Steering
Group: June Hall, David James, Marian Stokes, Nigel Watson Minutes: Sheila
Vango
The
meeting was opened at
Marian offered a warm welcome to all new members and thanked those present for attending our monthly meeting. She went on to introduce our guest speaker , the lawyer Mr Talat Kurşat and gave him the floor.
Talat Kurşat
Mr
Talat Kurşat started by explaining his legal history, that he is a British
trained solicitor, who went on to become Barrister in the
Like
all laws applicable within the TRNC, contact law is based on the law practiced
in
One of the main loopholes that has become evident is that sellers of land (usually a builder) cannot be forced to pass on the title deeds of a property to the purchaser. To minimise the risk taken by a local purchaser, the following should take place – a contract should be properly drafted by an independent solicitor, it should be signed by both parties and witnessed by two independent witnesses and that contract should then be lodged with the Land Registry Office within 21 days. The deeds should then be handed over within two months; if this does not take place then the remedy is to take the vendor to court under the rules of Breach of Contract via Specific Performance – i.e. the sale has not been completed and the court can enforce transfer of the deeds without the consent of the seller.
However the foreign community cannot lodge their contracts with the land office as they cannot obtain the deeds until such time as Permission To Buy (PTB) is obtained from the Council of Ministers. This is a procedure that was introduced many years ago, before the building boom, to ensure that the island was being populated with desirable newcomers and was usually granted within months of application, this is one example of where a procedure has been overtaken by events. Although it is still a criteria for purchase, it is now taking years for applications to be processed due to demand.
Off plan purchases (before a house is built) with instalment plans is also a new development which does not facilitate the 21 day Land Registry contract lodgement requirement which safeguards the title deeds until final handover.
Instead we have a position whereby a contract is drawn up – and although legally binding on all parties – does not contain provision for the ‘handover’ of the title deeds until PTB has been obtained and the property which you have purchased remains in the vendors name as his/her asset.
This brings in its wake two main problems:
As the title deed
is not held independently by the land Registry Office, there is no
automatic handover of deeds to the purchaser, the vendor has to be
approached to facilitate this process – and as many of our members have
discovered this can be problematic as the vendor can ‘change’ their mind
about the sale, or demand more money, or expect the purchaser to bear
additional cost, such as taxes payable by the vendor.
As the property
you have purchased remains an asset of the vendor under law, he/she can
dispose of that asset without your knowledge – the vendor can sell the
asset, mortgage the asset, transfer the asset to another person, and
finally the vendors creditors can lay claim to the asset.
So what course of action is available to us all?
If
the vendor changes his/her mind regarding the sale – a clause should be written
into the contract whereby all funds are returnable and compensation paid. Many
of us have contracts stating this – but the compensation may be capped, i.e.
£10000. If the compensation
You
can have a clause written into your contract whereby your interest in the
property in question is lodged at the land registry – similar to the charge
that a mortgage company enters into the Land Registry at home, so that if you
sell your
If you have missed the boat on that one, you can protect your investment in retrospect by having an injunction placed on the asset, noting your interest in the asset lodged at the Land Registry. To do this you must incur legal costs (which varies from solicitor to solicitor).
You can also put the property in question into trust – this effectively means that you find a local TC who is willing to act as a trustee, the property is bought in their name – clear title deed passes as the trustee is not bound by the restrictions that apply to foreigners. You apply for your PTB in the same way and once that is forthcoming the property is transferred to your name. The laws on trusteeship are tight within the TRNC and anybody abusing this position may find themselves facing a prison sentence. The trustee is entitled to all costs of carrying out this function on your behalf and you will be responsible for all taxes etc that need to be paid.
Mr Talat Kurşat then went on to say what has changed recently
Transfer fees have
been set at 3%
Vat on property
has been set at 5%
By-laws have been
passed restricting builds in certain areas
The Land registry
Offices are being relocated and the whole system is being computerised
Talks are
continuing around the Laws of guarantee to safeguard the purchaser –
whereby the Contract of Sale can be lodged at the Land Registry
Rules are being
drawn up to ensure that Estate Agents meet certain criteria and follow a
Code of Practice
Unqualified
builders are being identified and closed down
All builders must
engage the services of a qualified architect as a member of staff
More power
stations are being build to meet infrastructure demands
Mr
Talat Kurşat
was asked about the current status of AGA purchasers – his advice was- not much
can be done at this time as the Government has stepped in, you have no choice
but to wait on their findings, decisions and actions.
Asked about selling a property when the title deeds are not in your name – can be done but needs permission of current holder of deeds.
Asked
about enforcement of late penalty clauses – take possession of your property
and then sue for Breach of Contract – may take two years (the advice of HBPG is
to deduct from final payment and let them sue you!)
Complaint about your solicitor – report them to the Bar Association in Lefkoşa.
Official Meetings
Marian reported that the promised meeting with Government which she expected to take place in February has not taken place – once again.
Success Stories
Nothing
to report this month
Administration
See piece on Contract law above
Other business
The new website can be found at www.homebuyerspressuregroup.net Please have a look and tell us what you think.
The Valentines’ Love Your House Party took place on Friday 17th February. Many thanks to our DJ an evening full of good tunes and the memories they evoked of our younger days! Thanks also to Reg for sharing his birthday cake and his staff for the tasty buffet. The evening raised 160YTL for funds.
The
meeting drew to an end at