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By Antonis Loizou F.R.I.C.S. – Antonis Loizou & Associates Ltd – Real Estate Valuers & Estate Agents
The new Minister of Interior of Cyprus has announced that he is introducing a “one stop shop” which will deal with large-scale real estate investments (over EUR 5.0 mln). This office will have a project manager, whose responsibility is to keep a close watch and follow up on the procedures regarding planning applications and issue of permits.
This need came about after numerous projects of a size seem to have extensive delays and difficulties with the existing procedures, whereas the frustration of large foreign investors who have been lured to invest in
Will this new approach to real estate investment procedure have the expected results, however? Allow me to have my doubts.
This new office will be managed by the same civil servants that are already dealing with the applications. It is a matter of attitude and efficiency and by changing one’s name will not help matters. In an interview I had with the I.M.F. delegation that reviewed the
· Town Planning Permits
To be prepared in the form of a recommendation, duly reasoned, to the Governmental Planning Office. The applications to be examined by specialised private planning firms of at least ten years’ experience. The firms to have a professional indemnity insurance cover of at least EUR 100,000 per project and in the event of error or otherwise the Government to have the right to confiscate the guarantee and cancel the firms license to operate.
· Building Permits
No need to have the structural survey checked by the Government, since the initial study is already prepared by a qualified engineer. Again similar years of experience and guarantees as above.
· Infrastructure
To be prepared in principle by the Planning Office/P.W.D. and details to be left to individual consultants in private practice – same guarantees.
· Environmental Studies
So far, private firms cannot be said to be up to it, more so looking after their client’s interest. We still believe that such issues should be studied by private environmental firms, but to be under strict quality control – as above.
· Lands Office matters
To the extent possible this part of the work (e.g. exchange of land, estimate of the rental market, market value, 1.1.2013, tax issues, etc), to be undertaken by two independent valuation firms for the same subject. The reason for this (two firms) is that valuations are somewhat subjective and it is better to have two opinions – again subject to the Lands Office spot checks and the securities offered as above.
The Minister has set out time limits for reply for each application stage by the authorities. He has suggested that planning permits must be examined within 12 months, reduced to 6 months as time passes. The environmental studies to be completed within 3 months, etc. Needless to point out these time frames are already in force, but not kept at all. For this reason I suggest that if applications are delayed over the time limits, compensation should be sought from the Government and which should go down to the individual/civil servant(s) who has caused it.
In a country where the President of the Republic had to intervene in order for the applicant to get a response (see Yeroskipou project, the 1.5 year delay for a reply for the Troodos venture park, etc), I have my doubts. The Minister of Interior means well, but unless drastic measures, including compensation, are introduced, the situation will not improve.
Can our proposal happen? I doubt it since the civil servants union and (surprise-surprise) even some private firms will object. As an example is that privatisation of planning permits already exist for small projects, but the architects do not apply this, since they either do not know how to go about it or prefer to play it safe through the Government Departments.
Let’s keep our fingers crossed and we will come back to you on the developments.
