Memorandum To Embargoed: The Tragedy of Kulakzis 5

We are writing to you as an organisation concerned about upholding human rights and that has some influence with the Government of TRNC.

We would ask you to inform the Government how much TRNC international reputation is being damaged by them not intervening to prevent this illegal activity which has consequences far beyond the people involved.

The Kulaksis 5 case not only ignores residents’ human rights under the UN Declaration of Human Rights but is also in clear contravention of the TRNC’s own Laws. We can only hope that you will appreciate that this is a very important case not only for homebuyers but almost everyone living in TRNC.

We contend that Akfinans Bank Ltd (ABL) and those associated are depriving us,the Kulakzis 5 home owners of our rights human rights under UN Declaration of Rights – Articles, 2, 6, 7,8 &17, ABL are also in clear contravention of TRNC Mortgage Law 11/78 Section 21 which details the conduct and process to be followed by a lender giving a mortgage.

ABL have hoodwinked the TRNC Courts by getting orders to repossess the land whilst not declaring that ABL were fully aware of all the houses and of people living in them before granting any mortgage.

Subsequently ABL illegally took possession of two houses without the necessary Courts permission.

Latterly and presently, in direct contravention of law, ABL are harassing the house owners of Kulakzis 5 and are claiming erroneously that they are the owners of the houses.

ABL have taken electricity from the sole builders supply to the site and despite requests from us have to date refused to pay for their share of any usage, so we contend they are stealing electricity.

ABL have also threatened draconian legal action to a newspaper group that reported this action, in order to prevent them from publishing anything further.

Eminent legal opinion is viz:

1)    The houses were built for home buyers by Kulaksız Construction Ltd (KCL) according to the contracts signed between KCL and the home buyers. Home buyers did nothing against the laws of TRNC. They followed all conditions of the contracts. They paid the sale prices of the homes. In 2004 the possession of the houses were handed over to them. They have been living in their homes since 2004. The title deeds where not issued in time because of slow administration in TRNC and the homebuyers cannot be blamed for this. Home buyers did not consent to a mortgage on the land. ABL loaned money to KCL and mortgaged the land without knowledge of the home buyers. The mortgage is a contract between ABL and KCL only. It is a basic principle of law that two people cannot make an agreement between themselves that interferes with the rights of other people. ABL is presuming that they can include the rights of other people in the agreement they made with the KCL. ABL claim that they may mortgage a piece of land declaring that it is a bare land and grab everything over it. Whereas according the laws all over the world this is a fraudulent act. Such a mortgage is not valid. The houses of the home buyers cannot be taken away from them without their consent. This is the rule of law in all countries and TRNC is not an exeption.

2) The Bank argues that the houses over the land could not be separated from the land. Therefore the Bank was entitled to sell the land together with the houses and acquire them.

Eminent legal opinion is that when an immovable property is mortgaged everything on the land is not included unless specified in detail. Such an argument put by ABL has never been accepted by any Court anywhere in the world. It is against the basic principles of the law. It is against the laws of TRNC also. According  to Section 21, of 11/78  Mortgage Law of TRNC the creditor before mortgaging the property is obliged to search and see whether some other people have any right on the mortgaged property or not. The law obliges the creditor to name even a tenant residing on the property. This obligation of the law is not for decorative purposes. Unfortunately the Bank failed to mention that the home buyers’ homes existed on the land. They did not ask for the consent of the home buyers. Therefore the mortgage contract may not include the homes of the home buyers.

3) The Bank argues that the rules of TRNC Mortgage Law can be ignored. They believe that they do not have any obligation to search and declare whether other people have right on the property or not. If the Bank declares that it is a bare land it should be presumed to be a bare land and every house on it can be absorbed.

Eminent legal opinion is the law cannot be ignored by Banks or by any authority. According to the clear wording of the 11/78  Mortgage Law of TRNC  the Bank is obliged to search and declare any right on the property. If the Bank does not follow the rule of law this is the Banks own problem. A Bank or anyone else cannot benefit from its own faults. If the law obliges the creditor to mention the names of people owning houses on the property this is not a simple formality. This means that the rights of other people on the property should be respected. This means that home buyers contracts remain valid and any attempt to sell the land together with the houses is illegal. The Bank may take over what is owned by the debtor, but nothing more. Similarly if a Bank mortgages a land but allows the landowner to build houses on it and sell them, the contracts of sale are binding for the Bank as well. The Bank is obliged to respect the contracts. If the Bank for one reason or another takes over the rights of the Contractor this means that it has replaced Itself with the Contractor and will be obliged to fulfil the conditions of the contracts. So it is the duty of the Bank to obtain the title deeds of the houses as the Contractor was obliged to do and transfer the title deeds to the homebuyers. After that happens what is left can be owned by the Bank.

We hope you will appreciate that the above mentioned arguments are of concern to all Cypriots as well as overseas home buyers. We hope you will understand that these arguments are related to everyones’ welfare and future life in TRNC.

You will see that the results of the Government’s non-intervention in this matter to date is one of the main causes of the emigration of previously contented residents and a major factor why new property sales have virtually stopped. There is a great lack of trust.

We are also informed that recently up to 20 containers of peoples personal effects were leaving the TRNC to every one coming in. This has made the TRNC economy nosedive by what we estimate to be up to £250-300 million a year of lost home, car, furniture and consumable sales and taxes.

You may well ask the question, can the TRNC afford this reversal of fortune compared with the boom of 5 years ago brought about by the perceived attractiveness and fairness of the TRNC.

Summarising we would like you to invite the TRNC Government to realise that their passive attitude has until now encouraged illegality in TRNC. Therefore they should now step in and correct matters to ensure that:

a)    The rule of law prevails in North Cyprus and any indirect way of larceny is not allowed.

b)    That homebuyers contracts signed in good faith are valid and should be respected. In any civilised society the Government is the ultimate guarantor of the contracts and is obligated to fulfil their conditions.

c)    That home buyers’ homes cannot be taken away from them without their knowledge and by fraudulent tricks. There should be heavy penalties for those who commit such a crime or hoodwink the Courts.

d)    When a landowner or creditor allows a home to be built or sold on his land he cannot ignore the sales and grab the homes of home buyers. They are also bound by the original contract.

e)    The rules of 11/78 TRNC Mortgage Law accepted in 1978 cannot be ignored by any Bank or by any authority. They should be unequivocally upheld by the Courts. This means that the creditors when mortgaging a property are obliged to search and declare the houses on the property and that the contracts of the homebuyers remain valid and are binding on the creditors also.

After considering these facts and arguments we trust you will use your influence to persuade the Government of TRNC to intervene immediately, to suspend all actions regarding the re-possession of homes and correct this injustice by improving home security of all thus preventing further damage to the prosperity of TRNC.

Richard Barclay, on behalf of the Kulakzis 5 Home Owners

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