money.

Now another interesting scenario reveals itself, if the mortgage was invalid, then surely all action after that date is invalid, including the Breach of Contract action taken by one owner who took that route and only did so because there was a mortgage on her property. She did in fact try to get the title transferred into her name as soon as she was given Permission to Purchase, the existence of the mortgage prohibited this. Now a second possibility reveals itself, if they want to ignore this and the Breach of Contract is still recognised, then the property involved becomes the possession of the purchaser until she receives the court award, at such time the property would then revert back to Kulaksiz and Yilmaz.

It seems inconceivable that if the repossession order is rescinded that any property covered by an illegal mortgage could be excluded, the mortgage document is either legal or illegal. It is as simple as that.

Power to the people

Citizen Smith

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