The Minister of the Interior Mr Neoklis Sylikiotis has declared that the Ministry’s proposal on solving the title deeds issue problem will be announced within the 1-2 months in full details. Of what we were given to understand, the scope of the measures/new legislation, will aim to target the issue of the 100.000 or so, non issued titles, which is either the fault of the developers, the buyers, Lands Office (delays) and financiers. In a nutshell, the measures, most of which are our own proposals submitted over the last 4 years are as follows:

Building Amnesty - A liberal building amnesty which will cover part of the illegalities (carried out either by the developers or buyers) which relate to buildings built not in accord with the building permits. Our proposal on this is to allow the supervising architects to submit to the local authorities the issue of a cover building permit and at the same time the issue of the certificate of final approval. This to hold good for all buildings with a building permit issued up to 31.12.2007. We prepared and submitted a simple procedure, where the supervising architect will write down the illegalities and the developer/owner pays the authorities the penalty. This penalty could be (as an indication):

• In case of residential excess density a penalty of €680/sq.m., in case of touristic projects €1.000/sq.m., in case of commercial/offices €850 sq.mts. etc

• Change of use will not be allowed by the amnesty, neither the intrusion of buildings in neighboring land.

• In case of increase floor height, up to 2, the previous penalties will apply but x 2 and this to cover the added density and the height.

Similar measures have been introduced in Greece and Italy, whereas Spain is considering a law on similar lines.

• Division Permits – To be issued at the same time as the cover building permit by the supervising architect, so that this procedure does not come later, causing added delays.

• Comprehensive development projects (block of apartments, housing complexes etc) all units to be issued with title deeds. Those units which have illegalities will be issued with a “temporary” title, transfer to be effected, but after this no sale, mortgage, etc may be allowed for those with temporary titles unless covered by the building amnesty. So those units who are OK with the permit will have a free title and those not with a temporary title (which could be corrected under the building amnesty).

• At the time of sale and if the property/land is mortgaged, the buyer must be covered by a mortgage release from the mortgagor (new sales), with the seller’s responsibility to provide. Older sales discussions with the Banks in progress.

• The problem which relates to the delays by the Lands Office (eminating from the lack of Land Surveyors) the work to be privatized. Because the added cost will be considerable, the Government to pay for the extra fees of the private individuals, since in return upon issue of titles, the Government will get millions in transfer fees (not adopted as yet).

• A super coordinator is to be appointed (we say he must come from the private enterprise) to supervise and implement the above measures speedily and to fall under the guidance of the Minister of Interior (name pending).

• To disconnect the issue of the certificate of final approval for the occupation of a building. A measure not in use (but in force) but because of the prevailing circumstances, it is unfair to all, buyers/developers and others (not adopted as yet).

• The preparation of a “white paper” which will be published over the next 1-2 months and to be communicated to all related parties such as associations, Banks, developers etc for exchange of views.

• The value of the 1.1.80 of a property with respect to the annual property tax to be set by approved valuers and at the time of the sales contract to be so stated. The value to be reviewed when the Lands Office issues the title and adjustments made. The liability of the buyer to pay, will arise upon production of receipts from the tax office that payment was effected by the registered owner (pending).

The problem of the title issue/transfer has many causes, the main one being the property boom that Cyprus has experienced over the years 2002-2008. At the year 2001 there were 8.000 p.a. building permit applications, whereas, after that, it reached 14.000 p.a. and the more recent projects are of a much larger scale, amounting to the equivalent of approximately 20.000 (old) building permit applications. To this, the indifference of developers, the new class of developers which rushed into the market to make a “quick cent” but without the necessary financial strength and knowhow, the shortage of staff and fixed attitudes by the civil service, as well as the inefficiency of many local authorities to meet this added demand are to blamed, as well the greed by the financial institutions to lend just about anybody. The Minister’s concern is that the measures will be in place on his part, but they need new legislation, which must obtain the approval of the House. His concern is that politics etc might delay the approval of the legislation and he has appealed to all MPS not to let this issue come into the political arena.

In the meantime the pressure on the Government/Ministry is mounting and this is the industry’s main hope for a speedy progress. Lets keep our fingers crossed and hope to see action within the next couple of months … or else!!

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