North Cyprus now a paradise for the investor willing to take a risk?

At first glance, the idea of currently buying property in north Cyprus seems ridiculous. The Orams decision means that a property purchaser with assets in an EU country can now be pursued in those courts for occupying land which is owned by a Greek Cypriot currently prevented by the north Cyprus government from using it. Greek Cypriots often call the buyers of such land “carpet baggers” a term also used for people who opened an Abbey bank account years ago, invested £100, and ended up with a hundred shares worth over £1000. They are also called “cheapskates” because of the low price paid and the fact that the property is owned by a Greek Cypriot according to international law, plus it’s a dodgy deal.

For some people the current situation would be seen as ideal for obtaining a bargain from a panicky EU citizen occupying a property in the north. If they have for sale a small property with a pool on an estate there is a possibility that a speculator would consider taking a risk buying such a property, especially if the chances of them being sued were low and the time it took to do so was several years. Such a property priced around £50,000 and returning an average holiday rental income of £500pw for 20 weeks a year would give a good return on that investment, much better than a “safe as houses” High Street bank. Any whiff of a writ and the buyer could probably quickly shift the property to a new buyer for amount they bought it for. The GC would then be unable to do any more than ask for lost back rent for a few hundred square meters of their field, shared with several other buyers of EU and non-EU nationalities.

All this supposes a north Cyprus government now determined to remove the internal problems preventing such a quick turnover, i.e. PTP and title deeds in months rather than years. In this way the deeds for an unmortgaged property could be transferred into the purchaser’s name at the time of full payment instead of years later; which left a period during which the seller was able to mortgage the property, not make any payments, and go bankrupt.

There is also going to be a few problems for GCs prosecuting people who buy already constructed properties rather than buying land and then building on it. Technically any sales contract in north Cyprus is not recognised internationally and so in the eyes of EU law these people are “squatters” and nothing more. They cannot be asked to demolish a building any more than a squatter in the UK can be asked to do so. The Orams unfortunately were not in this position. How much can a GC sensibly ask a court to award them in a case involving a squatter living on a part of a field if they are not guilty of criminal damage, e.g. building a villa on it? If the “squatter” admits that they are doing just that and does not have to pay the fees of a lawyer then this has to be minimal. Starting a court case for someone who admits guilt would be a waste of the court’s time once a precedence is set that, say, the lost rental would be 10% of the value of the small patch of  land for each year the squatter has occupied it.

Another legal sticking point could be a case where the “buyer” never lives in the property and instead rents it out to holidaymakers. If they never built the villa then it will be the temporary tenants who are breaking the law. Perhaps the south Cyprus government will rule that every tourist is a criminal if they land at Larnaca and board transport destined for the north? Time to stop using the airports in the south? Time for those with property in the north to never again set foot in the south until there is a settlement? Time to stand up and be counted as a member of the TRNC community and not another EU country? I believe it is time to show that the Orams case is a fresh start for the TRNC and not the end as doubters would have us believe.

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