Cyprus Property Forum for Buyers, Sellers & Investors

Hi Nigel,

i have just received correspondence from the land registry that the developer has taken out three mortgages against my property. One of the loans was issued from my own bank whom I have the property mortgaged with. How can this be? Obviously I have to have this looked into by my own lawyer but can you tell me if this is common practive in Cyprus. how can this happen when my contract of sale was registered with the land registry? Can you advise what I can do about this and how this might affect me? What happens if the developer goes bust?

Your advice is appreciated,

rollwithit

Hi rollwithit

Unfortunately, these unethical lending practices by the Cyprus banks are very common!!!

You do not have to worry about those loans that were taken out after your contract was deposited.

However, if any of the loans existed before your contract was deposited, then if the developer goes bust the bank has the right to re-claim your property and auction it to recover the debt.

There are several articles in my magazine about this - take a look at http://www.news.cyprus-property-buyers. ... /id=002849

There are many hundreds of people in the same situation as yourself.

Regards,

Thank you Nigel,

although you say it is nothing to worry about its quite disconcerning knowing that there are mortgages on your property which you
knew nothing about. Whats most worrying is that my own bank has authorized a loan to the developer on the same property they gave me a mortgage for. is it worth making a complaint to the financial ombudsman? This is quite appalling!
To answer your query, the Land and Surveys department have confirmed that the loans were indeed taken out after I registered my property.
However I intend researching EU regulations on this matter. i dont blame the Developer, however the bank should have acted in a more professional manner. I commend CPAG for standing up to this situation and seemingly corrupt system.

Anyones similar experience or advice on how to tackle this would be appreciated. And thank you again Nigel for you help.

rollwithit

Hi rollwithit

If your property is part of a development and the mortgage was taken out after your contract of sale was deposited at the Land Registry, the mortgage should not affect you.

When the development is split into individual plots and Title Deeds are issued, your property will be in the clear.

The major worry is those who have been duped into buying that the developer had already mortgaged when they purchased it - developers do not tell them, lawyers do not tell them, and banks do not tell them. Unfortunately, people in this situation face the very real threat of losing their homes if the developer goes bankrupt or the bank forecloses on his loan for any reason - they can gain possession of the property and auction it to recover the debt.

(There is a chap living a few miles from me who is in this situation and is presently fighting it through the courts).

Regards,

Nigel Howarth wrote:Hi rollwithit
Unfortunately, people in this situation face the very real threat of losing their homes if the developer goes bankrupt or the bank forecloses on his loan for any reason - they can gain possession of the property and auction it to recover the debt.

That's really a terrible result after all. You must start talking to your lawyer so that he can make a plan to solve this issue. It should not be done because on the first place the developer should give you notice about this.