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BY PROF. ANDONIS VASSILIADES
Title Deeds, Building and Planning Regulations and Consents: A Sinister Combination
The solution to the problem of title deeds is simple: disentangle it from the myriad of rules and regulations regarding matters of building and planning regulations. Why should ownership of property be linked to matters that have absolutely nothing to do with the right of ownership of any asset? Whether you are buying a ramshackle of a building, a rock, a disused garage or a broken down car, and you are entitled to claim it as yours, that choice ought to be yours. If that property proves to be unworthy of use, or violates some safety regulation, or has unauthorised extensions or modifications, it is a matter to be dealt with under the relevant laws. But it should not be about refusing or challenging ownership or subjecting it to a crude classification of a Definitive (Complete) or Incomplete or Restricted Title Deed. It is simply absurd. The government confuses the right of property ownership with administrative, health, safety, building and planning issues, amongst others.
Economic and Political Expediency and a Model for Conflict
Most of the measures and procedural means, e.g. applications, planning, building, fees, fines, certificate of approval, committee decisions, classification and registration of properties under the new title deeds, challenges, court proceedings, legal fees, etc. have to be paid for. The only beneficiaries out of the proposals if they are legislated will be the developers, the banks, legal practitioners and, for a while, the state. By and large the proposals shed responsibility away from the state in protecting the purchasers and onto the judicial system, special committees and bureaucratic procedures. The government simply abdicates its own responsibilities. Instead of being bold enough to enact legislation that clearly and unequivocally states and protects the rights of buyers, it engineers convenient ways to wash its hands of the matter. In consequence, the amended laws, rather than succeeding in resolving the problem of title deeds and establishing better community relations, will create more disputes and unrest between the main active participants – vendors, buyers, authorities and banks. Even the much trumpeted use of “specific performance” which the government considers it to be the tool via which purchasers can attain their rights, though useful, puts the onus entirely on purchasers to fight for their rights when in fact those rights ought to have been bestowed on them at the time of purchase without ever anyone needing to use specific performance to redress the imbalance.
Specific Performance, Developers and Banks
In the context of the confused and assumingly interrelated laws and their amendments, the Sale of Land (Specific Performance) Law, is useful and relevant to purchasers in seeking out justice. In particular, the extensions given by courts for the execution of specific performance are welcomed. However, there is nothing said about the relationship between a developer and a bank and the clearance of debts or, if the debts are allowed to remain, how a bank would release the collateral (i.e. the property) and allow for the transfer of title deeds to purchasers. It is very naïve of the government to rely on the good will of developers and the banks and the Cypriot norm to find a compromise to assist the buyer. Banks are not charitable organisations and even charitable organisations must have some income from somewhere and their assets need to be protected. In fact, such matters over outstanding debts are normally resolved only when purchasers are willing to pay off the debts of developers to protect their holdings from receivership. Even after the payment of developers’ debts the road to recovery and taking over ownership of their asset is riddled with innumerable other obstacles.
The Forgotten “Shareholders”
The issue of specific performance and amendments to the law do not account for the particular problem of co-ownership and “shares” in a building or a plot of land onto which buildings have been erected. Many purchasers have been sold properties by being given a share of ownership (normally for mortgage purposes). But the complications that arise for those with such shares of co-ownership are hard to describe. The most difficult stumbling block in applying and receiving title deeds in such cases is that one is not now dealing with a single developer or seller but with a number (and sometimes many) co-owners whose signature and consent is required for matters to proceed. The proposals do not consider nor do they provide any indication of how the plight of these people may be addressed.
Contradictory and Confusing Regulations and Cronyism
The proposals are an amalgamation of diverse and contradictory parts that do not synchronize and do not act in concert as a single entity for a single purpose. For example, under the Regulation of Streets & Buildings Law the strict procedure of permits and consent is watered down by “exemptions”. The certificate of approval is presented throughout as a main requirement for acquisition, entry, classification of title deed, etc. and can only be granted if the right planning and building consent has been given in the first place. Interestingly, the same certificate of approval, in the absence of such consent, can also act as a building and planning consent and can be issued independently to whether there is or there isn’t a formal building or planning permit and consent. Does this not invite confusion and illegal building activities? The chaotic nature of the proposals, the exemptions and plentiful contradictions, invite diverse legal interpretations, confusion, illegal activity, and backstage scenarios (informal and unregulated means of justice) based on patronage and cronyism – which in the Cypriot dialect is normally referred to as “Ta Mesa”.
Special Committees, Title Deeds and the Consequences of Bureaucratic Overloading
The establishment of committees to examine and rule on matters relating to the Town Planning & Land Survey Law and the Regulation of Streets & Buildings Law regarding unauthorised work, lack of permits and consent and issuing a certificate of approval, etc. will generate a tremendous amount of applications by those concerned. If this is also linked to the process of upgrading or downgrading title deeds under the proposed changes to the Immovable Property (Possession, Registration and Valuation) Law, the committees and the Land Registry may prove to be, yet again, a good income generating source for the government as thousands of applications will be launched – but with a problem. There are around 130,000 current cases of properties without title deeds and many of those have to do with breaches of building and planning consent and the lack of a certificate of approval. In addition, just about one in three buildings (a conservative estimate) is probably in breach of such permits and consent via various illicit extensions such as garages, carports, pergolas, porches, conservatories or in the case of many Cypriots, unauthorised and unregistered buildings (if not mansions) erected on land they own. Assuming all these thousands of dwellings may have to be registered and re-registered under one of the new categories of title deeds created by the amended Immovable Property (Possession, Registration and Valuation) Law, a serious question needs to be asked: how will the committees or the Land Registry, or courts in general, cope with such an avalanche of new work? How would they ever meet deadlines when at the moment, even before the implementation of the new amendments, there is a backlog of unfinished applications for title deeds stretching back ten years? In fact, there seems to be a backlog of, on average, 72,000 applications for various building permits in all districts each year. In such circumstances, when everything is under pressure, there is again the hidden prospect and risk of cronyism becoming the rule of the day. The system may function only under the motto of whom you know and who is prepared to pay something extra for “fast-tracking” applications and favourable decisions.
Title Deeds, Categories and the Creation of Housing (Social) Classes
The categorisation and registration of properties under either Definitive (Complete), or Incomplete or Restricted Title Deeds will introduce serious economic and social inequalities and injustices in the market. Their implementation will, at a stroke, create three distinct social classes (a caste system) of homeowners: one category (Definitive Title Deeds) that bestows privileges and a high status and two classes (Incomplete and Restricted Title Deeds) that establish a bigger and broader class of “untouchables”. Those homeowners who fall in the latter category, will see the value of their asset diminish in social and economic terms. They will be shunned by prospective buyers and banks and, in all, they will experience financial ruin and social exclusion.
Title Deeds and Retrospective Upgrading or Downgrading
The creation of a scale of title deeds is a worrying feature on its own but what is also worrying in the normal process of enacting new laws, is that any property at any time can be re-graded upwards or downwards. This power to act retrospectively and to change the positioning of any property including properties that currently have full title deeds (which may mean being downgraded to Incomplete or worse still Restricted Title Deeds) will open a Pandora’s Box. It will prove a socially divisive and disruptive measure that will introduce further confusion and injustice to an already confused and unjust system. Normally, legislation is built on the principle of what is and what ought to be as from the date of implementation of the new rules. It is always a very regressive and dangerous precedent for legislation to put under its ambit the past and its bygone social relations. Such retrospective powers are bland instruments that maim and do not heal, pull asunder rather than bind together, divide rather than reconcile and cause broader conflict. Furthermore, they collapse, on application, under their own weight. If most properties are somewhat adulterated by some means or other, then half of Cyprus will end up with Incomplete or Restrictive Title Deeds.
Conclusion
The new proposals are less about receiving ownership and title deeds and more about political and economic expediency. They are hype and much of the hype is of little practical relevance to resolving the problem of title deeds. They are not progressive but regressive. They are about creating new and irresponsible social dimensions which will be dictated by what kind of title deeds people have and the social category they are placed in which will determine their positive or negative position in the economic structure. These proposals and the resultant consequences on property ownership will lead to a disastrous effect on the economy by exacerbating the current instability in the construction industry and property market. Deep down, what should be learned from these proposals is that no social or legal prosthetics and general plastic surgery can alter or camouflage the fact that the body underneath – the basic legal structure and framework – is rotten. If indeed, as the government suggests, the proposals were prepared and vetted by experts, our bold suggestion is that such experts should be sacked for incompetence and the government should take stock. It should shelve the proposals and start all over again to avert a national social and economic disaster. Otherwise, suffer the little children or should we say, suffer the purchasers, vendors and with them poor little Cyprus.
Dr. Andonis Vassiliades is Professor of Law, Criminology & Penal Justice.
[email protected]
© Prof. Andonis Vassiliades 2009. This is an edited version of an article that first appeared in In Touch Magazine, 2009, issue 36.
