Mortages

Before it's been built or during the initial stages of construction
Post Reply
TimW
Posts: 5
Joined: 08 Dec 2007 19:23

Mortages

Post by TimW » 08 Dec 2007 20:00

Hello,

I am in the process of buying an off-plan property and the lawyer acting on my behalf has advised me that:
  • "The bank which has a mortgage on the project will issue a declaration confirming that the separate Title Deed issued for the property will not be burdened with the existing mortgage which is currently filed on site."
Is this OK? I have read accounts of people having their homes sold to pay back the bank and I’m concerned this may happen to me.

Thanks
Last edited by TimW on 11 Feb 2008 10:26, edited 1 time in total.


Tim

Nigel Howarth
Site Admin
Posts: 2499
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Post by Nigel Howarth » 08 Dec 2007 20:29

Hi Tim and welcome to the forum.

It's a common practice for developers to mortgage the land on which they're building to 'kick start' the development.

You need to proceed with caution.

As the bank will not issue a declaration until separate Title Deeds are issued, you are at risk if the developer goes bankrupt or if the bank calls in the loan in the meantime. Bear in mind that it can take many years to get your Title Deeds in Cyprus; I know of people who have been waiting more than 20!

There is also another problem inasmuch as you cannot force the developer to repay the mortgage. So you could end up in the situation of never being able to get Title to the property.

You need to instruct your lawyer to approach the developer and ask him to obtain a “release” from the financial institution that loaned the money stating that the part of the property you’re thinking of buying is free of a mortgage. In addition, you must ensure that the “release” is given when you sign of the Contract of Sale, or you may find it’s not issued.

If your lawyer is unable to obtain a “release”, do not proceed with the purchase. If you buy a mortgaged property, you risk losing everything!

(There's a chap living a few miles from me who bought a mortgaged property and is currently facing the threat of losing it and his money).

Regards


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

TimW
Posts: 5
Joined: 08 Dec 2007 19:23

Re: Mortages

Post by TimW » 03 Jan 2008 18:54

I asked my lawyer to check things out and the whole of the building site is mortgaged to the Alpha bank. He spoke with the builder about getting a mortage release but the builder refused!

I've now pulled out and I'm looking for something else that does'nt have a mortgage. If you hear of anything, please let me know.

Thanks for your help.

Happy new year.


Tim

Nigel Howarth
Site Admin
Posts: 2499
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: Mortages

Post by Nigel Howarth » 03 Jan 2008 19:23

You're welcome Tim.

Have you considered looking for a resale property? There's a lot around at the moment and you'll have a much better chance of finding something that's not mortgaged - and if you're lucky, you might even be able to get the Title Deed immediately.

Happy New Year


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

Post Reply