A RETIRED couple was recently told that the flat they had bought in 2002 would be put up for auction because the person who had sold it to them had failed to make his mortgage repayments to the bank, which was in possession of the title deed. Having exhausted all means of recovering the loan it had given the seller, the bank was left with no option but to auction off the flat.
The couple, who had paid for the flat in full, lost their property for being too trusting and assuming that everyone was as honest as they were. They did not seek the services of a lawyer before making the transaction with the result that the seller never gave them the title deed which he carried on using as security for a bank loan he was not repaying. It is a gross injustice for which, unfortunately, there is no easy remedy.
The cheated couple could take legal action against the seller, but this would be a costly and long-drawn-out procedure which they do not want to pursue. Could the Attorney-general bring criminal charges against the seller for fraud? It is very difficult to say because if the sales contract was drafted in a way that protected only the interests of the seller, in theory, there would be no criminal responsibility on his part.
The news would have sent shock-waves in the expat community of Cyprus which numbers some 30,000 people who own properties without title deeds. If one bank decided to auction off a property, the title deed of which was in its possession, what would stop others from doing the same, once a developer had defaulted on his loan repayments? There must be developers who are in dire financial straits because of the recession.
Banks are reluctant to go down this path, for now, because it would annihilate confidence in the construction industry and, ultimately, the economy. The fact that there are almost 100,000 Cypriots without title deeds for their properties (even though the majority has no title deeds because of building permit violations) would make any attempted re-possessions a major political issue and spark social unrest.
Admittedly, it is no consolation or security for people, who had paid for their property in full, to depend on the good will of the banks, in order to hold on to what rightfully belongs to them. And the tragedy is that nothing could be done retroactively to protect buyers. It is an outrageous state of affairs that makes a complete mockery of all the rhetoric we hear about rights and protection of the consumer. A society that cannot guarantee the property rights of people cannot really talk about rule of law.
