Following the recent publicity surrounding the Oram’s case, legal expert Naomi Mehmet has focused on property related problems this month.
Scroll down to read the answers or click the link to go directly to the question below.

1 Power of Attorney >
2 Property Tax >
3 Purchase Problems >
4 Protecting my property >
5 Leasehold without PTP >
6 Mortgaged land >

1
Power of Attorney
Who needs Power of Attorney to sell their property when a shared title is held on the land?
At present I am being told that a TC needs a POA but an expat doesn’t. They just need to put an a notice in the paper.

” Under the Laws of Cyprus Chapter 224 Immovable Property Law section 25 where land is owned by several people in undivided shares, when one of the owners transfers their share to a third party who is not one of the other owners on the site, the other owners on the site have a right of first refusal to purchase the property for the price at which it is being sold the third party. The Land Registry will not register the property into the name of the third party unless it is satisfied that the other owners do not wish to exercise this right of first refusal. To satisfy the Land Registry of this, you must either arrange for all of the other owners to sign a declaration at the Land Registry stating that they do not wish to use this right or arrange for all of the other owners to give you a power of attorney for you to sign this declaration on their behalf or advertise the proposed transfer in the newspaper and allow a period of 30 days for the other owners to exercise this right. These are alternative solutions. Carrying out any one of these is sufficient to satisfy the Land Registry that the other owners do not wish to exercise their right of first refusal. The latter solution (advertising in the newspaper) is most commonly adopted when transferring a property on a site with shared title deeds in this way as it is often simpler to do this that to try to get the other owners to sign declarations or give powers of attorney. If any of the other owners do wish to use their right of first refusal, they must apply to the Land Registry within 30 days of the advertisement and deposit the price and the registration fee with the Land Registry.
These rules apply equally to Turkish Cypriots and non-Turkish Cypriots.”.

2
Property tax.
I own an apartment on a site where there are 166 apartments . The deeds are imminent however I have been told that unless all 166 apartments have paid their property tax then my deeds cannot be issued . Is this correct?

” The Land Registry will not allow a transfer of title to take place unless it is satisfied the annual property tax (emlak vergisi in Turkish) for the property has been paid.
The question of whether only the property tax for the particular property being transferred or for the whole site on which the property is situated have to be paid really depends on the arrangements which have been made in respect of the property tax with the local municipality (belediye in Turkish).
If the property has been built on a site which is made up of one piece of land and separate title deeds have not been issued for the separate individual properties, the land will remain, according to the Municipality Records, as it was at before the construction commenced i.e. as a piece of land registered in the name of the vendor, unless and until the Municipality records are amended:
There are two ways of amending the property tax records at the Municipality
They are automatically amended when title deeds are transferred from one person to another person as the Land Registry notifies the Municipality of the      change of ownership
The vendor can, once the site is complete and the apartments are delivered, notify the Municipality of the names of all of the owners of the individual properties so that individual property tax bills will be issued for individual properties on the site (this is often done at the same time as the application for water meters to be fitted to each property is done at the local Municipality)
If the vendor of this complex has not notified the Municipality of the names of the individual owners of the property and the Municipality’s records have not been changed, the Municipality will issue one bill to the vendor for the property tax for the land which makes up the site. If, however, the vendor delivered possession of the properties to the purchasers some time ago, he will argue that he is not liable to pay these as, usually, contractually, the responsibility for paying the property tax passes to the purchaser once possession  has been delivered to the purchaser. The vendor may therefore decide to divide the bill by the number of properties on the site and then contact all of the owners and ask them to pay their respective share. Once all of the money has been collected, the vendor will then pay the property tax for the whole site and obtain a receipt. This can obviously delay transfer of title as collecting the property tax from each individual owner can be time consuming.
I understand from speaking to various parties concerned, that at the moment, some of the Municipalities are not accepting applications by vendors to register individual properties for property tax on sites like this. The reason for this is not entirely clear but there is speculation that this is a temporary step which has been taken as from the beginning of this year, some Municipalities have been merged and some villages have been registered under Municipalities for the first time. Therefore, until the systems are properly in place, some Municipalities have restricted some activities in relation to the property tax. It may be, therefore, that your vendor has tried to register the properties separately for property tax, but has been unable to do so at this present time.”

3
Purchase problems
I have paid the deposit on a resale apartment, the deeds have been registered to the seller who is in England. The estate agent wants me to sign the contract but cannot tell me what arrangements have been made to transfer the deeds registration to my name or to transfer the deeds to me when I receive my PTP! The contract has been drawn up by the estate agents solicitor, the seller does not seem to be directly involved though his name is on to sign the contract even though he is in England. I am concerned because when I receive my PTP the seller may not be available or willing to transfer the deeds. Not sure either how I can register deeds to my name as the seller has them registered in his and he is in England.  Should I proceed with this purchase?

” As mentioned on last month’s question and answer session, in respect of permission to purchase, the official advice of the TRNC Government is that 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 or there may be complications involved in contacting the vendor to carry out the transfer of title etc.
In this situation, if you proceed on this basis, you should ask your advocate what arrangements have been made to ensure that the risk of experiencing problems with the transfer of title when your permission to purchase is granted are minimised:
Firstly, under the Estate Agents Law, all Contracts of Sale must be registered at the Land Registry within 21 days of being signed. On registration of the Contract, the Land Registry checks that the person named on the Contract is the registered owner and that there are no encumbrances on the property. Registration prevents the transfer of the property to a third party without your knowledge and consent and may give you some protection against the registration of subsequent encumbrances.  You should ensure that your advocate will be carrying out the registration for you and that monies will be released once the registration has been done.
Secondly, you should ensure that, preferably your lawyer, or at least the vendor’s lawyer, has a power of attorney which authorises them to carry out the transfer of title on behalf of the vendor so that if the vendor is out of the country, the property can be transferred without requiring him to travel to the TRNC.
Thirdly, depending on whether the vendor’s tax status, you might want to raise the issue of tax with your advocate. If it possible that the vendor may be liable to pay tax on the transfer of title, you might consider asking your advocate to negotiate for this tax money to be retained out of the sale price and held so that it can be used to pay the vendor’s taxes in the event that the vendor is out of the country and fails to pay his taxes.
You should in any case, obtain confirmation from the advocate that he or she is acting on your behalf in the transaction and obtain a letter confirming what is being carried out by your advocate on your behalf. As well as all of the above, if the property is a recently completed construction, ask your advocate whether he or she has a copy of the building permit and final approval for the construction and ask whether the construction is registered on the title deeds.”

4
Protecting my property
My apartment ( purchased on exchanged land )is now complete but I have not yet received the title deeds. In view of the recent Orams ruling, how is it now best to proceed / protect my property?

“On 28th April 2009, the European Court of Justice issued its preliminary ruling to the questions referred to it by the UK Court of Appeal in relation to the case of Apostolides v Orams. A preliminary ruling is a ruling of the ECJ on certain legal questions referred to it by the court of an EU member state, but is not a final determination of the actual case between the parties. The case will now be referred back to the Court of Appeal in the UK for a decision.

Although the ruling of the ECJ on the interpretation and application of the EU law in question in the case is binding on the Court of Appeal, the Court of Appeal does still have some grounds, such as public policy, on which it can decide not to enforce the judgment issued against Mr and Mrs Orams in the Court in the South of Cyprus. Therefore until a decision is reached by the Court of Appeal, there cannot be a definitive answer on what the implications will be.

According to information received from members of the legal team representing Mr. and Mrs. Orams it is expected that a judgment will be given by the Court of Appeal in around September this year. Whatever the outcome of this decision it is possible that there may be a further appeal by the ‘losing’ side to the House of Lords, if leave for appeal is granted. Further, from information given by members of the legal team representing Mr. and Mrs. Orams, I understand that Mr. and Mrs. Orams have filed a case at the European Court of Human Rights alleging that their right to a fair trial under Article 6 of the European Convention on Human Rights was breached during the court process in the South. What is clear therefore, is that there is still a long way to go in reaching a final determination of this case.

Many people have speculated that registering their property in Northern Cyprus in a different name or in a ‘holding company’ separate to their assets in the UK or in other EU member states may offer protection in the event that a similar case is filed against them. However, in my opinion, this is a simplistic view of the situation. I do not think that the matter relates just to whose name is on the title deeds. Actual occupation of the property and beneficial ownership of the property could also be factors relevant in such a case and therefore I do not think this proposed ‘solution’ will give 100% protection. For now, we must all wait for the decision of the Court of Appeal.

I have written an academic analysis of the case with my own personal views on some of the legal issues which can be found on the firm’s website in the Information and Links section.”

5
Leasehold without PTP
What is the maximum term applicable for a long term leasehold property that doesn’t require Permission to Purchase approval under current laws, and are there any changes to this in the pipeline you are aware of?

“In November 2008, Law 52-2008 Immovable Property Acquisition and Long Term Lease (Aliens) Law came into force by being published in the Official Gazette.
This law amends previous laws regulating the purchase of property by non-TRNC citizens. It introduces a new system under which non-TRNC citizens can purchase property by way of long term lease instead of in the traditional way by acquiring the freehold. The new law defines ‘long term lease’ as a lease for a period of a minimum of 10 years and a maximum of 99 years. The law states that the Lease Agreement should be registered at the Land Registry within 30 days of being signed. The Lease Agreement must be prepared by an advocate registered to practice in the TRNC and must be signed by the parties in the presence of two witnesses who must also sign the Lease Agreement. The advocate who prepared the Lease Agreement must also sign it.

The name of the Lessee and the lease period will be recorded on the title deed to the property and the Lessee will be given a Lease Document by the Land Registry affirming his/her rights in the property. The Lease can be sold, assigned, mortgaged and passed on by will or intestacy in the event of the death of the Lessee. The Lessor retains the right to sell, transfer or mortgage the freehold, but the law states that this cannot affect the rights of the Lessee under the Lease Agreement.

In addition to creating this new system for acquiring property by long term lease, this law also increases the area of property which can be purchased by a non-TRNC citizen as a freehold from 1 donum per household to 5 donums per household providing the property consists of just one dwelling.

With relation to permissions to purchase for acquiring the freehold of a property, apartment from the change to the area of the property which can be acquired as outlined above, this law does not make any changes to the procedure for the permission to purchase to be granted. There has been speculation recently that the Government intends to reduce the length of time which permissions to purchase take to be processed. I believe the Estate Agents Union have made various suggestions and submissions to the Government, including a suggestion that ‘maps’ showing which areas are not suitable for purchase by non-citizens are so that applications for permission to purchase which are outside of these areas can be granted immediately. However, at the moment, these are just proposals which are being discussed. I am not aware of any draft legislation which has been prepared to put these proposals into action.”

6
Mortgaged land
There is a mortgage on the land we and 7 others live on, the lawyer did not do a search when we bought ( he said he would / had ) now the bank want to sell the land or want paying $50,000 the land owner says we should pay as he will not.
The builder has ceased trading and has no assets we have no funds to pay off this debt if the bank sell the land can we be evicted from our home ?
This is are only home and we have lived in it almost 5 years.

“This is a very difficult situation…..
Unfortunately, prior to 2nd January 2008, there was no mechanism for registering Contracts of Sale at the Land Registry and therefore, purchasers had little protection between purchasing their property on Contract and obtaining their title deeds. There was also a period during which the Land Registry restricted access to Land Registry searches making is difficult for advocates to carry out proper Land Registry searches. This, unfortunately, meant that some people purchased properties which were already mortgaged by vendors when they were purchased or were mortgaged by the vendor subsequent to the Contract of Sale being signed.

It is difficult and dangerous for me to provide specific advice to your situation as I am not in full possession of all of the facts and crucial information could therefore be overlooked, so I will try to provide some general advice.
If the mortgage did not exist at the time your Contract of Sale was signed and was registered subsequently, you could try to argue that your interest in the property was prior in time to the mortgage and that therefore the mortgage should be subject to your interest in the property and/or that the bank did not carry out the due diligence which would reasonably be expected of a bank when deciding whether or not to grant this mortgage to discover any third party interests in the property.

If the bank has taken the borrower to court and obtained judgment against him, the next step will be for the bank to seek to enforce that judgment by repossessing the properties and selling them. The only way in which you can attempt to stop this is to instruct an advocate to apply to the High Court for certain orders (Prohibition Order, Certiorari Order and Declaratory Judgment) to stop the judgment which the bank has already obtained and/or to try to get the judgment quashed and/or to obtain a declaration that for the reasons above, should take priority over the claims of the bank. The bank will try to counter this by arguing that your interest by way of a Contract of Sale was an ‘unsecured claim’ and that the mortgage being registered at the Land Registry is a ‘secured claim’ and that it should therefore take priority over your interest in the property.

As far as I am aware, there has never been a precedent case on this question in the High Court. Therefore, it is impossible to tell which way this would go.

If the mortgage existed at the time your Contract of Sale was signed it will be difficult to argue that your interest should take priority and therefore, your only remedy will be to seek damages through the court for breach of Contract against the vendor and the landowner (depending on the terms of your agreement) although if neither of them have any other assets, enforcing such a judgment may be difficult, or to come to an arrangement with the bank for the debt to be paid off and for the deeds to be transferred to you.

If you have discovered that a property which you have purchased is mortgaged, contact your advocate to discuss the situation. The example given above is an extreme case in which the borrower appears to have defaulted on the mortgage and the bank appear to have taken the borrower to court and obtained judgment against him. There are some situations, however, where the mortgage can be managed between the purchaser and their lawyer and the vendor, for example by negotiating a re-payment schedule with the bank and the vendor for the mortgage amount to be paid off from remaining stage payments under the Contract of Sale or for the bank to accept alternative security for the loan thereby freeing the property which has been sold. Whether this is possible or not really does depend very much on the individual circumstances of the case.”

7
Property land Tax
Property land Tax, this was put onto our water bill. The builder has had this bill for over 2 years and because we paid our final payment went to the Beledyi and said that this is down to the owners to pay. We have not got our kocans yet and this was the first we new of the tax.
There is also 2 years of penalties on there.
Is this down to the builder or us? as they did not forward it onto us 2 years ago..

“Please see my explanation under question 2 above. If you have only just received possession of the property, you are not liable to pay for previous years. You are only liable to pay from the date on which you took possession. If on the other hand, you have been in possession for over two years, you are liable to pay the back payments from the date on which you took possession. This is because generally, contractually, the obligation to pay for the property tax passes to the purchaser when the possession of the property is passed to the purchaser.  If, however, when possession was delivered to you, the vendor did not apply to the Municipality to amend the records so that separate individual property tax bills would be issued for each individual property on the site, the bill would not have been delivered to you and you would not have been aware of it.

Only one bill for the land would have been issued to the builder. The builder then should, really, have contacted you at the time to inform you and collect payment so that the late payment penalties could have been avoided. If this is the case, I would recommend you speak to the builder and explain that you are wiling to pay the back payments, but that you feel he should pay the penalties because he did not register the individual properties for property tax or did not bring the bill to your attention at the time it was due. Hopefully you will be able to reach a compromise.”

Unfortunately Naomi cannot reply to any comments, Lincguide wishes to thank her for giving up her time free of charge. Our apologies, if your question hasn’t been answered please see last months Q & A’s for further advice here >.
If you have a question for Naomi click here >

She can be contacted via email info@nmplegal.com,
Alternatively additional information is on NMP legal’s website www.nmplegal.com

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