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Sassy
Posts: 1
Joined: 01 Apr 2012 22:01

Hello fellow "victims"

Post by Sassy » 02 Apr 2012 23:42

Hi

I am also an "owner" of a property in Cyprus, I got my keys when promised but I am also awaiting my elusive title deeds. I have a CHF mortgage with Laiki (the bank that increases margins on a regular 18 month cycle). Have read many of the posts and it really is unbelievable how many people are affected by this!
I purchased my property off plan in 2007 and was told 4 years for my deeds so only just getting to the stage that they are due.

Just curious if anyone has actually taken the steps to find out if there are developer mortgages or encumbrances on their property as I plan to do this when I go over this year.

I noticed a post regarding the fact that until title deeds are issued the developer is the guarantor of the loan, if we default then the bank pursues the Developer who subsequently pursues us, however if the developer has not transferred ownership of the asset paid for does that not mean we could counter sue for losses as a result of not receiving the asset that we paid for?

If the loan agreement specifically states that the developer would be liable then can the bank legally pursue us if they have knowingly lent money on the same asset to two different parties?



Nigel Howarth
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Re: Hello fellow "victims"

Post by Nigel Howarth » 04 Apr 2012 14:04

Hi Sassy and welcome to the forum,

I'm afraid that business practices in Cyprus are somewhat 'different' from those you would expect in a civilised country. At the height of the Island’s property boom in 2007 a pound Sterling was worth 2.49 Swiss Francs; today it is worth 1.44. Similarly in 2007 a Euro was worth 1.66 Swiss Francs, while today it is worth just 1.20.

Swiss Franc loans were much easier to sell and much more attractive to buyers at the time as the interest rate was much lower than loans available in Cyprus Pounds (which was replaced by the Euro in January 2008) or Sterling.

Many buyers were advised to take out Swiss Franc mortgages by the banks who were giving them out like there was no tomorrow. In their deals some of the banks included an initial period, typically three years, during which time those who had borrowed were not required to make any mortgage payments.

I know that many people have requested the Land Registry to carry out title searches on their behalf - many of them have found that the land on which their property is built has been mortgaged by their developer. If you want to get a search carried out, I have written a guide that you can find in the article New title search procedures in Cyprus.

The developers almost invariably act as the buyer's loan guarantor. But should you default on your mortgage repayments, the bank will pursue you.

Most contracts that I have seen contain a date when the Title Deeds will be available. These are hardly ever achieved in practice. Even though the developer may do all the work necessary, the process of issuing deeds gets held up in the bureaucratic nightmare of the Planning Authority and the Land Registry. (To give you an example - I had the Title Deed to my land for many years. When we built a house and had all the inspections carried out and submitted all the paperwork necessary to add the house to the deed - it took the Land Registry a year! (and that included me visiting the Land's Office every three months or so to try a push them along.

I doubt that you would be able to sue - if you did and you were successful, the court would award damages based on your financial loss.

If you bought after 7th December 2007, there may be some other options available to you.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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