Since our last set of legal help in Northern Cyprus questions, there has been a lot of publicity surrounding the pitfalls on buying property in Northern Cyprus.  Our legal expert Naomi Memhet goes into some detail regarding this on (question 1 ). Please feel free to add comments, however Naomi will not be able to comment on these directly. If you have a question for Naomi, use our form at the bottom of this page (click here). .

1 The Orams >
2 Starting a business in Northern Cyprus >
3 Army service for Non-Cypriot >
4 Deeds >
5 Motoring offences in Northern Cyprus >
6 Confiscated Car in Northern  Cyprus >
7 Title transfer tax >

1 The Orams case.
Since the Orams lost their legal battle, what action/precautions would you advise Brits that own property in North Cyprus to take against the possibility of Greeks looking for compensation in the same manner.

“I would like to start by giving some background information on the ‘Orams’ case as there is a lot of misinformation and misunderstanding about the facts of the case.

The case of Linda and David Orams involves a piece of land in Lapta, T.R.N.C. which Mr. and Mrs. Orams purchased and had registered in their names in accordance with the laws of the T.R.N.C. and subsequently built on.

In 2004, Meletios Apostolides, the Greek Cypriot who owned the land prior to the Turkish military intervention in 1974, obtained an order from the Nicosia District Court in South Cyprus, which is an EU member, ordering Mr and Mrs. Orams to demolish and vacate the house and pay compensation to him for the use of the land. The order was obtained against Mr. and Mrs. Orams in default of appearance i.e. in the absence of Mr. and Mrs. Orams and without hearing their defence. The legal paperwork was served on Mr. and Mrs. Orams in Northern Cyprus in Greek. At the time, they had no comprehension of what the paperwork was about and, understandably, it took them some time to find someone to translate the paperwork and to find a lawyer who was able to represent them in the courts in the South. By law, they had only 10 days from the date of service to file their appearance (acknowledgement of the service of the papers) in the court in the South. Just 13 days after the paperwork was served, judgment was given against them for failing to file their appearance within the time limit. They subsequently applied for this judgment to be set aside, but their application was rejected by the Nicosia court on the grounds that they had no valid defence. The lawyer for Mr Meletios Apostolides, then tried to find a way, by relying on EU law, to enforce against Mr and Mrs Orams and their assets in the UK.

The enforcement in the UK of a judgment delivered by a court of another EU member state is controlled by the Brussels Convention on Jurisdiction and Enforcement of Judgments, Council Regulation (EC) No. 44/2001, incorporated into domestic legislation by the Civil Jurisdiction and Judgments Act 1982 (as amended). This provides, as a basic principle, that any court judgment given in any EU member state must be recognised in all other EU member states, except where ‘this would be manifestly contrary to public policy in that member state’ or ‘where the judgment was given in default of
appearance’ or ‘where it is irreconcilable with a previous judgment involving the same cause of action and same parties.’ For the purposes of the case of Mr. and Mrs. Orams, grounds 1 and 2 were relevant.

In 2005, Meletios Apostolides registered the judgments of the Nicosia court at the High Court in the UK and the judgments were declared enforceable as this was a procedural requirement. No submissions could be heard from Mr.and Mrs. Orams at that stage. Mr. and Mrs. Orams subsequently appealed and judgment was given in their favour in September 2006. This was the first time that the issues of the case were explored in full. Judge Mr. Justice Jack who heard this appeal gave this judgment on the grounds that EU Law is suspended in the North and the administration in the South does not exercise effective control over the North. He also felt that such cases are a result of an ‘international problem ill-suited to be resolved by private litigation’.

Mr. Apostolides then appealed to the Court of Appeal. The Court of Appeal felt that, as this is a matter which involves a substantial question of EU Law, the matter should be referred to the European Court of Justice (ECJ) for a preliminary ruling. On 28th April 2009, the ECJ ruled that the fact that EU law is suspended in the T.R.N.C. does not preclude the application of the regulation, the fact that it is not physically possible to enforce the judgment in the T.R.N.C. because the Government of the Republic of Cyprus does not exercise effective control does not prevent the enforcement of the judgment in another member state. The ECJ also rejected arguments on public policy and rejected arguments that the judgment was a default judgment on the basis that  Mr. and Mrs. Orams had applied for a ‘Set-Aside’ Order which had been rejected.

The matter then reverted back to the Court of Appeal. Judgment was given on 19th January 2010 in which the Court of Appeal applied the ruling of the ECJ and rejected Mr. and Mrs. Orams’ claims that the enforcement of the judgment was contrary to public policy. The Court of Appeal also reject Mr. and Mrs. Orams’ claims that the President of the ECJ when the ruling of the ECJ was given, Judge Skouris, was biased.

Unfortunately, any further appeal by Mr. and Mrs. Orams to the House of Lords (now known as the Supreme Court) has been prevented. Under article 44 of Council Regulation 44/2001, the highest appeal court in relation to the matter of the reciprocal enforcement of judgments is stated to be the Court of Appeal. The legal team for Mr. and Mrs. Orams submitted an application for leave to appeal on the basis that there was an important point of law
i.e. public police which needed to be resolved. However, we understand that this application has been rejected.

In order to try to comply with the judgment given against them at the Court of Appeal, Mr. and Mrs. Orams have submitted an application to for permission to the District Office (Kaymakamlik) for permission to demolish the property. However, this application has been rejected. The legal team for Mr. and Mrs. Orams in the UK intends, therefore, to submit an application for the enforceability of the ‘demolition’ part of the court order to be declared impossible as the Orams have been prevented from complying with this part of the order by the authorities in the TRNC. It is understood that the TRNC Government has also stated that they will pay all of the mesne profits which Mr. and Mrs. Orams have been ordered to pay to Mr Apostolides together with his legal costs and Mr. and Mrs. Orams’ own legal costs and to refund the money which they paid to purchase the property and build on it.

Mr. and Mrs. Orams had, however, prior to the judgment of 19th January 2010, filed a case in the European Court of Human Rights (E.C.H.R.) to argue that they had not received a fair trial in the South in breach of their Human Rights under Article 6 of the European Convention on Human Rights. They are currently waiting for a trial date for this.

A meeting was held last week for the members of the T.R.N.C. Bar Association to discuss the ‘Orams’ case. It was decided that meetings would be sought with the Government to try to discuss legislative measures which can be taken to provide protection to purchasers in the T.R.N.C. In terms of actions/precautions which can be taken, therefore, purchasers should wait for the outcome of further announcements to be made by the Government. Until such announcements are made it is not appropriate for further advice to be given.

Many people have asked about the possibility of using a trust company as a means of protection against an ‘Orams’ type case.  At the moment, I can only say that title is not the only factor to be considered. It is possible that use or occupation of the property without actually having title i.e. as a beneficiary under a trust or as a tenant could fall within the remit of an ‘Orams’ case. Whilst the use of a trust might possibly make it more difficult to discover who the occupant of the property is as that person’s name would not be listed in any official register, this may not completely prevent a claim from being brought. Further, it is important to understand that the concept of a trust in the T.R.N.C. is not the same as it is in the UK. Trusts are treated as contractual obligations rather than property interests. In the event of breach of the trust by the trustee, remedies can be difficult to obtain and therefore it is important to consider these risks.”
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2 Starting a business in North Cyprus
I am considering starting a web based business in NC but to make it work I would probably require at least a couple of drivers with their own vehicles, would I need to set up a business with a large deposit to make this a legal business.

“If the business is active in the TRNC and is employing staff in the TRNC or deriving income in the TRNC, it must be registered in the TRNC for tax
purposes. Unfortunately, anyone who is not a citizen of the TRNC is not able to run a business as a sole trader and must operate the business using a
limited liability company.
In order to form a limited liability company in the TRNC, the documents required are as follows:

*    Articles of Association and Memorandum – these will be prepared by your advocate or your accountant in Turkish to cover the objects of your
company. You should request an English translation so that you are able to read and understand this important document
*    Company incorporation forms MS1, 2, 3 – these will be prepared by your advocate or your accountant

*    For each foreign shareholder, you will require a passport photocopy (the original passport must be seen by the T.R.N.C authorities, or if this
is not possible, the passport copy can be certified at the T.R.N.C consulate in the country of origin (or where none is available the Turkish Embassy).

*    For each foreign director, you will again require a passport copy as above. You will also require a certificate from the Ministry of the Interior or police in the country of origin of the director (in the U.K. the relevant authority is the National Intelligence Service, Scotland Yard) stating that the person has not committed any criminal offence. This certificate must be certified at the T.R.N.C consulate in the issuing country (or where none is available the Turkish Embassy). If there are foreign directors, you will also require the sum of 10000YTL (approximately £4000-GBP) to be deposited in a bank account in the T.R.N.C and blocked there for a period of 18 months to cover any tax liabilities which the company may incur. When this money is
deposited, a certificate is obtained from the bank which is then shown to the Tax Office in the T.R.N.C and a corresponding certificate is obtained from the Tax Office to be presented to the Registrar of Companies in the T.R.N.C. Your advocate or accountant will assist you with this process.

*    Under the Laws of Cyprus, the share capital of the company where there are foreign shareholders must be paid up at the date of incorporation.
The minimum share capital is currently around $100,000USD. This amount must be deposited in a bank account in the T.R.N.C and blocked there until the company has been incorporated. When the money is deposited, a certificate is obtained from the bank which is presented to the Registrar of Companies in the T.R.N.C. Again, your advocate or accountant will assist you with this process.

Once the company has been formed, it will have to be registered with the Tax Office for Tax and VAT. An accountant would be able to assist you with this
process. Only once the registration has been done can you then register employees and, where necessary if the employees are not TRNC citizens,
obtain work permits for the employees. “.
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3 Army Service for non-Cypriot
I am a British subject married to a Cypriot Turkish girl, we purchased our villa in 2008 then late last year my wife and daughter obtained their kimlit
card, and in order to meet the dead line for transfer discount I transferred the deeds to my wife’s name only and omitted myself and obtained the
discount, and yes made a will to ensure the property reverts to me if something were to happen to my wife.
Coming to the point I was told as my wife  has a kimlit card, I too could apply for a kimlit card and get one after first applying for a temporary resendencey and this can take upto 3 months.
I being a non Cypriot and no Cypriot blood have been told I will not have to do the army service, some say you do . Can you please verify my situation?
(We all live in the uk and spend several months in lapta and plan to retire in Lapta rather sooner then later.I am 60 yrs of age)

“We have spoken to the Army Office today in relation to this matter. We were informed that if you submit an application for citizenship, regardless of
the fact that you are a British national with no Turkish Cypriot blood, you will be liable for military obligations. We were informed that there is,
currently, no upper age limit for this. If you have grounds which you believe would make you exempt from military service, you would have to put these to the Army Office for consideration. For example, if you have a medical condition which means you are unfit to complete military service, this could be submitted to the Army Office as a ground for consideration. You would most likely have to undergo a medical examination by the Army
doctor and/or produce evidence relating to your medical condition, such as medical notes from the UK. If you have previously completed military service
in the UK, this would also be taken into consideration by the Army Office and you would need to produce documentary evidence to show this.  Alternatively, you may be able to waive your military obligations by making payment to the Army Office. I would recommend that you contact the Army
Office (‘Asal Sube in Turkish’) in Lefkosa for more information.
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4 Deeds
I purchased an apartment off plan at Bufavento village in December 2003 from Emtan Construction . The purchase was completed in October 2006 , but
due to marriage breakdown I decided to sell in early 2007 . My agent Henry Charles found a local TRNC buyer in mid 2007 who agreed to pay 30% deposit which I received but due to requiring a loan to fund the final 70% balance, the final payment would be made after seperate title deed was issued by TRNC Government . I was advised this would only take a maximum of 3 months , but still now in December 2009 , I am still waiting . My agent tells me the buyer is ready to pay when seperate title deed is issued , but the TRNC Government is delaying this process . What can I do ?

“Without seeing your Contact of Sale, it is difficult for me to advise you in detail.  I assume from the information which you have given that there was no date stipulated in the Contract by which the payment of the remaining 70% had to be paid? Generally, where payments are stipulated to be dependent upon certain conditions, such as the issuance of separate title deeds, it is best to include a ‘latest date’ by which these conditions must be fulfilled and
to stipulate in the Contract what will  happen in the event that these conditions are not fulfilled by that date so there is no uncertainty.

Further, from a vendor’s point of view, it is generally best not to allow the purchaser into possession of the property unless you have received all or the vast majority of the sale proceeds. However, from what you have described, I assume that in this case, a combination of your personal circumstances and the fact that no-one had foreseen that the issuance of the separate title deeds would take so long caused you to accept the terms being proposed by the purchaser.

It is true that there are currently significant delays with the issuance of separate title deeds by the relevant authorities. We have a number of clients who have purchased from various developers who have received their permission to purchase and are ready to receive title, but cannot do so because the separate title deeds have not yet been issued. It is difficult to say, therefore, how much longer it is likely to be before this matter is resolved.

I can only suggest the following options:
- continue to wait for the separate title deeds to be issued and follow up on this regularly with the vendor
- try to negotiate an alternative payment schedule with your purchaser. For example, you could suggest that the purchaser starts to pay you some of the
money in instalments with interest until the separate title deeds are available with the balance being paid then – after all, the purchaser would have had to make his mortgage payments if he had been able to obtain the loan and, at the very least, you would be receiving some form of payment in the mean time. I believe that there are some banks willing to offer loans on shared title deeds and, therefore, it might be worth making enquiries with various banks to see whether you can find a bank which would be willing to lend the money now rather than waiting for the separate deeds.

- negotiate with the purchaser for a mutual termination of the contract. Of course you would have to reach an agreement with the purchaser under which
the purchaser would agree to vacate the property in order to allow you to re-sell it. You would also have to discus what should be done with the 30%
which has already been paid by the purchaser. The purchaser may feel that he should receive a full return of this as the situation is not his fault, but equally the purchaser should understand that the situation is not your fault either and that he must pay some consideration for his period of occupation
of the property.

- consider whether you have any legal rights to have the Contract declared void through legal proceedings if you cannot reach an agreement with the
purchaser. For example, it may be possible to argue that both parties were under a mistake as to a matter of fact essential to the agreement i.e. in relation to the length of time it would take for the separate title deeds to be issued and that, therefore, the Contract is void Alternatively, it may be possible to argue that the Contract is incomplete or too vague to be enforced and that it is void. If the Contract is found to be void, the parties would be liable to compensate each other for any benefit received from the Contract.”
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5 Motoring offences in North Cyprus
If one is fined by the police for an alleged motoring offence i.e. driving on a UK licence when deemed a resident by the police due to visiting the TRNC too often, you state that you can refuse to pay the fine and the matter will go to court. I asume the same applies to other offences like speeding. Does this mean though that you will be stopped form leaving the TRNC?

“If you do not pay the fine, the matter will go to court and you will have to appoint a lawyer to represent you to put forward a defence on your behalf.
However, as speeding offences are generally strict liability offences, there are not really any defences which can be put forward, other than claiming
that the driver of the vehicle at the time of the alleged speeding incident was not you. Where the identity of the driver cannot be established, however, the owner of the vehicle will be deemed responsible. The matter of speeding is different to the situation where the police are alleging that a person is under an obligation to obtain a TRNC driving licence because he/she is resident here, but where the person denies that he is actually resident here. In that case, there may be scope to argue that the elements of the alleged crime have not all been established on the facts.

During this time, while the matter is going through this process, you will not be able to leave the TRNC as your details will be entered on the immigration office computer system”.
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6 Confiscated car in Northern Cyprus
Earlier this year my car a mondeo was confiscated. I had tried to legalize car, but too old to register it.  I was told government do not want old cars on the RD. I donated the car to the Cival Savunma, to be used for practise sessions.  I have just been told my car has been sold at auction for 1700tl.  I feel this is wrong as if it to old to register, why is it not too old to be legal now, also it was donated, not to be sold.  Any ideas?

“The import of motor vehicles into the TRNC is controlled by the Foreign Trade (Regulation and Control) Law 12/1983, 46/1990, 2/1996 and the Motor
Vehicle Age Restriction Regulation 86/2006.

The general rule is that cars and motorbikes cannot be brought into the TRNC unless they are less than three years old on the date of entry to the TRNC.
People who are moving to the TRNC are entitled to bring a car or motorbike which is not more than five years old on the date of entry into the TRNC) or
which has been registered in the name of that person in their previous country of residence for at least five years from the date of their last entry into the TRNC.  For the purposes of this right, a person who is ‘moving to the TRNC’ means a foreign person who is over eighteen years of age and who has officially moved to he TRNC from a country outside of the TRNC and who is not involved in any work of business in the TRNC or a person of Turkish Cypriot origin who has been away from the TRNC for a period of at least ten years (excluding the years during which  the person was at university or in further education) and who is over eighteen.  People who bring a vehicle into the TRNC under this right cannot sell or transfer that vehicle within the first two years of bringing the vehicle into the TRNC. Persons wishing to take advantage of this right, must do so within one year of moving to the TRNC.

Different rules apply to commercial vehicles such as minibuses, lorries, concrete mixers, vehicles for the transport of goods, etc which can usually be brought in the TRNC providing they are not older than twelve years old on the date of entry into the TRNC.  The above age restrictions do not apply to
‘Classic Car’s which are defined as cars 25 years old or older which were classified by the Turkish Cypriot Classic Car Association or the classic and
Sports Car Club as Classic Cars and are approved by the Department of Antiquities and Museums.

If you bring a vehicle into the TRNC which does not meet the above criteria, the customs office will not allow duty to be paid on the vehicle and will
not allow the vehicle to be registered in the TRNC. Usually, you would be given a period of 3 months in which to remove the vehicle from the TRNC. If
you fail to do this within this time, the state property department has the right to sell the vehicle by public auction. I realise that it may seem
illogical to allow the property to be sold by public auction and then used on the road, given the fact that the rationale behind the import
restrictions is to prevent the import of older vehicles into the TRNC, however, unfortunately, that is the penalty which the law stipulates.”
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7 Title transfer tax
Title transfer tax was reduced till the end of 2009. It seems that it will another time be extended till later in 2010… Is it true?

“In 2009, the Government introduced reductions to the taxes payable by purchasers on transfer of title (Land Registry Transfer Fees).
The usual rate is 6% of the sale price. However, everyone has a once in a lifetime option to reduce this to 3%. Most people opt to use this once in a
lifetime option on their first purchase. The reductions introduced by the Government allowed for a further reduction of 75% of these rates. This meant
that, under the new regulations, the usual rate of 6% became 1.5% and the once in a lifetime option of 3% became 0.75% of the sale price.

The deadline for completing the transfer of title at these reduced rates was extended several times during the course of 2009, with the final deadline
being 31st December 2009. Prior to the expiry of that final deadline, we were told by the Land Registry that it was likely that the deadline would be
extended for a further 6 months. To date, however, no official announcement to that effect has been made. The rate being applied at the moment by the
Land Registry is, therefore 6% (or 3% with the once in a lifetime option). There is still some optimism, however, at the Land Registry that an
announcement will be made very soon to re-implement the reductions.
Purchasers who have received their permission to purchase and are ready to take title should, therefore, weigh up the benefits and security of
receiving their title deed as quickly as possible against the possible savings which they may or may not gain by waiting to see whether any
reductions are forthcoming. ”
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