Developer mortgages

Where do I go to find out about...
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kirby
Posts: 42
Joined: 21 Sep 2009 18:45

Developer mortgages

Post by kirby » 04 Jul 2011 17:20

How do I find out if there is a developer mortgage on my property? I bought the property using the recommended 'independent' solicitor and having thrown lots of money at this purchase with various disputes am loathe to spend out any more money on finding out.

Should my 'independent' solicitor be able to tell me or can I find out myself?

Thanks



kirby
Posts: 42
Joined: 21 Sep 2009 18:45

Re: Developer mortgages

Post by kirby » 04 Jul 2011 17:28

PS I should add that I am in the UK and have no intention of visiting Cyprus. Can this be done online?



Nigel Howarth
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Re: Developer mortgages

Post by Nigel Howarth » 04 Jul 2011 23:15

Hi Kirby,

You'll either have to come to Cyprus yourself or instruct a lawyer here to get the Land Registry to carry out a search. You'll find information on how to obtain a search at http://www.news.cyprus-property-buyers. ... /id=004888 together with links to the N.50 form that you need to complete.

Because Land Registry records are considered to be 'confidential' only an interested person or his/her agent or attorney may file an application to be issued a "search certificate"

"Interested persons" means the owner of the property, his heirs, devisees and legatees, the owner of any trees, buildings or other objects on the land which belongs to another and vice versa, the person entitled to any right or interest in the immovable property, who satisfies the Director that he is a prospective purchaser or mortgagor, the plaintiff in any action against the owner of such property, the professional valuer who may require certain information for purposes of the valuing certain immovable property in a case relating to compulsory acquisition and includes any person not thus specified to whom the Director may specifically order that any information be furnished".

Can it be done online? I'm afraid that you are confusing ambition with ability.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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kirby
Posts: 42
Joined: 21 Sep 2009 18:45

Re: Developer mortgages

Post by kirby » 05 Jul 2011 16:32

Many thanks Nigel for your help. I did think that asking for an online application may be a bit in the realms of wonderland!

I'll get the lawyer who did our Wills to have a look in to it. Fingers crossed it's not bad news!

Many thanks



kirby
Posts: 42
Joined: 21 Sep 2009 18:45

Re: Developer mortgages

Post by kirby » 19 Jul 2011 18:46

Hello again!

Well, I had an encumberance search carried out and the developer did have a mortgage on the land before I signed my Contract. I realise that it could have (hopefully) been cleared by now as the developer has been selling the properties. I appreciate I am unable to find this out at this stage.

The good news (I suppose) is that it does not look like he has remortgaged the land again after I signed the Contract.

I have some questions, so if anyone can help, that would be great thank you! (I have a read up, but am a tad confused)

I assume how it is meant to work is that the developer repays his outstanding mortgage balance after he has made his sales, and then releases the Title Deeds (once he gets them) to us?

Would we get Title Deeds if he still owed monies on the property?

If yes, could we sell that property or would the Bank expect some of the monies?

If there is an outstanding mortgage on the land from before we signed the contracts and the developer does a runner or goes bust, what happens please?

Lots of questions, sorry!



Pantheman
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Re: Developer mortgages

Post by Pantheman » 20 Jul 2011 17:25

kirby wrote:Hello again!

Well, I had an encumberance search carried out and the developer did have a mortgage on the land before I signed my Contract. I realise that it could have (hopefully) been cleared by now as the developer has been selling the properties. I appreciate I am unable to find this out at this stage.

The good news (I suppose) is that it does not look like he has remortgaged the land again after I signed the Contract.

I have some questions, so if anyone can help, that would be great thank you! (I have a read up, but am a tad confused)

I assume how it is meant to work is that the developer repays his outstanding mortgage balance after he has made his sales, and then releases the Title Deeds (once he gets them) to us?

Would we get Title Deeds if he still owed monies on the property?

If yes, could we sell that property or would the Bank expect some of the monies?

If there is an outstanding mortgage on the land from before we signed the contracts and the developer does a runner or goes bust, what happens please?

Lots of questions, sorry!
The developer cannot issue deeds with an outstanding encumbrance. He will need to clear his mortgage first.
It is not just a case of paying the mortgage to get deeds, he has to do a number of things to acheive this.

1. He needs a final certificate
2. A permit to subdivide the plot
3. apply to the land registry to get the subdivision done.

When all this has been done, he will transfer the deeds into your names and you will have to pay the transfer fees, which will be based upon the purchase price.

As there was a mortgage on the land initially, then the banks have priority over your property, in short they could take the properties if the developer defaulted.
If that scenario were to happen, it would mean that someone, you and others, would have to repay this mortgage to be able to get your deeds.

Is your developer a larger company? What are the chances of him defaulting or going under do you think?

Why not ask him directly if he has any outstanding mortgage, he might just tell you.

In the event that you wish to sell before titles issued, you will probably need a bank waiver from his bankers to do so. Thats assuming he is willing to play ball.

Good luck.


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kirby
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Re: Developer mortgages

Post by kirby » 20 Jul 2011 17:49

Thanks Pantheman, really appreciate your answer.

The developer is a largish company, but all the horror stories you hear on forums etc does make me worry.

I just dug out my contract between me and the developer and there is a clause that says:

"The Purchasers bear no responsibility and they are not in any way liable in respect of any obligations, outstanding charges, dues, land and property dues, fees and taxes regarding the said Property, created before the signing of the present agreement or for any Capital Gains Tax created before the signing of the present agreement."

Does this give me any protection please?

I am in negative equity with my property so, though I'd love to sell the place, I cannot at the moment.

Thanks again



Pantheman
Posts: 594
Joined: 26 Jan 2008 14:44
Location: Famagusta District
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Re: Developer mortgages

Post by Pantheman » 20 Jul 2011 21:20

kirby wrote:Thanks Pantheman, really appreciate your answer.

The developer is a largish company, but all the horror stories you hear on forums etc does make me worry.

I just dug out my contract between me and the developer and there is a clause that says:

"The Purchasers bear no responsibility and they are not in any way liable in respect of any obligations, outstanding charges, dues, land and property dues, fees and taxes regarding the said Property, created before the signing of the present agreement or for any Capital Gains Tax created before the signing of the present agreement."

Does this give me any protection please?

I am in negative equity with my property so, though I'd love to sell the place, I cannot at the moment.

Thanks again
Not sure where this is coming from, but is no protection. If the inland revenue and the tax office want their money, they will get it. The clause is presumably just between you and the devloper for any oustanding payments he may have had on the land. If he has secured a loan to the bank, the bank has first charge since it was in place before yours.

Sorry to be the bearer of bad news, but you are not really any better off.

If you are saying the property is worth less than what you owe the bank, sure you cannot sell unless you add the difference.
If you can get the price to cover your bank loan then you have just lost your initial deposit.
What %age did you put down when you bought?
Is the property worth less than you owe the bank?


Good luck


For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Real Estate Company Co. Reg. No. 795, Lic. No. 250/E
Member of ETEK Registration No. A201999
https://fsbproperties.com

kirby
Posts: 42
Joined: 21 Sep 2009 18:45

Re: Developer mortgages

Post by kirby » 21 Jul 2011 10:38

Thanks for your help Pantheman - I guess I'll just have to think positive and hope that the developer mortgage is cleared so that I can get my Title Deeds.

As to the negative equity - I don't like to disclose figures as it is actually quite embarassing (though it is nobody's fault, no one predicted the economic downturn or how Cyprus joing the EU would affect the mortgage amount etc), but believe me, it is bad! :)

Thanks again for your help.



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