Campaigners in Cyprus are to hold a series of demonstrations aimed at trying to force the banks to reveal details of mortgages taken out by property developers at the heart of the title deeds scandal.
Tens of thousands of owners and real estate investors on the Mediterranean island don’t have legal titles because developers mortgaged the land to get money to build and they claim that they were therefore duped.
If buyers had been informed of the presence of these mortgages then most, if not all, would not have purchased them. They say that lawyers are also to blame for failing to provide a duty of care to their clients by not warning them of the risks of this situation.
The Cyprus government has pledged to sort out the situation but many owners have hit out at how long it is taking. Some have been waiting 20 years for title deeds.
Now the Cyprus Property Action Group (CPAG) is organising a series of demonstrations in efforts to force the banks in Cyprus to disclose details of mortgages taken out by property developers.
Not only are property owners at risk of losing their property if the developer goes bust and can’t pay the mortgage on the land, but the scandal has had a negative on the island’s property market with publicity putting off potential buyers.
The Central Bank has recently accused the banks of attempting to hide the extent of the debt faced by developers who have been hit by the global economic downturn. Owners want to know the current extent of these loans as banks mostly refuse to discuss this, claiming client confidentially.
CPAG is starting the action against banks to press for full disclosure to buyers of developer account balances on loans on their properties. The first demonstration takes place this Friday, November 27 at 10am outside the Bank of Cyprus in Paphos whose chairman Theodoros Aristodemou is also the chairman of Aristo, the largest developer on the island.
‘The banks involved have effectively made these buyers the ultimate guarantors of these mortgages without their permission or even knowledge. Some of these buyers may have personal mortgages from the same bank and have not been notified of the additional risk,’ the group said in a statement.
‘This organised deception by this community of developers, lawyers and bankers has underpinned the whole property industry in Cyprus and is a terrible indictment of the people involved and especially of the successive governments who have failed to protect buyers,’ a spokesman said.
‘Unfortunately, the risks taken are now coming home to roost due to the current global financial crisis. We are also now discovering just how reckless the banks have been with the orgy of lending over the past few years,’ he added.
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