Transfer of loan ahead of title deed issue

Do you have a problem getting your Title Deeds?
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michellecat
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Joined: 08 Jun 2011 21:30

Transfer of loan ahead of title deed issue

Post by michellecat »

Hi Nigel

We have received an email from our solicitors today stating that they have been contacted by the Developers who have said that the title deeds will soon be ready.

The solicitor, as he has power of attorney has asked us if he can sign to transfer the loan we have on the property to the new title deed rather than have it transferred once the new title deed is issued. We have been told that by doing this it will save time and money.

Part of me is pleased that the title deeds are nearly ready, four years on; however, I smell a rat with this and I am worried about agreeing to this.

Any advise???

Regards

Michelle
Pantheman
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Re: Transfer of loan ahead of title deed issue

Post by Pantheman »

Michellecat,

I am not sure exactly what you mean, but I would not be transfering any loans until the title deeds are in your name and the bank will then use them as the security.

By getting the title deeds ansures there are no developer emcubrances on the land and that your loan may well have precedence over any developer loans, by transferring at this stage you may be putting yourself behind the developer loans that could cause you problems.

Sorry if this sounds a little confusing, but without fully knowing all the details or understanding exactly what you are asking, I thought best not to transfer anything to be on the safeside.

Good luck.
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Nigel Howarth
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Re: Transfer of loan ahead of title deed issue

Post by Nigel Howarth »

Hi Michelle and welcome to the forum.

Like Pan, I don't know what you mean. Can you provide some more information about exactly what your lawyer is proposing please?

Rgds,
Nigel Howarth
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michellecat
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Joined: 08 Jun 2011 21:30

Re: Transfer of loan ahead of title deed issue

Post by michellecat »

Hi Nigel,

This is exactly what the Solicitor has said:-

"In order for the developer to proceed with the paperwork they have asked Kritos (the Solicitor), as he holds Power of Attorney for you both, to sign a document to say that it is OK to transfer the loan you have on the property to the new title deed now rather than have it transferred once the new title deed is issued. So basically all the paperwork would be in place now rather than later. By doing this now it will save you time and money and will make the final process for getting your title deed quicker."

An email today stated

Kritos advises that there is no problem or issue with authorizing us to sign the requested form and it is not of any benefit to the developer. Many developers are now choosing to complete the title deed procedure this way to help speed up the process, partly due to the bad press and partly due to providing a quicker and more efficient service. A developer is not allowed to have a mortgage on the land on which a project was built when the title deeds are ready to be issued and so this procedure will not benefit the developer in any way other than keeping their clients happy.

I also nearly fell through the floor at the cost of the transfer deeds and other costs - it comes to around 6000 euro on a property I paid 93 cyp pound for.

I am worried about the whole thing so any advise would be appreciated.
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Re: Transfer of loan ahead of title deed issue

Post by Nigel Howarth »

Thanks Michelle,

OK - now I understand. This is how the system works:

When the Title Deed is issued, it will be issued in the name of the developer. Once he has cleared his mortgage, paid his taxes, etc, title to the property can be transferred to you. Once you have paid the Property Transfer Fees at the Land Registry, in a new Title Deed will be drawn up which will bear your name as the property's registered owner.

As you have a mortgage on the property, this will need to be declared to the Land Registry (see http://www.moi.gov.cy/moi/citizenschart ... enDocument ) and the Land Registry will charge 1% of the balance of the mortgage.

When you say you paid CYP 93 - did you mean CYP93,000? Based on that figure, the Property Transfer Fees will be €6,236.40.

Regards,
Nigel Howarth
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Pantheman
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Re: Transfer of loan ahead of title deed issue

Post by Pantheman »

michellecat wrote:Hi Nigel,

This is exactly what the Solicitor has said:-

"In order for the developer to proceed with the paperwork they have asked Kritos (the Solicitor), as he holds Power of Attorney for you both, to sign a document to say that it is OK to transfer the loan you have on the property to the new title deed now rather than have it transferred once the new title deed is issued. So basically all the paperwork would be in place now rather than later. By doing this now it will save you time and money and will make the final process for getting your title deed quicker."

An email today stated

Kritos advises that there is no problem or issue with authorizing us to sign the requested form and it is not of any benefit to the developer. Many developers are now choosing to complete the title deed procedure this way to help speed up the process, partly due to the bad press and partly due to providing a quicker and more efficient service. A developer is not allowed to have a mortgage on the land on which a project was built when the title deeds are ready to be issued and so this procedure will not benefit the developer in any way other than keeping their clients happy.

I also nearly fell through the floor at the cost of the transfer deeds and other costs - it comes to around 6000 euro on a property I paid 93 cyp pound for.

I am worried about the whole thing so any advise would be appreciated.
Nigel a couple of points.

if he has a mortgage, it will already be decalred as the LR will be holding it in security. perhaps it needs to come out and be resecured and the perhaps another 1% charge??

In additiona, the Transfer tax you quote would be correct for a single owner, but if it were on joint names then the tax would be 4766.97 Euros. I guess the difference may be the lawyer charge???
Good luck
For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Real Estate Company. Reg. No. 1145, Lic. No. 572/E
Member of ETEK Registration No. A201999
https://www.fsbproperties.com
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Re: Transfer of loan ahead of title deed issue

Post by Nigel Howarth »

Hi Pan,

I have to admit that I am still a bit confused about this.

Michelle's loan will not be recorded on the current Title Deed, but it will show when her contract of sale was deposited and how much she paid. (The developer most probably acted as a guarantor for her loan with the bank).

But when the separate Title Deed for her property is issued, her loan needs to be recorded against that deed (amd the LR will charge 1% of the amount outstanding).

I also have a problem with the terminology as mortgages for properties without Title Deeds are described as 'loans' rather than 'mortgages'. I believe the reason for this is that the loan cannot be registered until the individual Title Deed is issued. But once the Title Deed to Michelle's property has been issued her loan can be registered at which time it becomes known as a mortgage.

And I take your point about buying in joint names.

Perhaps if Michelle were to ask her lawyer for a breakdown of the costs, it might make things clearer for us.

Regards,
Nigel Howarth
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