Property purchasing shambles throughout Cyprus – caveat emptor

Where would anyone begin to right the wrongs occurring in the Property Market in Cyprus?  How have two separate Governments allowed the whole situation to turn into such a shambles?

The signs were there many years ago but, in true ostrich fashion, both Governments stuck their heads in the sand and hoped it would ‘self-right’.  Clearly both sides thought that the property boom would go on forever, that the Builders who kept taking mortgage after mortgage would have so many orders for their new builds that as soon as one development finished, the mortgages they had taken could be repaid by the new money coming in and poor old Joe Soap, the punter need never be any the wiser.

Well of course any experienced business person will tell you, nothing lasts forever. Trends are cyclical; boom is inevitably followed by bust.  Now a savvy builder would have some rainy day money to ride out the storm and then be in a position to enjoy the next boom.  Sorry, it seems we do not have any savvy builders in Cyprus.  I certainly doubt that we have any experienced builders in Cyprus.  Certainly in the North, a good build is a rare thing.

Whilst I make no excuses for the builders in Cyprus, I most certainly question the ethics of the Banks who just continued to throw money at the builders, knowing full well that most were already mortgaged up to the eyeballs.  What sort of lending policy is that?  They are charged to apply due diligence when advancing money entrusted to them by their account holders.

The one thing purchasers have in common is a Contract of Sale, a Contract on which you pay stamp duty to the tax office of the Country, whether it be North or South. Now you could be forgiven for thinking that the Government having received your stamp duty monies into their coffers have a duty of care to you.  Now in the North you can immediately register your interest in the plot you are buying by registering your Contract of Sale at the Land Registry; surely that gives you some protection?  Well yes, it makes you first creditor on your own land.  Surely it gives you more than that, you would think so, but there have been occasions when a memorandum has been lodged behind a Contract, making them the second creditor on your land, so the law brought in to protect purchasers in 2008 isn’t affording you complete protection, in fact it is eating any equity you might have been accruing.

Your Contract, signed by both the Vendor and you the Purchaser would most certainly have said your plot was mortgage free and the Vendor would undertake to keep it that way until transfer of title could take place.  Whilst we know some Vendors honoured that clause, we also know too many, even before the ink was dry on the Contract, rushed off to their pal, the local Bank Manager, and raised money using the land he had just sold you as security.  What an honourable man you were dealing with.  What a diligent Bank Manager not to ask any questions.  His friend needs a mortgage; he has money, not his, to facilitate his friend’s needs.  After all, his friend the Vendor has had the same old 4 x 4 for at least a year so obviously, he must have a new one

The antiquated laws and the ridiculous amount of time it takes for Permission to Purchase to be granted, gave the rogue Vendor the opportunity to be able to carry out this scam.  I am quite sure in my mind that some Bank Managers were complicit in these crimes.  This is fraud, this is criminal, this cannot be ignored, we will not go away; we demand justice!

 

Print Friendly, PDF & Email

Comments are closed.