Bankcrupcy apartment in my block

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michelle22cat
Posts: 28
Joined: 09 Sep 2011 22:19

Bankcrupcy apartment in my block

Post by michelle22cat »

Hello

A couple of years ago one of the owners in my block was made bankrupt so the property vests wtih the Bank of Cyprus . I have emailed and written to the bank a couple of times to try to find out their intention but they either don't reply or tell me that can't due to data protection (I have told them that data protection does not apply as I know the owner is bankrupt and I don't want to know the details). The block needs painting and has recently had roof repairs and I think everyone is getting fed up of paying out (there are only another three of us in the block). Can you provide me with any advice on forcing the bank to contact me and also do you have any information on what the bank may do?? I know that there are a number of distressed properties on the island (as well as distressed owners :x )
Nigel Howarth
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Re: Bankcrupcy apartment in my block

Post by Nigel Howarth »

Hi michelle22cat and welcome to the forum.

I'm not sure I understand.

(1) Is it the owner of the block (the developer) who has declared/been forced into bankruptcy?

(2) Is a purchaser of one of the apartments in the block who has declared/been forced into bankruptcy?

If it's (2) then you have nothing to worry about. I expect a liquidator will be appointed who will sell the apartment to recover the debt. The bank will certainly not divulge the details or its intentions to you or anyone else.

I expect that the four of you are paying your Management Committee towards the insurance, upkeep and repair of the common areas. If there are unsold units in the block, the developer should be paying their contribution.

If it's (1) then you may have problems. A liquidator may be appointed who will try and get a contribution from all of you to repay an element of the bank's debt or face the prospect of losing your apartment. The passing of the new foreclosures law has run into problems, but there is a possibility that this may protect you.

But until something moves on the bankruptcy, you'll receive no money for that unit.

I'm also unsure whether you actually own the apartment? If you indeed own it (i.e. you have the deeds) your Management Committee can apply to a court for a 'memo' to be lodged against the bankrupt's apartment for the amount owed plus legal expenses and court costs. Although this will not get you the money immediately, it will prevent th eproperty being sold until the debt has been cleared.

Regards,
Nigel Howarth
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michelle22cat
Posts: 28
Joined: 09 Sep 2011 22:19

Re: Bankcrupcy apartment in my block

Post by michelle22cat »

Hi Nigel

Thanks for the reply. The empty apartment is owned by someone (not the bank). My frustration is that the bank will not correspond with me and the apartment has been empty for over 2 years.
I own my apartment and have the title deeds.

We don't have a management committee unfortunately, which is another issue! Some owners still have not paid for title deeds and I don't have everyone's names and addresses to even contemplate setting this up. I would be interested to know how I can find out this information.

Regards

Michelle
Nigel Howarth
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Re: Bankcrupcy apartment in my block

Post by Nigel Howarth »

Hi Michelle,

The first thing you need to do is set up a Management Committee. You can find out how to do this in the English language version of the relevant law at http://www.cyprus-property-buyers.com/f ... gs-law.pdf

When you (and those who are prepared to help) decide to call the inaugural meeting to set up the committee, you just need to put a note in everyone's mailbox notifying them of the date, time, venue and the agenda for the meeting.

Once a Management Committee has been correctly established, you should be able to get the names and addresses of all the purchasers from the Land Registry.

Regards,
Nigel Howarth
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michelle22cat
Posts: 28
Joined: 09 Sep 2011 22:19

Re: Bankcrupcy apartment in my block

Post by michelle22cat »

Hi Nigel

Just a quick update and query on my previous post.

The bank emailed me today to say that the property is still owned and the person is not bankrupt. After more research today however it was confirmed by an Insolvency Company/the Administrator that the person is bankrupt and has been for two years.

The problem is that as part of the bankruptcy the administrator has issued a disclaimer. This happens to discharge any liability and occurs when the liabilities outstrip any benefit in selling. The bank should have had a copy of the disclaimer and I am waiting for a copy of this. I should have also had a copy with other owners but we have not received a copy and I may have to take advice in the UK about this as I believe it invalidates the disclaimer.

It sounds like this approach has become common place.

I am now left with a situation where no one owns the property due to the disclaimer. I will ask the bank on next steps but they may not be interested. They or another interested party can "vest" and interest via the court which can lead to the property ownership being transferred. I don't really want to get involved in this as I have enough issues of my own.

I am worried as the me and the other two owners have already had to start to pay for block issues such as the roof etc and we can't let the apartment lie empty for much longer.

I wondered if you have come across this before and if you can give me any advice?

Thanks

Michelle
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Re: Bankcrupcy apartment in my block

Post by Nigel Howarth »

Hi Michelle

It is good that you're taking legal advice on this.

The company handling the insolvency will try to recover as much money as it can for the company that employed the (probably the bank). The bank is a 'secured creditor' and so is the Government.

So any money the liquidator manages to get will be paid to the secured creditors first. Anything that is left over will go towards paying the unsecured creditors, which will include your Management Committee.

It maybe worth your while seeking a court order to lodge a 'memo' against the property for the unpaid debt + legal & court fees. But you should check this with your lawyer to see if it will be of any benefit to you and the other owners.

Regards,
Nigel Howarth
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michelle22cat
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Joined: 09 Sep 2011 22:19

Re: Bankcrupcy apartment in my block

Post by michelle22cat »

Hi Nigel

Further to my previous posts I have sent the bank a copy of the discharge notice relating to the apartment in my block. The discharge means that the insolvency company in the UK will not be pursuing any debt.

The bank apparently were served with a copy of the discharge notice in 2013 but they have failed to do anything with the apartment (secure it or try to sell it). I am concerned about the empty property affecting our block of four.

I have asked the bank if they are going to auction the property and I am waiting for a reply. There must be a number of other apartments in this situation.

I wondered if the banks are likely to start moving on off loading some of these properties soon, especially following on from the foreclosures bill?

It just feels at present like they are just putting their heads in the sand.

I would have thought they would get at least 30,000 euro at auction for a 1 bed apartment.

Any thoughts would be appreciated.

Regards

Michelle
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Re: Bankcrupcy apartment in my block

Post by Nigel Howarth »

Hi Michelle

I cannot speak on behalf of the bank, but I think the sale/action of the apartment will be on their priority list. And if a discharge notice has been issued I think the bank can act now without having to wait for the foreclosures law.

I expect the Bank of Cyprus will focus its attention on dealing with their 30 largest debtors from 45 companies who together have non-performing loans amounting to €5.26 billion; half of all the non-performing loans held by the bank.

I'm afraid you'll need to wait until you hear from the bank.

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Nigel Howarth
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michelle22cat
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Joined: 09 Sep 2011 22:19

Re: Bankcrupcy apartment in my block

Post by michelle22cat »

Hi Nigel

Believe it or not two years on this is still not resolved.

The bank are still stating that they don't own the property but I have given them copies of the bankruptcy letter from the UK. The management company have contacted the owner who has confirmed he was made bankrupt in 2013. I presume the owner has made no payments since 2013.

Any idea how the management committee can force the bank to address this?

Michelle
Nigel Howarth
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Re: Bankcrupcy apartment in my block

Post by Nigel Howarth »

Hi Michelle

Looking back through our conversation I see that there are only 4 units in the block. I therefore doubt whether the building has been registered as jointly owned but you'll need to check with the Land Registry.

(The Law states that where a building consists of at least five units then it should be registered as a jointly owned building at the Land Registry. Where there are between two and four units then, if the owners of at least 50% of the joint ownership or any two owners of units wish, they make a request that these premises are also registered as jointly owned.)

If the block isn't registered as jointly-owned then each unit only has to pay for the repairs to that particular unit. So someone on the ground floor would not have to contribute towards the cost of repairing the roof.

In this situation I don't think there's any way that you can force the bank into doing anything. I suggest you speak with your lawyer to see if anything can be done.

Regards,
Nigel Howarth
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