The International Herald Tribune

Published: Thursday, July, 5th, 2007

“Home buyers sour on Northern Cyprus”
By Jon Gorvett

NICOSIA — Dreams of luxury in the Mediterranean sun have gone sour for many Northern Cyprus home buyers, with escalating costs, poor workmanship and shaky legal grounds leaving some disillusioned and angry.

Complaints have been so plentiful that some expatriates organized the Home Buyers Pressure Group and held demonstrations outside the Turkish Cypriot Parliament to draw attention to their plight.

One such home buyer is Derek Jolly, a British citizen who lives in the village of Ozankoy, about five kilometers, or three miles, east of Kyrenia. "In my development there are 20 houses," he said. "All of them have been paid for by people like myself, looking to retire or have a holiday home here.

"Now though, the construction company has gone into liquidation and we have found that the land has been mortgaged by someone else - after we'd paid for it," Jolly said.

Pauline Hayton, a Briton who is living in another new development near the town of Lapta, described similar problems. "We were told that the place was ready and so we shipped all our furniture out here," she said. "When we arrived, there wasn't even a sink in the kitchen, doors or windows.

"We had to keep everything in a container for weeks," Hayton added. "We have to truck in water and for electricity there's just a wire running to a neighbor's house. This whole thing has been so stressful. I've lost weight and my nerves are shot."

"It's very, very frustrating," said Marian Stokes, chairwoman of the home buyers' group. "People come here with a dream and then find they are living with no electricity, no water, piles of rubbish, the total destruction of the environment around them, too. The main problem is that there is no protection of title deeds. This leaves the landowner able to do anything they like."

Northern Cyprus declared its independence in 1983, taking about 250,000 Cypriots and about a third of the island's 9,250 square kilometers, or almost 2.3 million acres, into the Turkish Republic of Northern Cyprus - although only Turkey recognizes it as an independent country.

Cyprus has long been seen as an attractive location for vacation and second homes, especially among Britons, although there also are significant numbers of Germans, Dutch and Scandinavians on the island. But now foreigners who buy property in the north must obtain formal permission from Turkish Cypriot authorities before they are entitled to the deeds. And while the process is often presented as a formality, currently it can take two to three years for the permission documents to be issued. In the meantime, buyers have no legal right to the properties - even though they may have paid for them.

"In the past, the system unfortunately created a lot of victims," Romans Mapolar told members of the home buyers' group in May. But Mapolar, head of the Turkish Cypriot Immovable Property Commission and senior legal advisor to the Turkish Cypriot president, Mehmet Ali Talat, now says that a new real estate law will overcome many of the difficulties.

"The new law obliges the owner to inform the potential buyer of the legal status of the property," he said. "There will also be a reconciliation commission to look into complaints and this will operate proactively and retrospectively."

Statistics about how many foreigners own property in Northern Cyprus or how many are waiting for titles are hard to come by as the politics surrounding the issue are highly charged.

Many locals say that the current horror stories date to 2004, when a referendum was held on a United Nations-sponsored reunification plan and hopes were high that the division would be ending soon.

"At that time, everyone here became a property developer," recalled Ali Ozmen Safa of MedView Homes, a large estate agent and developer in Northern Cyprus. "The butcher, the baker, the candlestick maker. Everyone became a property tycoon. The regulations, laws and so on could not keep up with this. Some of us said at the time this kind of uncontrolled explosion would backfire on all of us."

The surge also saw construction standards and workmanship plummet as inexperienced contractors took a "get rich quick" attitude. "There should have been a more professional approach," Safa said. "The result has been haphazard practices for short-term gains. The rewards from property development have been great, however."

Before 2004, real estate prices and the supply of available properties were stable, Safa recalled. "Then, I'd say property prices went up about 30 to 40 percent in 12 months. The price of land also went up, maybe 200 percent, in the same period," he said.

"A donem of land that went for £2,500 before would go for £20,000. This trend continued into last year, though now it's leveling off again," he said. A donem is a local standard of measurement, the equivalent of about a third of an acre, which would sell for $5,000 before 2004 and almost $40,000 now.

The UN reunification plan was rejected by Greek Cypriots, the 600,000 residents of the Republic of Cyprus in the southern portion of the island, which is recognized around the world as the government of the whole island.

The unsettled situation poses problems for home buyers. "The Turkish region is not recognized by international law," said Yiola Stavraki, a lawyer and a Greek Cypriot. "If the state that sells the properties is not recognized, how can the title deeds it issues be recognized?" She also argues that the Turkish republic does not have the right to transfer the titles to land that was owned by Greek Cypriots before 1974 and notes that buyers of such land could face legal action in the future.

Yet a Turkish Cypriot lawyer, Peyman Erginel, argues that authorities in Northern Cyprus have established a property commission to compensate Greek Cypriots and that "this commission is acting in line with the decision of the European Court of Human Rights on the property issue on Cyprus."

"Now the government is in the process of passing new laws and trying to find a solution to the problems," Erginel continued. "Time will tell whether these laws will be satisfactory or will need improvement. At present, if the purchasers obtain legal advice from an experienced lawyer before purchasing a property, they can minimize the problems they may face." Meanwhile, some residents say there are many positives among all the horror stories. "You do also see many people who have had a fantastic deal here," said Stokes, chairwoman of the home buyers' group. "This is a wonderful, beautiful island and people can have no problems at all. It's not all bad news, but the thing is, you just don't know how your own story will turn out."