Prime Minister Promises Action on Stealth Mortgages
Prime Minister Ozkan Yorgancioglu met with a Making North Cyprus Better (MNCB) delegation on Friday, and promised them early action on enacting law amendments outlawing Stealth Mortgages and introducing Specific Performance for property contracts.
L to R - Malcolm Mitcheson, Prime Minister Ozkan Yorgancioglu, Taner Erginel, Mustafa Toros, Erdil Nami.
The delegation included leading businessman Mustafa Toros, and MNCB members: former Chief Justice Taner Erginel, former President of the Chamber of Commerce Erdil Nami, and MNCB Joint Secretary Malcolm Mitcheson.
The delegates explained to the Prime Minister that serious injustices towards many home buyers, Expatriate & Cypriot, were still going on. Until these issues were resolved the depressing impact on the Property Market for North European buyers would continue. This problem continues to have a serious effect on the TRNC economy and job opportunities.
The delegates drew the Prime Ministers attention to the current injustice that was due to some Banks, Developers and Landowners exploiting the present law & property process anomalies that allows them to damage home buyers.
On one site that was near completion, in order to obtain a 40,000 GBP bank loan the Developer and the Landowner put forward the bare land, which they had already sold and built villas on, as security. They defaulted on this loan. As the security given covered the entire estate, the Bank repossessed 3 of the guarantor landowner's houses worth around 300,000 GBP. Not content with that, the Bank then went on to claim another 8 expatriate homes worth around 700,000 GBP. So the Bank appears to think, it is entitled to a return of around 1,000,000 GBP worth of homes for its 40,000 GDP loan, leaving the home buyers with nothing.
On another site, 45 buyers had bought villas in good faith. They then discovered that after the developer had contracted to sell to them, he used the same land to secure a Bank Loan - on which he defaulted. The Bank is expecting each house buyer to contribute at least an extra 35,000 GBP to secure their houses or risk having them repossessed and auctioned off.
MNCB contention is that some Developers, Landowners and Banks are exploiting home buying victims due to wrong interpretation of or are using loopholes in the present law. The purpose of the simple amendments proposed is to clarify buyers rights and bring things into line with good practice.
New legislation has already been enacted with better safeguards for new buyers, but the historical tragedies to so many home buyers had been ignored by Government up until now. This is still a big issue here and internationally, by depressing the local economy and being damaging to the TRNC's overseas investment reputation.
The delegates advised the Prime Minister that unless these historical problems were resolved there would be a continuing lack of confidence to invest in TRNC housing by overseas buyers.
The Prime Minister agreed that restoring confidence in the overseas House Buying Market was an essential driver towards economic prosperity in the TRNC. Mr Yorgancioglu agreed to act quickly to help prevent further injustice.
A report detailing the simple law amendments was handed to the Prime Minister by Taner Erginel, who explained in detail how these injustices had occurred. Mr Yorgancioglu agreed to implement these essential changes in Law as quickly as possible and to keep MNCB informed of progress towards this. Taner Erginel agreed to assist any re-drafting and suggested that specialist legal advice should be sought to help.
The changes sought will mean that any mortgage granted on land without the specific approval of contracted property buyers will be considered illegal. The Specific Performance law will ensure that contracts are honoured and make it illegal to mortgage land already under contract. There will be other safeguards too.
These elements are already enshrined in TRNC Equity Law but have been virtually ignored. The changes to the Law envisaged will make the position clear on these points. When enacted these simple changes to the law will enable thousands of home buyers to be free of the threat of repossession or additional Stealth charges.
When Mr Yorgancioglu delivers the promised amendments, in line with Mr Erginels advice, it will be a breakthrough celebrated by many Cypriot & Expatriate home buyers. Mr Yorgancioglu will also have delivered a great boost to restoring the attractiveness of the TRNC property market. North Cyprus will then be well positioned to take advantage of any recovery in the European property market with a resulting increase in job opportunities.
MNCB have conducted a 4 year campaign to get justice for all house buyers which had already resulted in the Government introducing safeguards for new buyers. When implemented this latest assurance from Mr Yorgancioglu to amend the Law will help free thousands of victims from historical injustices.
MNCB produced a DVD to illustrate the problems of Stealth Mortgages, it can be viewed by clicking on this link.
MNCB wish to acknowledge the immense contribution of Marian Stokes of the Home Buyers Pressure Group (HBPG), the late Nigel Watson of the Stop the Blackmail Movement (STBM), and the co-operation of many individuals & representative of victim groups who have given their support to the MNCB campaign. To read more about MNCB go to their website at mncb2011.com
For more information contact
Malcolm Mitcheson, Joint Secretary MNCB on [email protected]
Gultac Ozsan, Joint Secretary on [email protected]