Home Buyers Pressure Group

Meeting with Interior Ministry

6th February 2007

MINUTES

 

Present                            (AA) Alı Alnar, Undersecretary for Immovable Property, Interior Ministry

(ES) Erkut Şahalı, Private Secretary to the Prime Minister

                   (HÖ) Hüseyin Özel, Director, Public Information Office

                   (LR) Two representatives from the Land Registry (names to be advised)

                                      (AG) Angela Gallen, Cyprus Today

(DJ) David James, HBPG Member

(MS) Marian Stokes, HBPG Member

Minutes                            (SV) Sheila Vango, HBPG Member

 The meeting commenced at 11.00 am with Ali Alnar (AA), who is the Undersecretary of State responsible for Immovable Property for the Interior Ministry. AA started by welcoming us to the second of the promised monthly meetings to discuss the issues highlighted by our members and their experiences of the purchasing process within the TRNC. The following is a fair representation (given translation) of that meeting: 

MS:    Mr Alnar, at the last meeting, you returned to us the questions with answers that we had compiled back in October 2006. The reason we asked the questions was to receive a official version of some of the processes we, as foreign buyers, encounter during the buying process. We have now had these answers translated, and as with any discussion of a process this has thrown up more questions! Some questions were answered very fully, others not so well and some not at all, can we go through these with you today to clarify any ambiguity? 

AA      We (laughs) thought that might be the case and yes, we think that would be a good idea as sometimes we did not fully understand the reason for the question and of course, we, like yourselves, have to get the questions translated from English to Turkish and sometimes the meaning is lost in that process. You will also be glad to know we have the answers to your second sheet of questions (these were then handed to MS).  

MS:    Can we look at the first question surrounding the Permission to Buy process? We understand the need for the process as described in answer A) regarding the application to the ministry and then understand that the process then splits into two distinct parts – one on the individual, the other on the property in question. As most of our member’s problems emanate from problems with the property, such as refusal of permissions due to military refusal, or finding the land is mortgaged, or the boundaries are wrong – can we ask why these issues are not resolved prior to the land being marketed?  By this we mean that if the land was classified by the Interior Ministry as being suitable for purchase by locals only, no foreigner would be paying for properties they will never get the deeds to. 

AA      The process is like this because it was designed for the local population and they are not bound by such restrictions. 

MS      But we are here to discuss how the locally designed rules and processes fail the foreign buyer and by not classifying the land into groupings as being suitable for sale to anybody and locals only, there is a big problem for our members when they cannot get their rightful, paid for, title. 

AA      But they should not buy unless they have received their Permission to Buy, then the problem would not exist. 

MS      Mr Undersecretary, I hear what you are saying, but saying it and applying it are two very different things when in the past, and currently, applications are still taking months, if not years to process. 

AA:     We are still working very hard to clear the backlog of applications and there are now about 2000 pending, we hope by June 2007 we will have cleared all the backlog and the ones received between now and then will be processed in a much quicker timeframe – between 8 – 12 weeks. 

MS      In the meantime though, buyers will still be told that the PTB process is just a formality (if they are told about it at all), that it is a check on you as an individual and that the chances of you being turned down are zero – unless you have a criminal record in your own country. But this is not the truth is it. People are turned down because the military or the police are not happy about the location of the property they are buying. This is crazy; these areas should be clearly identified and not sold to foreigners in the first place.  

AA:     It is not as simple as that, some of the military installations are not visible to the eye and it would be imprudent to identify them in this way. 

SV:     Mr Undersecretary, do you have any statistics as to the number of foreign buyers who have been refused PTB following a negative report from their home countries and those refused by the military? I would make the point at this junction that if I had a poor history in my own country, I would not apply to buy a house here as I would know my application would fail, instead I could rent a house next door to a army camp and nobody would know. 

AA:     No we do not have any such statistics (after much laughter). 

MS:    I am sorry to keep on about this issue, but it is the major cause of the many problems encountered by our members, the delays in processing these applications have opened the door for many deceitful people to cheat our members and we must resolve it. For example, do you have a list of rejections that we can see, maybe we can identify members on that list, who are still awaiting an answer? 

AA:     Please give us a list of people you know who are still waiting for permission and we can check on the progress of their applications. 

MS:    It is the rejections I am particularly interested in, I have hundreds still waiting (2000 you said), can we identify these? As I suspect there may be many people who are still waiting to hear a positive result when they may have been rejected. 

AA:     We shall look at this for you, but if you have any details that may help us, could we have a list? 

MS      I shall draw that up for you.  

AA      With the new laws coming into being, things will be organised differently and these irritations will be a thing of the past. I am sure you appreciate that we inherited a backlog when we came to government. The circumstances were such that the process became unworkable, especially during the 2004 property boom and the process was not enforced by those involved in the boom. The PTB process is now working much faster, many other related offices are now being upgraded and the whole process, coupled with the new laws will make things much better for future investors.  

MS:    Thank you, are you going to put out a statement to the effect that the PTB process is going to be enforced when you are in a position to do so – around June 2007? 

AA:     Yes I can do that. 

SV:     Mr Undersecretary, we have always been fully aware of the efforts made by this administration to clear the problems inherited, and we know you have been listening to us as we can see the results as the backlogs get cleared, however, it has been said by many in this administration that the problems we have found ourselves facing are our own doing because we broke the law by not waiting for our PTB to be granted or denied. This is the first time that you have stated that the law has been broken/ignored for economic reasons (we all know that the building boom would not have occurred if the law had been applied to the letter) - it would be nice to have this acknowledged in any statement you issue in the future. 

AA:     When the time comes we shall make sure all the relevant bodies know the law. But we would also ask you to make sure your members know that they can apply for their PTB themselves, we would prefer that applications are made in person as then we can contact the buyer straight away if there is a problem. 

MS:    Minister, it is our experience that this information does not reach the buyer until it is too late and they have been lied to by the estate agent, builder and sadly in many cases, the lawyer! How can we ensure that the buyer is informed of their rights before they fall into the estate agents or builders clutches?  At one time you and I discussed catching the buyer on their way into this country, but nothing came of it, have you had any further thoughts on the subject? 

HÖ:    If I was a stranger in England and wanted to know the laws, I would seek the assistance of a lawyer. 

MS      With respect, this is exactly what many of our members have done – but have been lied to by the very people they should be able to rely on 100%. 

Much discussion then took place in Turkish 

AA      We have being discussing the way to let the buyer know what the laws of the TRNC are. In another arena, we are currently discussing the issue of immigration law and are considering many ideas of letting people know about their entitlement about staying in the TRNC and the most pleasing idea is to hand a leaflet out at immigration when people come into the TRNC. We are thinking this might be a good place to inform people of the buying process as well or maybe in the in-flight magazines, so that they know what is expected before they start the process. We are also thinking about the Estate Agents Law currently being discussed in parliament; maybe every estate agent could be obliged by law to print the Baro guidelines to Property Purchase on their websites. We shall discuss this further, but we are sure this could be handled quite easily. We can also let them know about your website and give out your contact details so that they can seek your assistance. 

MS      That would be really good, no one can argue with a government information leaflet and if it is widely available, no one can say they could not find out the truth for themselves. Can we talk about Question 7, the answer does not address the question, so something must have been lost in translation. We were not saying the buyer changes their mind, we are saying that either the permission is cancelled, or refused or the seller changes his/her mind, after the buyer has paid in full and may have lived in the property for 2/3 years.

AA:     The deeds should go to the buyer unless the PTB is refused. 

MS:    But there is no protection for our members in law for this to happen, this is why many of our members are being ‘blackmailed‘ into paying the builders tax, because the builder says he will not transfer the house to them unless they pay his tax. 

LR:   But the deed is lodged at the land registry (this by a representative of the land office). 

MS:    No, that may happen for the local population, but as we have to wait for the PTB before the deeds can be transferred into our names, the builder holds the deeds and our money for however long that takes. 

Much discussion again 

LR:     We would suggest that this can be simply resolved by ensuring the contract for the land is separate from the contract for the build (members need to be clear that the PTB process only allows your name to be transferred to the land you are buying, it does not automatically register your house as being on that plot of land, that is a another procedure that needs to be completed). The deed for the land can then be held by the land registry office until PTB is granted. As the PTB law is going to be enforced shortly, this should alleviate this problem. This is only one idea, we will discuss others to find a way of stopping this sort of practice and protecting investors.   

AA:     I am sorry , we have no further time today, can we arrange to meet again on the 6th March at 11 am to continue this discussion? 

MS      Yes , thank you today we feel we have made some real progress and look forward to seeing some of these ideas take form and make the TRNC a better place in which to invest.

 The meeting drew to a close at 12.30am