Because from the communications that we receive there appears to be a confusion on the Building Amnesty/Title deed issue, we hereby re-write a similar article in as a simple form as we can, in order to address the issue.

The new legislation proposes the issue, from now on, three types of titles:

1. The Final title - The title that we all know today. A title deed with no observations on any illegalities on it.

2. The Incomplete title – The title which will be issued with recorded illegalities on it, e.g. “a covered verandah has been closed without a permit”, or “building with excess height of 1 meter” etc. These titles refer to illegalities done by the builder/developer/buyer and which can be covered mainly by the proposed Building Amnesty. It does not refer to serious illegalities such as change of use, increase in floor heights, intrusion to a neighboring property etc.

3. The Restricted title - i.e. a title which has illegalities which cannot be covered by the building amnesty. Serious illegalities such as change of use, increase in floor numbers, no provision for parking etc. These titles will be issued and transferred to their original purchasers. However from there on, these titles cannot be transferred to third parties, place under mortgage etc in favor of anyone. So it is a title which will be issued but it will have no real/sales value to the market.

The building amnesty will take care of most illegalities which are not serious and which do not affect the convenience of neighbours. A list of possible illegalities will be prepared by the Planning Office and it will be costed in term of penalty/ tariffs by the Lands Office. So for those who have no titles, or even those who have titles, but they have carried out illegalities subsequently to the deed issue, the supervising architect of the building will write down the illegalities, issue a cheque based on the tariffs and submit the documents/money to a committee who will examine the case. Its positive decision will be similar to the issue of a certificate of final approval and this will clear the way forward to the Lands Office for the title issue

All those who have incomplete/restricted title, if they do not manage to have them corrected under the amnesty or otherwise, they will leave themselves open for legal action by the local authority (if they decide to take such a course of action).

The above proposals are now in the form of a “white paper”, which is under discussion and constant modification. It is expected that the proposals will be deposited at the House of Representatives and hopefully it will be approved within the next 3-4 months. From there on, we expect that the red tape with the committees etc will take around 1-2 years to check most cases and another 1-2 years for the deed issue. All in all for these titles we will need anything around 2-4 years. The Lands Office has the capacity to issue around 15.000 titles per year. So with the pending 120.000 cases, plus others, you do appreciate the scale of the problem and the time needed until the end is reached.

The easiest way to explain the tariffs is the case is the building density increase since most people build a bit more than what their permits say, e.g. covering of a pergola, closing of a verandah, converting an underground storage into a living space, increasing the extent of the garage etc etc. As an example, in residential areas the tariff may be around €500/sq.m. of the illegal extra, in case of offices €700/sq.m. and for touristic zones around €1.000/sq.m. These figures are our own estimate and as we have stressed to the Ministry of the Interior, the penalties/tariffs must be low enough in order to be attractive and to encourage people to submit their applications. Strict examination of the illegalities and high penalties might disappoint and put off applicants, returning back to square one. A similar situation existed a few years ago with the tax amnesty having a 5% charge. As a result of this low taxation, approximately €3.5 bil. was declared much to the then Government’s delight of €170 mil. income.

The matter is urgent since the Government expects to receive around €300 mil. We are not alone in this and Greece, as well as Italy, have introduced a similar amnesty, which as an income to the Governments runs into billions (Spain is now next in line to introduce the amnesty).

So do not rush to submit your application on the building amnesty now, since there is no law as yet. Wait for it and we expect that the date of hope is not far away.

www.aloizou.com.cy

www.aloizou.ro

www.aloizou.ru

ala-HQ@aloizou.com.cy