We had such a great response to our free legal advice offer from Northern Cyprus legal expert Naomi Mehmet,
that we could have filled a book on legal problems in North Cyprus.
Many thanks if you asked a question! Naomi has kindly given her time to answer some of the most asked questions.
Our apologies, if your question hasn’t been answered.
Scroll down to read the answers or click the link to go directly to the question below.

1 Martin : Registering your contract >
2 Mike : Land tax held by the developer >
3 Maggie : Charity status >
4 Trevor Barnard : Making a Will >
5 Susan Milsler : Permission to purchase >
6 Stewart : Transfering Property to a family member >

1
Martin : Registering your contract
Does registering your contract prevent the vendor then taking out a mortgage on your property?

” The official response which we received from the Land Registry is that it does not actually prevent the vendor from taking out a mortgage, but that any mortgage taken out subsequent to the registration of the Contract would either require the signature of the person named on the Contract to consent to the mortgage or the mortgage would be subject to the Contract i.e. the Contract would have priority over the mortgage. Therefore, it is unlikely, on that basis that any potential lender who carried out a Land Registry search and discovered the presence of a Contract of Sale would lend on that basis”.

2
Mike : Land tax held by the developer.
I am trying to find out the legal position as to whether it should be held in a seperate account from the company or can the developer use this tax money collected on behalf of government to finance further projects?

” I assume you are referring to the VAT which is, under new regulations, being collected by vendors on completion of the construction work and delivery of the property to purchasers. Previously, it was customary for VAT (KDV in Turkish) to be paid on transfer of title to the property into the name of the purchaser. However the Tax Office has recently issued a directive to all construction companies stating that VAT must be collected on completion of the construction and delivery of possession of the property to purchaser instead of transfer of title. This directive has been issued relying on a very old VAT law which has rarely been enforced by the Tax Office in the past.

In line with this directive, many vendors are therefore now invoicing their clients for VAT, which is currently 5% of the purchase price of the property, on completion of the construction. Many people have criticised this new directive by the Tax Office because they fear that if the VAT is paid by a purchaser to a construction company on completion, the construction company may not account to the Tax Office for it. On transfer of title, the Tax Office requires proof that the VAT has been paid before it will allow transfer of title to take place.

If the construction company has not paid this money to the Tax Office, the purchaser may not be able to take title without this being paid. Some pressure groups are lobbying the Government to try to change this practice so that VAT can be paid directly by the purchasers to the Tax Office on completion of the property instead of to the construction company to ensure that there is no risk of the construction company failing to account to the Tax Office for the VAT. However, this is not possible at present.

There is no legal requirement on the vendor to keep this money in a separate account. Therefore, to protect our clients, we are currently advising our clients only to pay VAT to the construction company in return for an official invoice (known as a ‘fatura’ in Turkish) from the construction company. This should bear the stamp of the Tax Office on it and should state the amount paid. Once a construction company has issued an official invoice, it must account for that money to the Tax Office.

The invoice should be retained by the purchaser or their lawyer to produce to the Tax Office on transfer of title. The Tax Office has confirmed that production of this invoice will be sufficient for transfer of title to prove that the VAT has been paid.”

3
Maggie : Charity status
We, a group of ex pats who presently raise funds for the SOS children. Is it possible for us to register on our own as a group of fundraisers? We are currently under the banner of SOS but would like to expand our fund raising efforts to include other charities. What we had in mind was to include a TRNC citizen if this is necessary.

” The law regarding the registration of associations for charitable purposes is the Associations Law. The relevant authority which governs the formation and registration of associations is the District Office (Kaymakamlik) of the area in which the association intends to carry out its activities. In Kyrenia, the District Office is located in a new building next to the state hospital.

If the association is to be formed by non-TRNC citizens or if any non-TRNC citizen is to be a member of the association, they must first obtain permission from the Council of Ministers by submitting an application. Similarly if the association exists abroad and wishes to register in the TRNC, it must submit an application to the Council of Ministers. This is can be a lengthy process, so most associations are usually formed with TRNC citizens as their members.

You must complete an application form which can be obtained from the District Office and must produce a Constitution or Articles which contains information such as the name, address and purpose of the association, the names and addresses of the members, how members are accepted and removed, how the association is to be run, how meetings are to be held and decisions made, the powers and authorities of the association and its members etc. Most lawyers will be able to draft a suitable constitution for an association.

The association must pay a fee to the Association Support Fund which is currently 1/10th of the minimum wage. The receipt for this must be produced to the District Office with 2 copies of the constitution and a list of all of the members with their signatures, names, addresses and professions.
Once the Association is formed, it can apply to the Council of Ministers to be given charity status and it will then benefit from tax exemptions on profits raised. Once the association is formed, it will be a legal person and can therefore buy and sell immovable property, carry out transactions in its name and can sue and be sued in its own capacity. “

4
Trevor Barnard : Making a Will
Can i make my will out in England as normal and include my property, etc in it without any complications arising?

” Under TRNC Law, for a will to be valid, the testator must be over 18 and of sound mind. The will has to be made in writing and signed at the end by the testator in the presence of two witnesses, who must be present at the same time, and these witnesses must attest the will. If the will consists of more than one sheet of paper, each sheet must be signed or initialled by the testator and the witnesses. These are the only requirements, however, as standard practice, as a firm, we always lodge a copy of the will with the Probate Registrar at the local District Court.

This involves taking the testator with the will to the Probate Registrar. The Probate Registrar checks the will to ensure the above formalities have been complied with and checks the identity of the testator. This reduces the risk of anyone contesting the will in the future on the ground that it was a forgery or that the relevant formalities had not been complied with.

If the will is signed outside of the country but states that it covers property in the TRNC, providing the above formalities have been complied with, it will be valid. However, in the event of death, proving the will can more difficult. Sometimes, as part of the probate procedure, the witnesses to the will are required to attend court or sign documents. This may be complicated if they live abroad. Further, the Probate Registrar at the District Court will not accept the registration of wills signed outside of the country. Therefore you cannot advantage of the benefit of lodging the will with the Probate Registrar as outlined above and the risk that the validity of the will could be contested by any person entitled under the estate is increased.

Alternatively, it is possible, if you leave a will in the UK covering your property in Northern Cyprus, in the event of your death, to complete the probate work in the UK and then, once the Grant of Probate has been issued in the UK, to apply to the courts here for the Grant of Probate to be re-sealed and re-validated for use in the TRNC so that the terms of the Grant of Probate and the will can be applied to the estate here. However, this can be a lengthy process and the UK Grant of Probate must be obtained and certified by the TRNC consulate in London together with various other original documents.

In my experience, the simplest way to ensure that your assets are protected and to avoid doubt about the validity of the will, is to prepare and sign your will with a lawyer in the TRNC and lodge it with the Probate Registrar at the District Court. This will should cover just your property in the TRNC and should be separate to any other wills you may have made in any other country covering your property in that country”.

5
Susan Milsler : Permission to purchase
What option is open to the many British buyers that find themselves in the position of being refused permission to purchase but have paid in full for their property. Tukish Tittle Pre 74 seems particularly problematic. What legal redress do these buyers have?

There is no official policy by the Government that non-TRNC citizens cannot receive permission to purchase for pre-1974 title. However, there has been widespread speculation in the press that this is the case. This speculation has been generated by lawyers who claim that the purchase permit applications for their clients who are buying pre-1974 title property are either being rejected or delayed. The problem is that when an application for permission is refused, lawyers do not receive written confirmation of the refusal and do not receive any reasons for the refusal.

It is very difficult, therefore, to establish exactly why a particular application has been refused. There have also been claims recently that some applications have been refused due to the proximity of the property to a military base. It is not always easy or possible to discover whether or not there is a military area in the vicinity of the property and lawyers cannot obtain a definitive answer to this question prior to submitting an application.

The official stance of the Government all purchasers should obtain permission to purchase from the Council of Ministers before purchasing the property and before any monies are paid by the purchaser. However, due to the length of time permissions are taking to be processed (currently around 2 – 2 ½ years on average), purchasers find that following this advice is not practical. Many purchasers find that it is virtually impossible to find a vendor who is willing to wait for a purchaser to obtain purchase permission before concluding the sale. Purchasers who proceed on this basis must therefore accept that there is a risk attached to purchasing without obtaining permission from the Council of Ministers first and there is a small possibility that the permission to purchase could be refused. Few vendors are willing to refund the money to the purchaser in the event that the permission to purchase is refused claiming that this is something which is out of their hands.

Many campaigners have criticised the current system and have tried to advocate the introduction of a new system where, during the initial stages of planning applications, sites are officially declared ‘suitable for non-citizens’ or ‘suitable only for TRNC citizens’ so that purchasers are aware before they buy. Alternatively, the procedure for granting permissions to purchase needs to be completely overhauled so that permissions can be granted within weeks rather than years to allow purchasers to obtain their permission to purchase before signing the Contract and making payment in line with the current Government advice.
For those who do find themselves in a situation where they have paid for their property in full, but have been refused permission to purchase, the following options are open to them:

You could try to appeal against the decision, firstly by writing a letter to the Ministry of the Interior, or if this fails, by considering legal action in the High Administrative Court for judicial review of this decision. Litigation of this kind can be lengthy and expensive, but it might be worth considering sending a letter initially.

If the rejection is due to a person reason relating to the application, could try applying again in a different name, for example, in the name of a friend or relative whom you know well and trust who could take title to the property on your behalf and hold it on trust for you. However, this will involve starting the process again from the beginning and therefore, it could take a further 2 – 2 ½ years before permission is granted. Legal fees would usually have to be paid again and there are risks associated with having the property in the name of another person, so careful advice would need to be sought.

You could put the property into the name of a Turkish Cypriot friend or relative whom you know well and trust and who can hold the property on trust for you. This would be a simple procedure as the Turkish Cypriot would not require permission to purchase. You may have to pay some additional legal fees to your lawyer for your lawyer to arrange for the transfer. There are risks associated with having the property in the name of another person, so careful advice would need to be sought.

Some law firms, such as ourselves, have a designated client trust company which has been incorporated specifically to hold property on trust for our clients in return for an initial subscription fee and an annual trustee fee.

You could sell the property by assigning your rights under the Contract of Sale. This will require the signature of the landowner.

A new piece of legislation has recently been passed by the Government which will allow non-citizens to own property on a long-term leasehold basis for 99 years. As the legislation is very new, it is not yet entirely clear what the procedure for this is, but it is an option which can be considered.

6
Stewart : Transfering Property to a family member
Is it possible to simply transfer a property to another person ie to a son / daughter / sister? What is the procedure? and what costs are invoved?

This depends on whether the transferor and the transferee are TRNC citizens or citizens of other countries and if they are citizens of other countries, whether they have the title deeds to the property or are still going through the process to obtain their permission to purchase.
If the transferor and transferee are TRNC citizens, the property can be transferred to certain first degree relatives, such as a child, grandchild or spouse, by way of gift. This is a simple process which is carried out by completing the relevant forms at the District Lands Office and arranging for both parties to sign. The costs involved are minimal – there is a small tax payable to the Land Registry of between 0.2% and 0.4% of the value of the property (depending on the relationship between the parties). For siblings, however, the full taxes which are usually payable on transfer of title are payable as siblings are not classed as a close enough relative to take advantage of the ‘gift’ system.

For citizens of other countries, where the title deed is in the name of the transferor and the transferee is also a non-TRNC citizen, the transferee must first apply for permission to purchase in the usual way and wait for this to be granted by the Council of Ministers. Once the permission has been granted, if the relationship is, as above, parent – child or grandparent – child or between spouses, the gift rate of tax will apply. Otherwise, the usual taxes payable on transfer of title will apply to the transferor and the transferee.

If the transferor has not yet obtained the title deeds and is still going through the purchase permit process, the application can be amended so that the permission will be granted n the name of the transferee instead. This is a relatively simple process carried out by writing to the Government enclosing the passport, completed purchase permit application form (which your lawyer will provide) and police disclosure certificate for the transferee. However, as with all purchase permit applications, it can be some time before the application is granted.

There is no charge levied by the Government for making this kind of change, but you may have to pay legal fees to your lawyer for submitting the amendment on your behalf.

Unfortunately Naomi cannot reply to comments, Lincguide wishes to thank her for giving her time up to answer these questions.
She can be contacted via email info@nmplegal.com,
Alternatively additional information is on their website www.nmplegal.com
If you have a question for Naomi click here >

To keep up to date with news and information from Lincguide join our mailing list to recive our monthly updates >