Mortgaged land

[crystal]

Hi Nigel,
Ours is a plot of 6, 4 occupied 2 shells, after 2 years we are finally getting out own mains electric the poles have just gone up.
Our developer has loans on the land with Alpha bank, ND50 shows a loan of 50.000 euro pre contract, he told us there are no loans, but we can see from the ND50 he had taken 50.000 out and more after our contract was signed.
I read somewhere that any money paid into the company account should be serviced against the loans the comapny has taken out, I know all our payments were made directly to the company account at the Alpha bank head branch in Larnaca. Would Alpha bank have taken the money from our staged payments to the company account to clear the original 50,000 euro.

I know the ND50 does not show if these loans have been paid off, but for piece of mind given the latest with Alpha bank , how can we find out if he has paid the 50,000 euro off, I don't want to rock the boat as you know what its like, and to give him his due he has dropped the prices of the last 2 houses, and is still trying to find buyers.

I know its not been easy for him, and he has been trying hard to sell the last 2 to finish the site and put the road in, when he sold the latest one he paid for the electrics to be connected right away, ( probably because he is sick of paying for the temporary electric )

Would you advise us to seek advice of a lawyer at this stage or try and speak to him personally about getting a waiver.

[Nigel Howarth]

Hi crystal

Firstly, you do not have to concern yourself with charges against th eland that were put there after your contrcat of sale was deposited at the Land Registry. These will not affect you.

The €50,000 pre-contract is the charge initially agreed with the bank. This amount may have increased or decreased depending on whether the developer has been paying the bank - like the UK, the Land Registry does not know the current amount.

It is unlikely that the Alpha Bank has diverted any of the money you have paid to clear the developers charge and it is also unlikely that they will tell you how much of the €50,000 is currently outstanding. But there's nothing to stop you asking and also asking for a clearance certificate (from the bank).

The developer told you that he had no loans on the land. I'm afraid that some property developers will tell you anything to achieve a sale.

I suggest that you look through your contract to see if it says anything about the property being free of any loans, mortgages, etc. If it does, then the developer may be in breach of contract and also guilty of misrepresentation. In this case you may have a case against him that your lawyer could pursue.

Regards,

[crystal]

Hi Nigel,
Thanks for the reply, our contract has a clause in it, stating the property has to be delivered fully serviced ie, water and mains electricity, and free from any encumbrances.

As there is no mains electricity yet it is not fully serviced, but when the electricity gets connected soon we hope, do you think I should ask him for a bank clearance certificate to confirm it has been delivered as per the contract of sale.

I was thinking another way round asking the question , would be to say I am selling up and need proof that there are no mortgages on the land.

I really don't want to go down the lawyer route yet as we live in the same village, he is not a farmer he has an insurance business in Larnaca and his wife works for the bank that he has his business with.

[Nigel Howarth]

Hi crystal

Don't waste your time trying to deal with this developer.

If your contract states that the property has to be "delivered fully serviced ie, water and mains electricity, and free from any encumbrances", then he is clearly in breach of contract!

I suggest that you get another lawyer to pursue him. The British High Commission publishes a list of English-speaking lawyers that you can find at http://ukincyprus.fco.gov.uk/en/help-fo ... ed-lawyer/

Developers like this have been preying on people for many years - it's time to fight back.

Regards,