Mortgaging property without title deeds

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Peter A
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Joined: 21 Mar 2008 03:07

Mortgaging property without title deeds

#1 Post by Peter A » 29 Mar 2008 18:08

My apartment is now complete and I have tried to obtain a mortgage against it but have had no success. The problem is that there are no title deeds and that the developer is unwilling to sign any statement that they will relinquish their claim against the property when title deeds are issued. The developers as I understand have no mortgage against the development but are unwilling to place themselves in the position of a guarantor.

Do you know of any lenders who will offer mortgages on the strength of the contract which appears to state that the property will be free from encumberance once the title deeds are issued?

Thank You

Peter A



Nigel Howarth
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Re: Mortgaging property without title deeds

#2 Post by Nigel Howarth » 05 Apr 2008 14:18

My apologies for the delay Peter, I've only just spotted your post.

There are many problems associated with not having Title to your property - the ability to raise a loan using the property as collateral is one of them. Without Title Deeds:
  • You do not own your property and are therefore unable to enjoy the full benefits of property ownership, including the right to sell or transfer it to anyone you wish without reference to its registered owner.

    Should you wish to sell, you need to cancel or transfer your contract of sale at the Land Registry enabling its registered owner to enter into a new sale agreement with your buyer. I know some buyers who have been charged CYP 20,000 by the registered owner, a disreputable property developer, for this 'privilege'. (But a recent Court ruling may help put an end to this despicable practice).

    Under certain circumstances the legal owner can still raise a mortgage on the land on which your property is built without your permission, even though you may have paid him for it in full.

    Without Title Deeds you are unable to raise money against your property and unable to access any of the capital you have tied up in it through equity release loans and other schemes.

    As the Cyprus financial institutions currently refuse to grant mortgages on resale properties without Title Deeds, anyone wishing to buy your home must be a cash buyer.
I'm a bit confused when you say "the developer is unwilling to sign any statement that they will relinquish their claim against the property". Do you know what these claims are?

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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MarkN
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Joined: 27 Mar 2008 13:29

Re: Mortgaging property without title deeds

#3 Post by MarkN » 17 Apr 2008 12:54

Peter,

The only thing that I would add to Nigel's post is that most of the banks in Cyprus will only lend for the purchase of a property. They are currently reluctant to allow any 'refinancing' or 'equity release'. I have recently had a case where the purchaser of a property hadn't finalised all of the mortgage process and in the interim had to pay the full amount to the seller. The bank then refused to advance any loan as, in their opinion, the buyer was now not borrowing for the purchase of a property as he already owned it!

Good luck!

All the best

Mark


Mark Nowell
3D Global Financial Services
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P.O. Box 53720
Limassol 3317
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