title deeds

Questions about selling property
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tonyb
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Joined: 29 Aug 2010 01:41

title deeds

Post by tonyb » 30 Aug 2010 20:26

hi a welcome to everybody on the forum.

I purchased an apartment in the Xylofagou area, Nr. Aiya Napa, off plan in 2004, it was completed and handed over in 2006. The purchase was carried out through a Cypriot solicitor and full payment was made by cash. The property is now legally registered in my name with Cyprus government.
I am looking to sell the property, but are still awaiting the title deeds. I employed a Cypriot lawyer to find out the facts and it emerges that There is an total unpaid amount of 50K euros owing on the land that all eight apts are built on.
I have being unable to contact the developer and it appears that my only option would be to find a cash buyer.

I would like to know what other options are open to me, and any advice I could give to a prospective buyer.

regards tony



Nigel Howarth
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Re: title deeds

Post by Nigel Howarth » 30 Aug 2010 23:25

Hi tony and welcome to the property forum.

Many people are in a similar position to yourself having paid for a property only to find out later that the developer has mortgaged the land on which it is built.

Just to clarify one thing you've said - your contract has been registered at the Land Registry. This doesn't mean that the property is legally registered in your name, it means that you have a claim on the property. But because your developer has mortgaged the land on which the apartments are built, the bank who loaned the money to the developer also has a claim on the property.

If the mortgage was taken out before your contract of sale was deposited at the Land Registry, then it takes precedence over your claim to ownership. If the mortgage was taken out after your contract of sale was deposited at the Land Registry, then your claim to ownership takes precedence over the mortgage.

(You can find out which of the claims - the mortgage or your claim to ownership - has precedence as this will be shown on the information your lawyer has obtained from the Land Registry).

If your contract was deposited at the Land Registry before the mortgage was taken out then you are 'safe' inasmuch as you do not run the risk of losing the property and the money you have paid if the developer's company collapses. However, the outstanding mortgage will present a problem for your buyer. When you sell, your contract of sale wll be withdrawn from the Land Registry and replaced with your buyers. But because your buyers contract will be deposited after the developer's mortgage, the mortgage will take precedence over your buyer's claim to ownership - and he would therefore face the threat of losing the apartment if the developer's company went bust.

The best way out of this situation is for the developer to repay part of the mortgage that relates to your property - which I guess would be one eighth of the €50,000. Having done that the developer needs to get a mortgage clearance certificate from the bank that loaned him the money stating that the bank has no clam on your apartment.

But one point to note is that if your lawyer got the €50,000 figure from the Land Registry, this is the amount of the loan when the mortgage was taken out, not the amount still outstanding. To find out the outstanding amount, your lawyer will need to speak with the bank that loaned the developer the money; howeve the bank is under no obligation to provide this information as it is confidential between the bank and the developer. If you lawyer has 'contacts' in the bank, they may divulge the figure.

Another way out of this situation is to approach the bank yourself and offer to repay the motgage that relates just to your property, but this will require the developer's agreement.

Unfortunately, even if you were to find a cash buyer, their lawyer would soon find out (if he/she was doing a proper job) that the property was mortgaged. Your buyer's lawyer would then approach the developer to get a mortgage release from the bank.

The situation is further complicated because you are not the property's legal owner (because its Title Deed has yet to be issued and registered in your name). As a consequence, you cannot sell the property without the consent and active co-operation of its owner, which in your case is the property developer.

In your current situation I cannot think of anything you can do to make the property more attractive to a potential buyer other than paying off/getting the developer to pay off the outstanding mortgage. (Once this has been done and the bank has issued a mortgage clearance certificate a potential buyer should be able to get a mortgage).

I'm sorry this reply is so long, but it's a difficult situation to explain.

I hope this helps.

Regards,


Nigel Howarth
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tonyb
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Re: title deeds

Post by tonyb » 31 Aug 2010 01:51

hi nigel
thanks for your prompt and detailed response.
I would like to find out if the developers company is still in business.
would this information be available on the internet.
reference your comment dealing with the developers bank.
would the bank issue a mortgage clearance certificate, if my part of debt was cleared
but in the event I was unable to contact the developer to seek permission.


regards tony



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Re: title deeds

Post by Nigel Howarth » 01 Sep 2010 14:09

Hi Tony,

There is a Registrar of Companies in Cyprus at http://www.mcit.gov.cy/mcit/drcor/drcor ... n/index_en you can search there at http://www.drcor.mcit.gov.cy/portal/pag ... tSearch_en to see if the company is registered.

There is one company in the Xylophagou area that is having problems SNK Venus Homes. There is a lawyer on the eastern end of the island who is trying to help its clients.

I'm afraid that the bank will not issue a clearance certificate until it has received all the money it is owed (or the loan is transferred to some other collateral).

Regards,


Nigel Howarth
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pippin
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Re: title deeds

Post by pippin » 02 Sep 2010 11:10

If the developer is no longer trading, one way to resolve the issue would be for all owners in the block to pay the outstanding loan between them. This would amount to about €6.250 each.
This is what has happened with other complexes and at least it then means that the owners can apply for their title deeds.



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Re: title deeds

Post by Nigel Howarth » 02 Sep 2010 11:50

Hi pippin,

Yes - there's a similar situation in Nicosia at the moment with the Froiber clients. In addition to the outstanding mortgage, they are having to pay the developer's unpaid taxes I believe.

Regards,


Nigel Howarth
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tonyb
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Re: title deeds

Post by tonyb » 03 Sep 2010 00:19

Thanks for everybody input concerning the title deeds.

Just an update to the discussion, nigel posted a link to the Registrar of Companies.
The developer ( felstar estates ) was still active, unless anybody knows differently.
I agree with the comments about the other owners sharing the money owed on the loan,
But like nigel said, I don't know if this is the full amount outstanding, the developer owes to the bank.
Finding this information is going to very difficult unless anybody knows differently.

regards tony



Pantheman
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Re: title deeds

Post by Pantheman » 25 Sep 2010 14:03

Nigel Howarth wrote:Hi Tony,

There is a Registrar of Companies in Cyprus at http://www.mcit.gov.cy/mcit/drcor/drcor ... n/index_en you can search there at http://www.drcor.mcit.gov.cy/portal/pag ... tSearch_en to see if the company is registered.

There is one company in the Xylophagou area that is having problems SNK Venus Homes. There is a lawyer on the eastern end of the island who is trying to help its clients.

I'm afraid that the bank will not issue a clearance certificate until it has received all the money it is owed (or the loan is transferred to some other collateral).

Regards,
Nigel,

That lawyer is longer active on this issue. Just so you know.

Cheers.

Pan


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Re: title deeds

Post by Nigel Howarth » 25 Sep 2010 17:41

Thanks Pan,


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paulcooke
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Re: title deeds

Post by paulcooke » 07 Jan 2012 23:51

Hi. Tony.
Only viewed your message today,
I also have a flat in the same block (Flat 2, ground floor.)
Very difficult to get any solid info about "Bambos" now, since he seems to have disappeared.
I was informed by my lawyer that the existing mortgage started off at 53,000cyp. but has not
been serviced for many years and could now be much more.
I have never even moved into my flat,primarily because I was informed that it was illegal to occupy
the property until a completion certificate was obtained. not much chance of that now I suppose.
One of the other tenants, Sheila Toft, told me that Bambos was supposed to be in court early last year,
but that was last I heard of him.

Please let me know if you have any further relevent info.
all the best
Paul Cooke



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