DEVELOPERS yesterday blamed red tape and flawed legislation for a massive backlog in the issue of title deeds to homeowners.
The comments came after reports that the Land Registry department had launched an investigation into 50,000 cases in which homeowners had not been issued title deeds to their properties by developers upon completion and payment of their homes.
According to yesterday’s Politis, thousands of people from Paphos to Protaras are expected to take legal measures against five development companies and contractors who have failed to issue them with title deeds to their homes.
The fact that home owners don’t have their title deeds also means the government is losing millions of pounds in transfer fees and taxes, since properties without title deeds as taxed as plots of lands and not homes. It is thought the government is owed a total of £250 million in transfer fees.
According to the Land Registry department, title deeds have not been issued to around 50,000 homeowners after local planning departments found that building permits had been breached or houses had not been built according to specifications, but also for minor breaches including the construction of a covered garage that was not specified in the building permit.
But speaking to the Cyprus Mail yesterday, property developer Antonis Loizou blamed red tape and current legislation for the delays.
“Obtaining a title deed to your home is a long and unnecessary procedure,” he said.
“It usually takes between three to four years to obtain your title deed after the house has been built. If you are in Paralimni, it could even take you up to 10 years because of the red tape in the local municipality. In Larnaca it takes around two years and in Nicosia three years.”
But Loizou said there were also cases in which deeds were not issued because the developer or the client had broken the law.
“If, for example, the developer was supposed to build nine houses and he built 10, then none will get a title deed,” he said.
“If I build 10 houses and sell them and one of the owners decides to build a garage when that has not been specified in the building permit, then none of the houses will get a title deed because one of the 10 has broken the law.
“But there are housing estates now consisting of 100 houses and if one has broken the law none of them get a title deed.”
Loizou said the problem could only be fixed with a change in the law.
“It’s ludicrous, why do all of them have to be denied a title deed because one has broken the law? But the law is such that all the houses are affected. The legislation should be changed so that those who built their homes according to their permit can get their title deeds.”
But Loizou also admitted that developers often held on to title deeds or were not able to issue them due to financial problems.
“There is also the problem of developers not being able to give the title deeds because they are bankrupt or owe money to the bank,” he said.
“For example, if I take a bank loan of £500,000 to build an apartment block, sell the apartments and not pay the bank, then the bank will not authorise the transfer of the title deeds until I pay the sum I owe.”
Politis pointed out the current legislation was flawed since the cost of the transfer fees was based on the property’s value on the day of the signing of the agreement between buyer and developer, meaning that if the house was worth £100,000 10 years ago and the title deed was issued today, with the value of the house being £200,000, the government would be losing around 50 per cent in transfer fees.
