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Pauline Read on Poll: banks giving mortgages to developers after a property is sold
There is currently, throughout Cyprus, a practice of Banks and other Lending Institutions lending money on property they know to have been paid for by, and contracted to, someone other than the Builder/Landowner. As a result of these builders becoming bankrupt the purchasers’ properties are being auctioned by the banks in order to recover the debt.
This poll has been set up to see if the readers of NCFP would take any actions about this and, if so, what?
number of views: 158
The only way to prevent such auctions is by strong coordianted prevention, these auctions are the thin end of a very thick wedge.
It is time for all expats in the TRNC to realise that,”One bleeds, we all bleed”. Maximun attendance at any such event and maximum international bad publicty for an already bankrupt government are the only things that we have any effect. Anyway, how much tear gas can they afford?
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It is not only ex pats that are suffering but also TCs I know three that are in houses in hock to banks (without their consent or prior knowledge) When are the govt. going to criminalise this issue. My lawyer tells me it’s just “a breach of contract” a civil thing. What is fraud then? When someone (a developer puts the property you have paid for in hock to the bank? Apparently not.Maybe we should all take mortgages out on the properties we “own” irrespective of the Kocan issue (who owns what) and live there as long as we can then just take the money and run. seems to be the custonm in North Cyprus, they can’t get upset by it, as it’s “just a civil thing”. TRNC Law is about as useul as an ashtray on a motorbike.
I have grave doubts that my builder will ever be able to repay his debts, especially as he seems very able to open a new company (debt free?) and let the other go to the wall. Other instances where a company sells the houses, the company owner ownss the land and the company mortgages the houses, defaults and the land reverts to the owner. (Company naturally bankrupt. The owner makes a mint (initial purchase price plus the mortgage and what’s more gets to keep the land) That isn’t a crime? That in my book is deliberate, premeditated fraud, and be it a breach of contract or not, should be a criminal act.
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It is common in for developers, instead of purchasing land and then developing and selling to third party purchasers, for developers to have an agreement with landowners under which the land remains in the name of landowners. İn general developers will parcelise at the beginning of any construction this must be made compulsory and a temporary title deed (NO) given and then development of the land commences. They then contractually agree to deliver a certain number of properties or cash to landowners in consideration for the land and sell the others to third party purchasers for profit. İf the land remains in the name of the landowners and a developer subsequently goes into liquidation the land is not at peril of subsequent litigation by creditors of the developer. Creditors could only obtain enforcement and execution of any judgment against the developer assets registered in the name of the developer.
Therefore if the land is not registered at the land registry records in the name of the developer, it is not the developer’s assets and therefore cannot be used in execution of a judgment against the developer. Liquidation has ramifications for the completion of properties. The purchasers of properties now have to negotiate with the landowners directly to transfer title to the properties to them and to try to instruct sub-contractors to complete the outstanding work to the properties or try to commence litigation against landowners if the landowner will not transfer title.
Purchaser may or may not have a direct contractual relationship with the landowners and depending on the terms of agreements have to try to establish a direct relationship with landowners and argue that landowners have an obligation by way of an unjust enrichment in the form of the semi-completed properties. This situation, causes a great deal of litigation for courts and to a certain extent courts tend to sympathise with the landowners if they are not at fault and have not received what they were contracted to receive from the developers under the agreement between landowner and the developers leaving the purchasers in disavantaged positions. İt should be that developers and landowners are responsible in situe or there is one specific owner on title. Therefore the practice of obtaining further morgages on land in non consideratin of purchasers should cease unless banks are prepared to reinburse purchasers and then morgage to landowners or developers. All developers and landowners must inform banks of the financial value of their outstanding purchasers contracts it would be a criminal offence to not disclose.
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and the government is partially at fault by allowing such a ridiculously long property purchase process that means that buyers are having to pay for their property years before they get to own it, if they ever do.
It is a terrible stain on the TRNC, it’s people and their economy. No wonder the property industry has collapsed with people now knowing just how at risk they are of losing their money if they ‘buy’ a property in North Cyprus. Whilst the recession has played a part, the poor legal framework in North Cyprus has been & still is, a fraudsters charter.
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You can put a mortgage(charge) on your own property before you
get the title deeds but you need to permission of the Landowner/
builder to do so. Obviously the best time to do this is at the
outset and if the Landowner/builder wont let you – walk away.
Registering your Contract is just not enough, mortgages can appear
behind your Contract which means, you would have first call on
the Contract price but anything left goes down the line and indeed
if the second mortgage is called in you would either have to pay
that amount from other resources or sell to pay of the second
mortgee. Diabolical isnt it.
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Robert Lessin (Wall Street) has a house in Northern Cyprus, seems he has been having problems importing furniture, or so he says on twittertwitter.com/rlessin.
His son and his internet mates didn’t seem to mind the lack of furniture
http://valleywag.gawker.com/5062424/its-the-end-of-web-20-as-we-know-it
Maybe he can help with this banking situation ??
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What mortgage problem?
From the pathetic response there cannot be a problem
OR
Has someone poured some water and cement into the sand they have
so firmly stuck their heads in.??
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