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Deciding on property compensation

Deciding on property compensation

14.03.2022

We believe that it should be clarified what constitutes the loss of the right to use property and compensation for it by rent.

The topic was raised in a number of court cases in which we acted as expert witnesses. In several cases, district courts have ruled that despite decades of illegal government occupation of the property, registered owners should be compensated based on rental income lost during that time.

Our opinion is that when the seizure of property was illegal and for such a long period of time, the owners actually lost their property in terms of free use and exploitation and therefore should have been compensated on this basis, since the seizure was open and ended without releasing property in view.

It is one thing to rent out your property for a certain period of time with the necessary conditions (method of payment, increase in rental income, etc.), but another thing if the owner cannot use his property for such long periods of time.

The difference between the District Court’s decisions and the approach we recommend is significant. This is especially true when it comes to land, especially land that is in built-up areas.

In one case, the approach of the land office was based on the annual lease of land for crops at a price of 1.0 euro/sq.m. Based on our approach, it should have been €5.0/sq.m.Similarly, let’s say someone had to lease a lot to a neighbor to use as an outdoor parking lot, the owner might not even bother to ask for rent, but if that same neighbor asks the owner to let him use the same lot for 30 years and without an agreement on the end of the occupation, could the owner accept a nominal amount or none? Absolutely not.

In most cases, our approach was not accepted by the courts, which opted for the land administration approach.

In another case, the owner of a well-maintained farm (orchard) of 200 donums in the Paphos area received a compulsory purchase order for the construction of a water dam. The owner has provided audited accounts, duly approved by the Inland Revenue, showing an annual income of €250,000, which increases as the garden matures. The Land Office based its compensation approach on how many gardens were leased out and offered the owner €450,000.

We argued that a business with an annual income of 250,000 euros is certainly worth more than 450,000 euros, and we filed a claim for 1 million euros, along with literature on the subject, reports from the Ministry of Agriculture and so on. In this case, we won the dispute and our client received over 1 million euros in compensation.

In another case, it was a client who owned a property on a beach that was separated from the road by a strip of land that blocked access, and since this strip was under expropriation, the owner could not even secure the right of way, preventing any development on his site.The expropriation existed for 20 years and the land was located in the tourist area of ​​Ayia Napa. We lost in this case.

In another case, in the Larnaca region, the land office used comparative data from a location 40-50 km away to substantiate its estimate. The references mentioned were located in the Limassol area, while the site under appraisal was located in the village of Ormidia and was a development zone land, while the Ormidia site was agricultural. We won after a long fight in court, but why do people have to go through all the difficulties to prove something self-evident?

Sometimes we wonder how a judge can decide a case when faced with such opposing opinions from expert witnesses.

There are all sorts of opinions on such matters, and sometimes we wonder if a judge is called to pass a Solomonic judgment.

It is worth noting that property owners can be a little greedy for compensation, ignoring the testimony of their lawyers and other experts.

In the 42 years of our office, we have faced all sorts of decisions and claims.

In general, I believe that our judges have a high level of knowledge and understanding, and this is one of the few institutions that still maintains high standards for protecting society, but they are also human and make mistakes whether we like it or not.

Antonis Loizou & Associates EPE – real estate appraisers, real estate agents

Source and photo: www.cyprus-mail.com, Editor estateofcyprus.com
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