Other owner's default payments

[lilykmac]

Hello
We have a buyer for our apartment but the only problem we are having is with Laiki bank. Apparently on our block one of the owner has defaulted on their payments and a memo has been sent to them but we have not received anything. For some reasons because of this we have to wait to hear from Laiki bank to release our apartment for sale? we have now been waiting for over 1 month and still have not received an aswer. We can not understand why other owner's default payment should affect us.
It is very frustrating, particularly in this climate when we have a buyer who is keen to complete the sale but we can't finalise because the hold up from the bank.
The thing is soon as we complete the sale we can pay our home loan of with Laiki bank, this must be a positive thing for the bank?
Look forward to your answer

Hello
We have been told is Laiki bank who has sent the memo. Can I contact the bank myself to get an answer whether they can waiver the memo on our apartment. Iam asking this because the solicitor and estate agent have told us if we do it will be a disaster if I contact the bank. Is this right, why? because I can't see why when this is affecting us (the owners).
Thank you I look forward to your advice

[Pantheman]

Hello
We have a buyer for our apartment but the only problem we are having is with Laiki bank. Apparently on our block one of the owner has defaulted on their payments and a memo has been sent to them but we have not received anything. For some reasons because of this we have to wait to hear from Laiki bank to release our apartment for sale? we have now been waiting for over 1 month and still have not received an aswer. We can not understand why other owner's default payment should affect us.
It is very frustrating, particularly in this climate when we have a buyer who is keen to complete the sale but we can't finalise because the hold up from the bank.
The thing is soon as we complete the sale we can pay our home loan of with Laiki bank, this must be a positive thing for the bank?
Look forward to your answer

Hello Lilykmac and welcome to the forum,

By an individual defaulting does not affect you. If a memo has been placed on your block, it is against the title that the develop owns. I am guessing you have no title deeds.

The memo is placed when the land owner (in this case the developer) owes money and does not pay. It is for the person/organisation that placed the memo to remove it after payment.

It is like putting a charge on the property to prevent a sale in the UK.

You need to find out who put the memo. You can do a property search at the land registry. You fill in a form N50, take your contract of sale and passport. it'll cost you about €9. and you get it within a couple of days. This will also tell you is the developer has a mortgage on the land, but it does need some deciphering I must warn you.

Hope that helps

[Nigel Howarth]

Hi lilykmac

I expect the Laiki bank is dealing with other matters at the moment.

As Pan has said, the memo on the land will not affect you - and the search he suggests will highlight all memos and any other charges there may be. I wrote an article about three years ago on how to get a Title search that you can read at http://www.news.cyprus-property-buyers. ... /id=004888

I'm not sure why you are asking the bank to release your property for sale?

If your buyer doesn't need a loan to buy the property, your buyer should be able to use an assignment/vesting contract. This will put him in exactly the same position as you when you bought the house - and it avoids you having to negotiate with the developer to sell the apartment. At the same time the assignment contract is deposited at the Land Registry you will need to provide a Tax Clearance Certificate from the Inland Revenue showing that you have paid Capital Gains Tax.

Regards,

[Pantheman]

Hi lilykmac

I expect the Laiki bank is dealing with other matters at the moment.

As Pan has said, the memo on the land will not affect you - and the search he suggests will highlight all memos and any other charges there may be. I wrote an article about three years ago on how to get a Title search that you can read at http://www.news.cyprus-property-buyers. ... /id=004888

I'm not sure why you are asking the bank to release your property for sale?

If your buyer doesn't need a loan to buy the property, your buyer should be able to use an assignment/vesting contract. This will put him in exactly the same position as you when you bought the house - and it avoids you having to negotiate with the developer to sell the apartment. At the same time the assignment contract is deposited at the Land Registry you will need to provide a Tax Clearance Certificate from the Inland Revenue showing that you have paid Capital Gains Tax.

Regards,

Nigel,

It's all very well using the assignment contract method, but, this would just be putting a new unsuspecting buyer into a possible hole to take on the problems the seller already has.

Assignment contracts should only be used, IMHO, when all the checks have been made and there are not present encumbrances or problems on/with the property.

[Nigel Howarth]

Assignment contracts should only be used, IMHO, when all the checks have been made and there are not present encumbrances or problems on/with the property.

I agree Pan - as well as avoiding contract cancellation charges one of the benefits of assignment/vesting contracts is that the new buyer will be unaffected by mortgages and other claims lodged after the original buyers contract was deposited at the Land Registry.

Rgds,

[Pantheman]

Assignment contracts should only be used, IMHO, when all the checks have been made and there are not present encumbrances or problems on/with the property.

I agree Pan - as well as avoiding property transfer fees one of the benefits of assignment/vesting contracts is that the new buyer will be unaffected by mortgages and other claims lodged after the original buyers contract was deposited at the Land Registry.

Rgds,

Nigel, can you please explain ' .... as well as avoiding property transfer fees ....'

Thanks

[Nigel Howarth]

Apologies Pan - I meant to say contract cancellation charges - I've edited the original.

Cheers,

[lilykmac]

Apologies Pan - I meant to say contract cancellation charges - I've edited the original.

Cheers,

Thank you for your reply. It all sounds quite complicated. Should my solicitor be able to advice me what to do because it seems at the moment we are stuck with the sale and we are frighten that the potential buyer will pull out.
So by reading what you are saying there are ways that we can complete the sale despite the problem with the default payment from the developer.

[Nigel Howarth]

Should my solicitor be able to advice me what to do because it seems at the moment we are stuck with the sale and we are frighten that the potential buyer will pull out.

Yes - he should be able to advise you - that's what you're paying him for.

As Pan has said, you need to do an N.50 search at the Land Registry to get more details of the memo. Then your lawyer should speak to the bank and get it lifted for your property (the bank may issue a waiver).

(If the memo is against the developer, there's a good chance that the titles of all the properties registered in his name will have an identical memo lodged against them.)

Regards,

[lilykmac]

Should my solicitor be able to advice me what to do because it seems at the moment we are stuck with the sale and we are frighten that the potential buyer will pull out.

Yes - he should be able to advise you - that's what you're paying him for.

As Pan has said, you need to do an N.50 search at the Land Registry to get more details of the memo. Then your lawyer should speak to the bank and get it lifted for your property (the bank may issue a waiver).

(If the memo is against the developer, there's a good chance that the titles of all the properties registered in his name will have an identical memo lodged against them.)

Regards,

Hello
We have been told is Laiki bank who has sent the memo. Can I contact the bank myself to get an answer whether they can waiver the memo on our apartment. Iam asking this because the solicitor and estate agent have told us if we do it will be a disaster if I contact the bank. Is this right, why? because I can't see why when this is affecting us (the owners).
Thank you I look forward to your advice

[Pantheman]

Should my solicitor be able to advice me what to do because it seems at the moment we are stuck with the sale and we are frighten that the potential buyer will pull out.

Yes - he should be able to advise you - that's what you're paying him for.

As Pan has said, you need to do an N.50 search at the Land Registry to get more details of the memo. Then your lawyer should speak to the bank and get it lifted for your property (the bank may issue a waiver).

(If the memo is against the developer, there's a good chance that the titles of all the properties registered in his name will have an identical memo lodged against them.)

Regards,

Hello
We have been told is Laiki bank who has sent the memo. Can I contact the bank myself to get an answer whether they can waiver the memo on our apartment. Iam asking this because the solicitor and estate agent have told us if we do it will be a disaster if I contact the bank. Is this right, why? because I can't see why when this is affecting us (the owners).
Thank you I look forward to your advice

OK, this is a little more confusing now. If a memo has been placed by Laiki bank, this would suggest that his original loan is with another bank. because and loan he would have taken would automatically secured the property at the land registry. Maybe it is just a cross use of terms, but it is important to be precise as to what has actually taken place. Just for clarity, a memo is placed by another creditor when an unpaid sum of money is owed.

Going to the bank will achieve nothing, first off they would not talk to you, as you are not the land owner! Second, Laiki is in turmoil presently and most of the senior staff are no longer there so you will get no answers. In fact you will just get a 'I don't know' type of response.

You best option at this stage is to do a search to ascertain what's what, then go from there.

Sorry you are in this mess, but it needs time and patience to get a solution.

Good luck

[lilykmac]

Hello Pan
Thank you.
Can we do the N50 search in England.
How can Laiki Bank give us a loan 6 years ago to buy the apartment when there is already a loan out on the property?
The agent took us to the land registry I presume this was to change the names over.
What would happen if we stop paying our loan?

[Pantheman]

Hello Pan
Thank you.
Can we do the N50 search in England.
How can Laiki Bank give us a loan 6 years ago to buy the apartment when there is already a loan out on the property?
The agent took us to the land registry I presume this was to change the names over.
What would happen if we stop paying our loan?

I answer as asked.
No- you need to come to Cyprus, you will need original contract and passport. It'll cost you just under €10 to make application
The loan would have been on the land if the loan was taken out before you deposited your contract. This is something the N50 will tell you.
The agent took you, what you mean, you didn't use a lawyer? Who did your contract? As normally the lawyer will deposit the contract at the land registry. Unless there something 'fishy' going on. Who was your agent?
if you stop paying, the bank will default on you, repossess, sell at lowest cost and any outstanding they can and will chase you if you are in the EU. Cross border judgements apply. Once issued cannot be contested.
Best to keep paying whilst trying to sort it out.

[Nigel Howarth]

Hi lilykmac

Just to follow up on what Pan has said, you can read how to get the Land Registry to carry out a search and the relevant forms at http://www.news.cyprus-property-buyers. ... /id=004888

Your lawyer in Cyprus, assuming you have one, may be able to get a search carried out on your behalf.

If you stop making loan repayments, you could end up in deep doodoo!

Regards,

[lilykmac]

Hi Pan and Nigel
Thank you for your feedbacks.
Yes we did have a lawyer Pittadjis Law firm and we are using the same firm to deal with the sale.
Once we have done the N50 search and have all the details then what's the next step? because we are so anxious that the potential buyer will pull out if is not resolved soon.

What we can't understand is that the flat below us was sold in May 2012 therefore we did not envisage any problems in selling ours. What and could have things changed?