mortgaged land

Questions about selling property
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madmax
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Joined: 24 Jan 2008 23:13

mortgaged land

Post by madmax » 22 Nov 2008 14:45

Dear Nigel, many thanks for previous reply but our saga of selling our appt goes on.We have eventually heard from our solicitor via e mail despite up to three phone calls a day to contact him.
The reply we have is that the purchaser has got approval from the Hellenic bank for a mortgage but the developers do not work with this bank on this project but only the laikki bank .The Laikki bank have refused them the mortgage.The developers have have refused to sign the neccessary guarantee papers therefore the sale is off.
We obviously are extremly concerned that we now have a property that we have no title deeds for and no way of selling unless they have a loan with a bank of the developers approval.Why does the developer have a say in a property that we have bought and paid for in full.The money would go to us, the developer would get their fee for change of names and everyone should be happy.
Is there anything we can do about it.Your advice would be gratefully received many thanks Madmax



Nigel Howarth
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Re: mortgaged land

Post by Nigel Howarth » 22 Nov 2008 15:46

Dear Madmax,

The problem is that your developer is considered to be the owner of your apartment - even though you have paid him in full. And until such time as the Title Deed to your apartment has been issued in your name, you will need the agreement of the developer to sell.

What happens when you sell is that your Contract of Sale is withdrawn from the Land Registry allowing your developer to enter into a new Contract of Sale with your buyer. Your buyer pays the property developer who then passes the proceeds of the sale (less any expenses) onto you.

Developers generally are 'reluctant' to allow you to sell your property - and many of them charge 'contract cancellation fees' which can amount to tens of thousands of Euro. But a lawyer has recently stated that he considers this practice to be illegal and has urged the Cyprus Government to examine the matter with a view to ending the practice.

(Developers make more money by selling new property - and will put obstacles in the path of buyers wishing to sell). Also, as your prospective buyers have discovered, banks are reluctant to grant mortgages to those buying resale property unless it has its Title Deeds.

I think the only thing you can do in this situation is to have another lawyer look at your contract to see if there's any way out of the situation. If you can email it to me, I can give you my view (although I must stress that I am not a lawyer).

Alternatively, your prospective buyers need to find another way to raise the money.

But there may be a further twist - I think you mentioned in an earlier message that the developer asked you how much you wanted for the property?

Once a sale goes through he will then pass you that amount of money (less charges as acting as your estate agents). In reality what happens is that they sell it for more than you're willing to accept and then pocket the difference.

I wrote an article about how this operates - The Resale Property Scam.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
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madmax
Posts: 6
Joined: 24 Jan 2008 23:13

Re: mortgaged land

Post by madmax » 23 Nov 2008 16:18

Hi Nigel,thank you for your prompt reply.I have looked at our agreement for sale and the only part which we think might shed some hope states
"the vendor undertakes to cause or create no delay in applying for a separate title deed and undertakes to do all that is necessary so that a separate title deed for the property sold may be issued and the vendor also undertakes to remove all encumberences if any which might other wise prevent or delay a separate title deed being issued"
I am not sure how to send the rest of the agreement via e mail and to which e mail address?If you have a fax no I could send it on Monday many thanks for your
help and advice kind regards Madmax



Nigel Howarth
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Re: mortgaged land

Post by Nigel Howarth » 23 Nov 2008 17:45

Hi Madmax,

I'll send you an email with my email address. If you look through your contract, it may have a clause in it that looks something like the following:

“If at any time after the signing of the present agreement the Purchasers desires to sell the said Property, they will have an absolute right in doing so as they are deemed to be the beneficial owners of the Property providing that the Purchasers have fulfilled all their obligations as herein provided. The Vendors shall be obliged and cannot in any way object to and /or deny and/or withhold their consent to sign any necessary cancellation contract and new contract of sale with the new purchaser(s)”

This is often called a 'right to sell' clause.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

madmax
Posts: 6
Joined: 24 Jan 2008 23:13

Re: mortgaged land

Post by madmax » 23 Nov 2008 18:13

Hi Nigel, sadly there is no such clause in the sale agreement and I can t get my scanner to work at the moment to send you the whole document.I don t really know where to go with this from here.We were waiting on this sale to emigrate to Australia but those plans look like they may have to be shelved any further help would be gratefully received. I will try the scanner again on Monday many thanks Madmax



Nigel Howarth
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Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
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Re: mortgaged land

Post by Nigel Howarth » 23 Nov 2008 21:52

Hi Madmax,

I know you find it difficult to get your lawyer to respond to your emails - the only thing I can suggest is that you keep on at him to see what can be done in this situation.

You could always ditch your lawyer and get another one - but that will involve you coming over here and sorting him out.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

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