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ANNOUNCEMENT BY AKFINANS VICTIMS

Akfinans Bank Ltd. has been trying to acquire the homes of 9 homebuyers at Karşıyaka. The homebuyers tried to stop the Bank, but unfortunately the illegal efforts of the Bank continued.  The homebuyers had no other alternative and applied to our law firm (Boysan Boyra law firm) for legal help.

After considering the facts and relevant laws we decided to act on behalf of the homebuyers and sued the Akfinans Bank Ltd. both at TRNC Courts and European Court of Human Rights at Strasburg. The facts stated in these cases are not related to an issue between the Bank and homebuyers only, but concern everyone living in TRNC. Therefore we felt obliged to announce them to public.

In our actions we claimed that the Bank does not have any legal right to acquire the homes of our clients. We also claimed that any agreement made in the absence of our clients and any decision given by any authority without them being informed is null and void. We declared that our clients have always been and are still owners of their homes. We further claimed that Akfinans Bank caused great suffering and damage to our clients therefore they have to compensate our clients.

In normal circumstances a Bank would be embarrassed with these Court actions and wait for the conclusion of the Court cases. It would also be reasonable for a Bank to ask for an international legal opinion about the probable outcome of our Human Rights Court case. Unfortunately Akfinans Bank instead of searching for legal opinion and waiting for Courts’ decisions escalated its efforts against our clients. The Bank tried to throw our clients out of their homes before any Courts’ decision.  Perhaps the Bank believed that these elderly people once thrown out into the street will die soon and their homes will be grabbed automatically without any trial.

The homebuyers at Kulaksız have been in possession of their homes since 2004. The husband of one of the homebuyers died a year ago and she had to go toEngland. The Bank tried to use this opportunity, changed the locks of her house and moved in. The terrifying point was that the Bank tried to do this secretly. The neighbours tried to stop the Bank’s employees and took pictures of them while changing the locks. The neighbours were going to produce these pictures as evidence at Court.  But the Bank employees tried to stop this. The Bank showed its intention that it will not allow any Court to learn the facts and give a fair judgement.

Now the Bank’s latest illegal aggression is its effort to stop press publication about Kulaksız affair. The Bank is trying to terrorise the press as well and stop the press from reporting   about Kulaksız cases. The Bank is trying to get an injunction from the Court to stop the press reporting. This is something unheard of in the world. This is an unbelievable breach of human rights. The Bank is trying to interfere with the Constitutional rights of free press, freedom of expression and is trying to turn life into a nightmare in TRNC. They believe that by preventing press from reporting they will be able to terrorise the homebuyers and achieve their aims without any problem.

The actions of Akfinans Bank emanated from a dispute between The Bank and the homebuyers but it has escalated to a problem between the Bank and the whole Turkish Cypriot People.  It has caused great damage to the economy of the TRNC and if not stopped will cause even more in future.  Therefore we would like to invite every TRNC citizen to learn more about Kulaksız cases.

Homebuyers managed to get a legal opinion from reliable international law firms. We are going to explain the legal arguments of the Bank and then let you know what the   international legal opinion is on the subject. Later you will be able make your own opinion about the issue. We hope that you will form your free independent opinion and appreciate that this is a very important case not only for homebuyers but almost everyone living in TRNC.

Question 1.

The Bank argues that they are the owners of the houses at Karşıyaka.

Can we accept this argument?

International legal opinion:

The houses were built for homebuyers by Kulaksız Construction Ltd. according the contracts signed between Kulaksız Construction Ltd and the homebuyers. Homebuyers did nothing against the laws of TRNC. They followed all conditions of the contracts. They paid their sale prices. In 2004 the possession of the houses were handed over to them. They have been living in their homes since 2005. The title deeds where not issued in time because of slow administration in TRNC and the homebuyers cannot be blamed for this. Homebuyers did not consent to a mortgage on the land. Akfinans Bank Ltd. loaned money to Kulaks Construction Ltd. and mortgaged the land without knowledge of the home buyers. The mortgage is a contract between Akfinans Bank Ltd. and Kulaksız Construction Ltd. According the basic principle of law two people cannot make an agreement between themselves and interfere with the rights of other people. Akfinans Bank Ltd. is presuming that they can include the rights of other people in the agreement they made with the Construction Company. They claim that they may mortgage a land declaring that it is bare land and grab everything over it. Whereas according to the laws all over the world this is a fraudulent act. Such a mortgage is not valid. The houses of the home buyers cannot be taken away from them without their consent. This is the rule of law in all countries and TRNC is not an exemption.

Don’t you think that the international legal argument is the correct one?

Question 2.

The Bank argues that the houses over the land could not be separated from the land. Therefore the Bank was entitled to sell the land together with the houses and acquire them.

Can we accept this argument?

International legal opinion:

The view that when an immovable property is mortgaged, everything on the land is included in the mortgage is not a valid argument. Such an unfair argument has never been accepted by any Court anywhere in the world. It is against the basic principles of the law. It is against the laws of TRNC also. According  to Section 21, of 11/78  Mortgage Law of TRNC the creditor before mortgaging the property is obliged to search and see whether other people have any right on the mortgaged property or not. The law obligates the creditor to name even a tenant residing on the property. This obligation of the law is not for decorative purposes. Unfortunately the Bank failed to mention that the homebuyer’s homes exist on the land. They did not ask for the consent of the homebuyers. Therefore the mortgage contract may not include the homes of the homebuyers.

Don’t you think that the international legal argument is the correct one?

Question 3.

The Bank argues that the rules of Mortgage Law can be ignored. They believe that they do not have any obligation to search and declare whether other people have right on the property or not. If the Bank declares that it is bare land it should be presumed to be bare land and every house on it can be absorbed.

Can we accept this argument?

International legal opinion:

The laws cannot be ignored by Banks or by any authority. According to the clear wording of the 11/78 Mortgage Law of TRNC the Bank is obligated to search and declare any right on the property. If the Bank does not follow the rule of law this is the Banks own problem. A Bank or anyone else cannot benefit from its faults. If the law obligates the creditor to mention the names of people owning houses on the property this is not a simple formality. This means that the rights of other people on the property should be respected. It also means that homebuyer’s contracts remain valid and any attempt to sell the land together with the houses is illegal. The Bank may take over what is owned by the debtor, but nothing more.

Similarly if a Bank mortgages a land but allows the landowner to build houses on it and sell them, the contracts of sale are binding for the Bank as well. If the Bank for one reason or another takes over the rights of the Contractor this means that it has replaced itself with the Contractor and will be obliged to fulfil the conditions of the contracts. So it is the duty of the Bank to obtain the title deeds of the houses as the Contractor was obliged to do. Later the Bank has to transfer the title deeds to the homebuyers. After that happens what is left can be owned by the Bank.

Don’t you think that the international legal argument is the correct one?

Question 4.

The Bank argues that Kulaksız Construction Ltd. borrowed £41,600 from the Bank. They agreed that this debt will bear %250(two hundred and fifty per cent) interest. In the TRNC it is free to agree on the rate of interests. Kulaksız Construction Ltd. did not pay its debt in time. They were obliged to pay the whole amount with interest. The Bank could recover the amount payable from the mortgaged land. Therefore any house on the property also could be acquired.

Can we accept this argument?

International legal opinion:

No right can be extended to the degree of robbery. The interest rates of Banks all over the world are limited. InEuropeit is about 5% per cent (five per cent) per annum. If a bank claims more than 6 or 7 per cent, the Governments will consider that the transaction is not fair, an offence against the consumer and take measures to protect people. If a Bank asks % 250 interest it would be considered a robbery and a crime. Measures would be taken against such a Bank.

A debt with %250 interest is unheard of in the world. It amounts to robbery in the TRNC also. Here the Bank loaned £41,600 with interest, mortgaged a land declaring it as bare land and is trying to acquire 9 homes over that land that is worth more than £1 Million. There is not any country in the world that would allow this. In all countries of the world this would be called larceny.

Don’t you think that the international legal argument is the correct one?

Question 5.

The Bank argues that when the debt of the Contractor was not paid in time they sued the Contractor and a judgment for the sale of the property was given by the Court. The judgement was given by the consent of both the Bank and Contractor and had %80 compound interest on it. So there was nothing illegal.

Can we accept this argument?

International legal opinion:

After judgement, %80(eighty per cent) compound interest to be capitalised every quarter is more or less same as %250 (two hundred and fifty per cent) interest. In England the maximum allowed for judgement debt interest is %8 (eight per cent) per annum. Eighty per cent compound interest per quarter is a figure that amounts to robbery also. Two people may go to Court and agree about anything. But people have to agree and give away something that belongs to them. They cannot make an agreement to deprive other people from their rights. If two people go to Court make an agreement between themselves to deprive other people from their rights without their knowledge, this is considered a fraudulent act. This kind of consent judgment is considered a fraudulent judgment in all countries of the world.

The judgment between Akfinans Bank and the Contractor was given upon an agreement between themselves. They obtained the judgement without explaining all the facts to the Court. TRNC laws about fraud are not different from the laws in any other country. The homebuyers sued the Bank and asked for the annulment of the judgment given in their absence. They have very strong grounds to win the case. Therefore everyone concerned should wait for the result of the Court case initiated by the homebuyers.

Don’t you think that the international legal argument is the correct one?

Question 6.

The Bank argues that even if the mortgage contract was illegal and even if the consent judgment was fraudulent the auction was transparent and carried out according to the direction of the District Lands Office. Therefore the Bank bought the houses legally.

Can we accept this argument?

International legal opinion:

District Land Offices direction was for the sale of the bare land only. Legally the houses on the land could not be added to the sale. Therefore the Bank could not become the owner of the houses. Homebuyers sued the Bank in the TRNC Courts and at theHuman Rights Courtat Strasburg. The Bank realising that they are going to lose the cases is trying to terrorise the homebuyers and pervert the normal Course of Justice. The attempts to take over the houses without waiting for the result of the Court cases are a clear violation of law and human rights.

Don’t you think that the international legal argument is the correct one?

Question 7.

The Bank argues that when the property was mortgaged they knew nothing about the houses on the land?

Can we accept this argument?

International legal opinion:

The Bank was obliged to search and find out the rights of other people on the property and declare them to the District Lands Office. In law no one can expect other people to suffer from his own fault. Furthermore the facts of the case show that the Bank knew about the existence of the houses on the property. There are written documents to prove this. The Bank knew about the houses and had an intention to grab them without the knowledge of the homebuyers. There is a clear proof that the transaction was fraudulent.

Don’t you think that the international legal argument is the correct one?

Question 8.

The Bank argues that mortgaging a property and absorbing the rights of other people on the property is an acceptable practice in Cyprus. The Bank believes that an easy way of larceny has been discovered in the TRNC. You may benefit from the fact that it takes a long time to obtain title deeds in the TRNC. You may agree with the land owner, you may mortgage the land, pretending that there was nothing built on it; you may get an order from the Court hiding the facts from the Court and without informing the house owners. You may get an order from District Lands Office declaring that it is only bare land. This way you can grab everyone else’s houses on the land.

Can we accept this argument?

International legal opinion:

The Banks opinion that an indirect way of larceny is possible in TRNC is not correct. No one can grab the rights of other people. An indirect way of larceny is not allowed in any country in the world. It is against the clear sections of the 11/78 Mortgage Law in TRNC. It is against basic principles of law. It is against the human rights principles stated in TRNC Constitution. It is against the European Convention on Human Rights.

Don’t you think that the international legal argument is the correct one?

Question 9.

The Bank does not believe that the home buyers have initiated any action against them at the European Court of Human Rights at Strasburg. They argue that all local remedies should be exhausted before one may apply to the European Court of Human Rights and hope that the homebuyers will be thrown out of their homes before they find a chance to go to the Court.

Do you agree with this view?

International legal opinion:

Normally one has to exhaust all local remedies before going to the European Court of Human Rights, but in exceptional circumstances it is possible. Boysan Boyra law firm realised that it will be too late to wait for a conclusion at the local Courts, and claimed that the Kulaksız affair is one of the exceptional cases and have directly applied to The European Court of Human Rights. The Court agreed to deal with the case. The application number was given (Application No.75417/10). Soon a hearing date will also be declared.

Experts on human rights law insist that the degree of the violation of human rights by the Akfinans Bank will shock the judges of the European Court of Human Rights. The Banks arguments themselves can be considered an assault on human dignity and Courts authority.

Under these circumstances it is possible to ask for an interim order also. However the homebuyers are reluctant to apply for such an order, because they know that this will create a devastating blow to TRNC and its economy. This is exactly what the home buyers are trying to avoid. They wish to protect and help the Turkish Cypriot people not cause harm them. Basically they are trying to help TRNC Government and Akfinans Bank also. This is the reason why they are trying to explain the law and the facts of Kulaksız affair to everyone. They hope that the realities will be understood by everyone living inNorth Cyprus. The Bank will come to its senses and stop this illegal assault. If not, the TRNC Government orTurkeywill step in and stop the Bank before further damage is caused to the country.

Don’t you think that the international legal argument is the correct one?

Question 10.

Akfinans Bank argues that no section of the European Convention on Human Rights has been violated, so there is nothing to be discussed at the European Court of Human Rights at Strasburg.

Can we agree with this view?

International legal opinion:

The main sections of the European Convention on Human Rights have been violated very seriously by Akfinans Bank. The violations were done in such a manner and to such a degree that it will create a shock at the European Court of Human Rights. All human rights experts agree that the Court will not hesitate in coming to a conclusion against the Bank. Legal explanation of these violations can be seen in Boysan Boyra law firms Application to the Court (Application No.75417/10).

When forming an opinion one must remember that the homebuyers are elderly retired people, the TRNC Government declared through various agencies that they would welcome tourists to buy holiday homes in TRNC. Annan plan also had conditions agreeable with this. The homebuyers put together all their means that they have saved throughout  their lives, they sold their properties in UK , they came and bought a new home in TRNC, they are trying to live a peaceful life in their remaining days of life. They have done nothing against the laws of TRNC; they have done nothing against their contracts of purchase; yet the Bank by fraudulent actions is trying to rob them from everything they have got and throw them out into the street to live without any home. This is an unheard of violation of law, an unprecedented breach of human rights that the Court will be obliged to act promptly and save the homebuyers.

Don’t you think that the international legal argument is the correct one?

Question 11.

The Bank believes that even if the European Court of Human Right’s decision is in favour the Homebuyers,Turkey will be found responsible and will pay the compensation. In the end the houses of the homebuyers will remain in the hands of the Bank and the Bank will lose nothing.

Can we agree with this view?

International legal opinion:

Turkey does not have any fault in this matter. Turkey is sued, because this is required by the European Court of Human Rights. However one has to realise that no country in the world may allow larceny to take place in its area of responsibility, pay compensation for the stolen property and tolerate the theft to continue. The Human Rights’ Court will make sure that Governments will take measures against the Bank.  Both the Governments of Turkey and TRNC will have no other alternative but penalise the Bank and/ or close it.

Don’t you think that the international legal argument is the correct one?

Question 12.

The Bank argues that the issue between the Bank and homebuyers is a private matter. This is not a case that may concern other people. Therefore the TRNC Government may not interfere to solve the problem.

Can we agree with this view?

The reply of the Akfinans victims:

Kulaksız affair is not an issue between The Bank and the Homebuyers only. It is an issue that concerns everyone living inNorthern Cyprus. To be able to understand the issue one has to learn more about the economic realities of TRNC.

During the last few decades retired people in Europe have started buying holiday homes in warmer countries. They wished to spend the rest of their lives in a better climate. This tendency turned into a special kind of tourism in the world. This may be called “home buying tourism”. Later it was discovered that home buying tourism is very profitable; far more profitable compared with other kinds of tourism.

It is not difficult to understand the reasons why home buying tourism is more profitable. When someone goes to a country for a summer holiday and stays at a hotel, he usually spends what he has saved during a year. But when he decides to buy a home in that country he spends the earnings he saved during his whole life. Usually he sells everything he owns in his original country, and brings all his wealth to his new home. So there is a great difference between the money spent in home buying tourism and other kinds of tourism.

Home buying tourism proved to be very reliable also. While other kinds of tourism are subject to competition and affected by constant change of circumstances home buying tourism continues pouring money into a country under all circumstances.  

Mediterranean countries likeSpain,France or Italy were quick to catch up with this reality. They made a great effort to encourage home buying tourism. This is how they managed to balance their economy.Turkeyis also aware of the benefits of home buying tourism and is trying to remove all impediments before it.

Home buying tourism has other advantages also. Unlike other kinds of tourism it protects the environment. Two storey homes with gardens add beauty to a country and enrich the environment. Karaman (Karmi) village is a good example for this. If properly applied the whole TRNC could become like Karaman an exceptionally beautiful country to live in.

In other kinds of tourism the profit is usually collected in the pockets of a few people. Sometimes the profit remains out of the country. Whereas in home buying tourism wealth is spread to everyone. This is why in the years 2004-2007 the welfare of the whole community has increased inNorth Cyprus. Experts state that more than 50 sections of economy benefited from the development.

When analysed it would be discovered that the economic development that took place between years 2004 and 2007 in North Cyprus was due to home buying tourism only. It was calculated that about 3 billion dollars came to the country.  Almost every person living here benefited from this development. If the development continued TRNC was going to become one of the most prosperous countries of the world.

Unfortunately the importance of home buying tourism was not realised by many. They did not understand how and wherefrom the prosperity came. The TRNC Government did not take necessary measures to protect the development. Later Akfinans Bank claimed that the houses of the home buyers can be taken away from them without their fault and even without their knowledge. This naturally terrified people and brought a quick end to the fast growing economy.

Akfinans Bank claims that houses of the homebuyers can be grabbed fraudulently and laws of TRNC allow this to happen. How home buying tourism my develop when such an idea exist in the minds of some people? Will a sensible person throw his wealth and future into a country where his contracts are going to be considered invalid and ineffective? This is why the homebuyers who came happily to TRNC started leaving in agony. Turkish Cypriot people who got prosperous during the years 2004-2007 started to become poor again. This is the tragedy ofNorth Cyprus.

When a tragedy harms the whole community cannot be considered an issue between two people. Kulaksız affair is not an issue between Akfinans Bank and the homebuyers only. It is an issue between Akfinans Bank and the whole people of North Cyprus. Due to the actions and claims of the Bank, TRNC got into an economic crisis. Half of the wealth of each Turkish Cypriot person has been taken away from him. A feeling of hopelessness prevailed in the country.

Now experts of economy are searching for new means and ways to save the economy. However when we analyse their views we discover that all suggestions put forward will not produce the expected result, because any program other than home buying tourism will bring little wealth to the country. Home buying tourism is a gold mine when compared with other kinds of tourism. Other ways of development are only risky programs and even when successful their contribution to the welfare of the people will be negligible.

In the past home buying tourism created great prosperity inNorth Cyprus. This truth must be realised and measures should be taken to re establish it.

The homebuyers hope the Government will understand that these arguments are related to everyone’s welfare and future life in TRNC.

They would like to invite the TRNC Government to realise that their passive attitude until now encouraged illegality in TRNC. Therefore they should step in and declare that:

1.     The home buying tourism is beneficial to North Cyprus and is supported by the TRNC Government.

2.     Laws related to home buying in TRNC, are same as the laws elsewhere in the world and they are going to be interpreted and implemented in the same way. Therefore a contract signed by a homebuyer cannot be disregarded by arrangements made without his knowledge.

3.     11/78 Mortgage Law is valid and no bank or authority may ignore it. Therefore a bank putting a mortgage on a property is obliged to search and declare the rights of other people on the property to the Land Registry Office. The law requires that the contracts of sale will remain valid after the mortgage. The rights of the purchasers cannot be wiped out and the bank is obliged to fulfil the conditions of the purchases after the mortgage.

4.     According the 11/78, Mortgage Law if a bank puts mortgage on bare land knowing that houses are going to be built and sold on it, those sales are binding on the bank and the bank is obliged to fulfil the conditions of the contracts.

5.     The TRNC Government is the guarantor of the rights of the purchasers who acted in good faith. 

Our clients believe that if the above declarations are made and followed by the TRNC Government the great development during the years of 2004-2007 will be revived and Turkish Cypriot people will become one of the most prosperous peoples of the world.

Boysan Boyra Law Firm