07.03.2022
From time to time we write about some of the weird stuff going on in the real estate industry that catches our attention. There are various scams and other things that we think the public should be aware of. Here is some of them.
1) Signing as a guarantor in favor of the financier. In a recent case, the client signed a surety on behalf of the buyer/borrower before the date of issuance of a separate title deed for the apartment. The title was issued four years ago, but the buyer, despite various invitations to court, does not appear and does not respond to attempts to contact him.
The financier is now suing, so if successful, the financier will take the guarantee, and the buyer (borrower) can get off with impunity. We were told that the guarantor must take the “appropriate” steps to transfer the apartment, which means that he must take care of any taxes, any capital gains and so on that the borrower owes, and then sue them, a process of about seven years or about that in court battles.
2) The buyer bought an apartment in Limassol (a well-known furniture chain), signed a contract of sale using his name, and then asked the seller to change the contract with the same conditions, but changed its name by adding the letter A at the end. The buyer did not pay, and the seller sued. Five years later, the court decided that the original buyer was not the same as the second (company) with an additional letter A. Is this fraud?
3) In a development in the Larnaca Beach area, a group of buyers (10 out of 80) came up with all sorts of reasons why the General Expenses Administrator had to leave.Eventually, he did, and the same group took on the job, but failed to raise the overall costs, causing the project to wind down. Other buyers got together and decided to sue the new administrative committee for the loss of value of their property. This is a very interesting case and a lesson for those who think they can do better.
4) Once we were involved in a case about a project in Peyia, where the buyer demanded compensation for damage due to dampness. We went to get an expert opinion and a gardener who happened to be there told us that the buyer had turned on the water sprinklers on his wall. He lost, but it took four years to solve the problem.
5) A buyer of an apartment in the Ayios Theodoros area of Paphos claimed that the agent had sold it to him for a price higher than its market value. He even brought the seller’s agent as a witness, who stated that the agreed sale price was the result of negotiations between the buyer and the seller, but in fact the deal was concluded “behind closed doors”. The buyer lost and now has a memo for the apartment, which means that he cannot sell / alienate the property if he does not compensate the agents for the loss of time, costs, etc.
6) They handed over a three-room apartment, then it turned out that eight people live in it. Residents’ failure to pay common house expenses forced the administrative committee to disrupt the water supply, but since this is a public service, hot water is still available for them, and the rest of the tenants pay for it.The Administrative Committee has taken legal action against the owner who ignores the situation, costing thousands of dollars, in the hope that dues will be collected and tenants possibly evicted.
Municipalities’ illegal actions and lack of transparency are a problem not only for the changes we need, but also because they do not respond to public letters. We have repeatedly written about how the municipality of Paralimni leases state land on the beach. After five years of pressure, we were told that the municipality had no right to occupy or rent the property at all.
An earlier court case involved a seafront property in Neapolis, Limassol. The judge decided that because there was a strip of public land (20 feet wide) in front of the property, the property being valued was not considered beach land. The compensation received amounted to 250,000 euros. The owner appealed to the European Court of Justice, which awarded him €2 million in damages.
It’s time to create a common body made up of buyers, tenants, financiers and other stakeholders (including developers) that will act as a pressure group to improve the situation in the real estate sector with hope for a better future.
Antonis Loizou & Associates EPE – Real Estate Appraisers, Real Estate Agents and Real Estate Consultants
