NCFP FAQ | What are Memorandums?

WITHOUT PREJUDICE

I have been asked to try to explain what a memorandum is. Here goes.

Usually when embarking on legal action against someone who has wronged you, it would be diligent to put some sort of insurance in place to make sure that if you win, you will at least have a fighting chance of receiving some monetary compensation. If only to cover your loss and the cost of the legal action.

In north Cyprus too, often the legal profession do not explain this as many an unhappy litigant has found out at their cost (additional cost) at the end of the case. They may well have won, but the defendant has nothing, so nothing can be awarded to the ‘winner’. This is why you should at least do a search on the assets of the defendant and ensure you are not chasing an empty pot.

The search will reveal any property in the name of the defendant and if it is free of any other encumbrance, your legal representative will apply for a temporary injunction on this asset. The injunction is temporary initially in order to give the defendant the right to appeal your being given an injunction. If the defendant is unsuccessful in their appeal, or fails to appeal, the injunction becomes permanent. Your case then starts in earnest and if you win, the judge then changes the status of your permanent injunction into that of a memorandum. That is by no means the end. The defendant can and often does appeal the decision and is usually given a time period within which s/he can do this. In my case it was six months, sometimes it is a shorter period.

Now assuming that the defendant does not appeal, after the time period allowed to appeal has expired, you can then apply to the court for a ‘forced sale order’. Once you have this, a search is made to see if the defendant has some movable assets that can be sold, if this reveals nothing then the Tapu can sell the immovable asset covered by your memorandum and reimburse you – maybe. The Tapu is very slow in doing this and in the interim time if the defendant stops trading and has a tax bill, the inland revenue take precedence over the memorandum and a forced sale might only yield enough to pay the Government. Did an Advocate ever warn a litigant that this could happen? Rhetorical question. If one were cynical one might almost believe this could be the reason the Tapu (another Government department) drag their feet, of course I would never think that!

Another thing to remember. After the first two years, you must renew your memorandum, and then yearly thereafter. This is another court hearing. Rather than repeat what has already been said, I am attaching an article that dealt with this issue earlier in the year.

That this is a minefield is without question, that purchasing in north Cyprus is bad for your HEALTH and your WEALTH is a definite.

Anon

TRNC Lawyer Question | How Does a Memorandum Work?

Wednesday, July 25, 2012

– by Pauline Ann Read

WITHOUT PREJUDICE

To try to explain exactly what a Memorandum is, is quite simple, it is a note of something to be remembered. When given to a successful litigant it signifies that you have a legal interest in a property or asset. Beware though, you may not be alone.

When being applied in the TRNC, is means you are now in a minefield.

We recently read on CAC that a memorandum has to be renewed after two years and then annually for a further two years and then it becomes void. I too received exactly the same advice from the Kulaksiz 5 Advocate.

Startled, I then received further advice saying that it could be renewed annually ad infinitum.

Hands up anyone who has a memorandum and has received no advice whatsoever on ‘what happens next’? I had my hand up too and it was not until I started asking questions that I found out anything.

So what is the definitive advice, the true legal advice? I wish I could tell you, but no two answers I have yet received are identical.

One answer from someone I do trust was “normally it is simply just for two years. The judge has discretion to renew it possibly once but you must show good reason for it. Normally you put the memorandum on and then apply for compulsory sale. If you are negligent and you don’t do that, then Judge may refuse to extend even once”.

If you are applying for an extension of the memorandum, YOU MUST DO IT AT LEAST A MONTH before the expiry date.

Now, once you have received a compulsory purchase order for the tapu to sell the assets covered by the memorandum, opinions again vary. One opinion I had was that there is no time limit, although he was not entirely sure what happens after 15 years. (God help us all)

My own previous Advocate, the one who sacked me as a client, had this to say “With regards to the memorandum, I have spoken to Av **** ******* who informed me that the memorandum was renewed on 14th September 2011 and will now remain in place for a further year. All that needs to done now is to wait for the Land Registry to complete the compulsory sale process. If this does not take place before the expiry date of the memorandum, then a further application will need to be submitted to the Land Registry again to renew it. Usually, proceedings to commence the process to renew the memorandum would be started around 1 month before the expiry date of the memorandum”. So you see even though I do have a Compulsory Purchase Order, she is saying I still need to renew it annually, another piece of conflicting advice.

Now all must be as clear as mud to you. My advice would be that if you do have a memorandum in your favour, talk to your Advocate immediately. Find out just exactly what action s/he has taken. Pin him/her down to find out where you are in the list of creditors and then you will at least know whether spending more money in pursuing this is financially viable.

The word negligent is used and seemingly is applied to us the client, which is somewhat confusing since none of us are legally trained. We have paid a so called professional to protect our interests and yet we are expected to know the process. The idea that the legal profession have no duty of care is a cop out, why not just come out an tell us the truth, duty of care is an obligation when receiving payment, what they really mean is, they do not give a toss.

Now I would like to throw out a challenge to the legal profession, if there is at least ONE of you who does give a toss. Please, please, explain how memorandums work and what, once we have obtained one, happens next? Collectively we have spent a fortune, I think we have paid for the right to know.

 

 

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