Jim Murphy

Minister for Europe

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Tuesday 05 February, 2008

Property issues in Cyprus and Spain

A lot of the letters I receive from members of the public, as well as MPs and MEPs writing on behalf of their constituents, are about problems people have experienced buying property abroad. I'm really pleased that lots of British citizens are investing like this throughout the EU - making the most of how easy it is to travel, live and work in different countries - but it's clear that buying property in other EU states is not always without risk. Legal systems in other countries are different to those in the UK, and language difficulties can be a cause of confusion. Prospective buyers should ensure that they take all the steps needed to avoid disappointment and sometimes serious financial consequences.

Two of the most popular destinations for UK house buyers are Cyprus and Spain. The FCO's travel advice pages for those countries warn potential purchasers of the risks involved with purchasing property in these countries and we strongly recommend that people seek qualified legal advice from a source independent from the seller before committing to a purchase. There have been - and still are - cases where dishonest estate agents and lawyers have knowingly taken advantage of the unwary. But I must emphasise that the FCO cannot become involved with private property disputes and it is important that independent legal advice is sought.

The travel advice for Cyprus contains a link to a document of frequently asked questions on property in Cyprus, containing information useful to anyone considering purchasing a property. The travel advice for Spain also has links to the British Embassy in Spain's website, which holds further details.

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I understand that Cyprus' President Christofias will be visiting the UK in May. This would be a very good opportunity for the British Government to bring to his attention the severe problems faced by many thousands of British expatriates who have bought property in Cyprus. Those problems include the non issuing of title deeds, structural faults, illegal building and developers extorting money from hapless buyers. I believe that a peaceful demonstration is being organised by a number of those who have been scammed when the President addresses the London Cypriot community at Alexandra Palace on May 18th. Nigel Howarth

Posted by Nigel Howarth on May 06, 2008 at 01:44 PM BST #

We have now been in the E.U. for 4 years+ and this problem was going on many,many years before that why is something not done earlier Cyprus has had hospitals built for it, has been given millions over the past decade to upgrade hospital systems. Anyone in the Government Hospital system, will no it is not bad but has no qualified persons to operate this machinery.I know this has nil to do with property, but it is how they are here and I think it is the people that get away with murder here where else could you throw blazing vehicles over m/way bridges and get away with it. Do 'wheelies' past crowds of people, builders blatantly overcharging for pools as much as 80-100, this is third time in 4 years we have been promised deeds, now people have to take down garden sheds, pergolas, and fences to make the dees legal, whose fault is it that we are not given these deeds with the purchase this would slow down the dwindling of green areas and make the whole procedure of this greed slower and make all concerned pull their fingers out and be 'good' Look at the price of will writing from €300- € 800 estate agents fees up to 17 unbelievable commission rates make the most of it, it can't last much longer. then they can go back to growing potatoes, if they can find land. What is the training period for a solicitor and/or conveyancer here-----3 months. Where have they all come from, so many were not needed 10 years.

Posted by Dave on May 07, 2008 at 08:35 AM BST #

In the worst case, which is generally buying off-plan, here are some examples of what can go wrong. Building without planning permission, without a building permit, not following the plans, altering the plans, building over footpaths or not completing footpaths, building on land liable to heave and landslip, mortgaging the land after selling it and not completing the development. Then no Final Certificate of Approval can be obtained, so occupation of the property would be an illegal act and new title deeds would not be issued. Buildings that would be demolished in other countries for transgressing the regulations are allowed to stand. In fact, it actually profits developers not to get a Final Certificate of Approval because then they continue to own the property and can make more money out of it, mortgaging the property or charging the purchasers for cancellation of contract if they want to sell. The advice from the FCO to seek qualified legal advice from a source independent from the seller before committing to a purchase is creating a false sense of security, because it will generally not avoid the problems. A solicitor can only tell the purchaser what the Cyprus law requires and what the regulations are, but not when the law will be enforced or whether it will ever be enforced at all. This is not a familiar situation for British people and they have no experience or training to enable them to cope with it - they just get ripped off in their thousands

Posted by Steve on May 07, 2008 at 01:56 PM BST #

As Dave has pointed out, many people who have bought property in Cyprus compound the problems by erecting garden sheds, pergolas, swimming pools, etc illegally - without having obtained the required permits. Looking at the overall situation, there are many problems: Bureaucratic delays and other impediments result in Title Deeds taking ten, twenty, or even thirty years to be issued; planning and building applications can take two years or even longer to process. Unscrupulous property developers prey on unsuspecting property buyers. They build without planning and building permits, they sell property that is mortgaged, they introduce buyers to their friends in the legal profession who draw up contracts that give buyers little protection. They demand payment for work that hasn't been done, and they extort money from buyers using the threat of withholding Title Deeds to elicit payment. In one case in which I was recently involved, a property developer tried to extort 50 of the property's purchase price from the hapless buyer a 94 year old lady. Imagine buying a property for € 350,000 and then, some years later, receiving a demand from the developer for a further € 175,000 before he'll release Title! Developers even take loans on property that they have sold and which buyers have paid for in full. Due to outstanding loans on property, planning irregularities and unscrupulous individuals and companies that exploit the system to maximise their income, some buyers may never receive the Deeds to their property and become its legal owner. Developers have been known to threaten violence and, in a case currently under Police investigation, two of them allegedly assaulted a British property buyer. So severe was the brutal beating dished out by these louts that the buyer spent several days in hospital recovering from his ordeal. These incidents were widely reported in the local English press. Nigel Howarth

Posted by Nigel Howarth on May 07, 2008 at 03:57 PM BST #

Oops, a small typing error - the lady I spoke of is actually 84 years of age. Nigel Howarth

Posted by Nigel Howarth on May 09, 2008 at 04:14 PM BST #

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