Searches

[Claus]

Our lawyer has completed searches on a property we want to buy and says that is it ok; all mortgages have been repaid. When we asked to see documentation, she said that no documentation will be given. When we asked her how she can know if there is no documentation, she says her firm has made investigation and confirmed that there is no loan.

Why would she not want to show us the documentation? Is this normal procedure? We would like to see this document with our own eyes and keep a copy with us, in case of future problems. We do not feel comfortable investing such a big amount based only on the word of our lawyer.

[Nigel Howarth]

Hi Claus,

When the Land Registry completes a search they provide the enquirer (in this case your lawyer) with a stamped and signed document listing such things as the registered owner, mortgages that have been taken out together with the original loan amount and the lender.

Did your lawyer give any reason why she refuses to give you the documentation or a copy?

Do you know whether your lawyer has professional indemnity insurance and if she is prepared to write to you confirming that there are no mortgages?

It is most definitely not the 'normal' procedure - I smell a rat.

I suggest you get yourself another lawyer - you'll find those on the list provided by the British High Commission at http://www.news.cyprus-property-buyers. ... /id=002254 (Louise is on that list).

Regards,

[Claus]

We have seen the search from the land registry. This shows the mortgage registered to the property. Our lawyer explained to us that this mortgage will continue to be registered at the land registry until the time that title deeds are issued.

What our lawyer will not show us is the documentation from the bank that the mortgage has been repaid. She says that documentation would belong to the account holder and would not be for general circulation - and therefore we cannot see it.

[Nigel Howarth]

As the Land Registry search shows that the property is mortgaged, I advise you to proceed with extreme caution!

You should instruct your lawyer to ask the developer for a 'mortgage release' certificate from the bank that loaned him the money indicating that the property is free of all mortgages. If your lawyer is unable to persuade the developer to get this release certificate, find yourself another property.

There are a number of issues:

1. If you buy a mortgaged property there is no guarantee that the developer will repay the mortgage:

• a) If the developer goes bust and the bank comes after its money, you could lose your home - even though you may have paid for it in full.
  
  b) There is no way of 'forcing' the developer to pay off the loan. Even if you took him to court and won the case, enforcing the court's judgement could prove impossible. (Such an action would also involve you in considerable expense - and it could take many years.

2. The details of the mortgage shown on the Land Registry search shows the amount at the time was taken out. You have no way of knowing the outstanding amount - unless the bank will give you the details. It could be that the developer has not paid as he should have done and interest has been added to the loan. It could also be that the developer has rescheduled or extended the original loan.

3. The Title Deed for the property will not be issued until the mortgage has been repaid and the bank has lifted the mortgage registration at the Land Registry.

As you may know the Title Deed seminar organised by the Cyprus Property Action Group in Paphos had some 200 people who had been duped into buying mortgaged property.

Don't fall into the same trap yourself.

If your lawyer cannot get a mortgage release certificate from the developer, I advise you not to buy the property.

Regards,

[Pantheman]

I am with Nigel on this one.

I always get suspicious when lawyers don't want to show you something.

Just taking someones say so is not enough. If the give it to you in writing together with their indemnity insurance details then I wouls think about it, otherwise you would only have yourself to blame if things when pear shaped.

Although, it it is common to leave property as security even after the debt has been paid, this is so that you can reborrow without having to pay the land registry fees all over again.

Good luck