Developers Mortgages & Title deeds

[philcamp]

Hi

Can anyone help.

We have been to Cyprus on three occasions this year with the sole purpose of purchasing a property. So far we have put offers in on three which have all fallen through.

On each occasion the searches (carried out by our solicitor) showed that despite the property being owned privately, the land and their title deeds are owned by the original developer with all having hefty mortgages on them.

The last property we put an offer on (paid the reservation fee) had an AX number however according to the searches the title deed showed there are five registered owners of the land on which the property is built. For one of the owners, there is a court decision for a debt and they have registered it at the Land Registry blocking the property.

This whole process is now, not only costing us money each time we visite Cyprus, ( Flights, Hotels etc) let alone the solicitors fees incurred to-date, is putting a damper on what was to be an enjoyable experience.

In one respect we do have a good solicitor who is doing her job well, as far as protecting us from any liabilities however, under the current economic climate we can ill afford to continue to go on further property hunting trips unless we can get some assurances that we are not going to find ourselves in the same situation again.

Apart from that, anyone trying to sell with no title deeds or who have a developers with a mortgage are a risk especially if the developer goes bust .

Can anyone suggest anything that can be done to overcome such issues.

[Nigel Howarth]

Hi philcamp and welcome to the forum.

Buying property in Cyprus can be fraught with problems and I am pleased to hear that you have found a lawyer who is protecting your interests.

First, one thing you need to appreciate is that the ownership of a property is defined by the name in which the property is registered - i.e. the name on its Title Deed. So when you describe a property as "being privately owned", that is only true if the Title Deed of the property is registered in the name of that person(s) and its Title Deed bears their name(s) as its registered owner(s).

To overcome the issues you are facing, the simplest thing to do is to restrict your search to properties for which Title Deeds have been issued and which are registered in the name of the seller. Sellers will be able to provide you with a copy of the deed and you can check that with the Land Registry yourself - see http://www.news.cyprus-property-buyers. ... /id=004888 on how to do this. It will only cost you a few Euros and the information shown on the search certificate will include mortgages, loans and other claims such as a court decision for a debt (a 'memo').

Properties with Title Deeds do command a higher price because the financial risks are lower if you buy such a property.

If you find a property you wish to buy and then find it is mortgaged, under a new law that came into force earlier this year, you can approach the bank and repay an element of the mortgage and, in return, the bank will issue you with a waiver stating that it has no claim on the property. You can then pay the balance of the price to the vendor.

E.g. If the asking price is €250,000 and the bank wants €75,000 to clear the mortgage, you will pay €75,000 to the bank and then €175,000 to the vendor.

I hope that helps - and as I mentioned earlier, the simplest way to avoid most of the problems is to restrict your search to properties that have already had their Title Deeds issued.

Regards,

[Pantheman]

Nigel,

May I also point out that the title deed is not be all and end all.

Depending on how far you wish to take it, you need to check that the property is either detailed on the title deed or if not, that you at least have the necessary planning AND building consents to go with it.

Many private properties built would have the title for the plot and seperate permits, but not necessarily have final certificate. The FC may not be of much concern to many, myself included, since I have the title to my plot, anything on it is mine as long as I have my permits in place.

Hope that helps.

If you wish to speak further you could always email me seperately.

Good Luck.

Pan

[Nigel Howarth]

you need to check that the property is either detailed on the title deed or if not, that you at least have the necessary planning AND building consents to go with it.

Thanks Pan, you're absolutely correct. I got the Title Deeds to my land in 1996 - but it was just two months ago that the Land Registry issued me with an updated deed that included the house.

Cheers,

[philcamp]

Thank you Nigle and Pan both for your resonce. Much appreciated.

I will keep you posted on developments.

Regards

Phil