Prime Minister Promises Action on Stealth Mortgages

Following on from the recent Kulaksiz 5 Court Judgement that found a Stealth Mortgage fraudulent, talks have been progressing with the Prime Minister’s Office on amendments to Contract and Property Law to clarify the legal position on these issues.

(Pictured L to R – Malcolm Mitcheson, Prime Minister Ozkan Yorgancioglu, Taner Erginel, Mustafa Toros, Erdil Nami)

The following is a statement released by Making North Cyprus Better (MNCB):

Prime Minister Ozkan Yorgancioglu met with a Making North Cyprus Better (MNCB) delegation recently, and promised them early action on enacting law amendments outlawing Stealth Mortgages and introducing Specific Performance for property contracts.

Included in the delegation were 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.

Mr Yorgancioglu was advised 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.

The delegates drew Mr Yorgancioglu’s 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.

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.

MNCB’s contention is that some Developers, Landowners and Banks are exploiting home buying victims due to wrong interpretation of, or 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.

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. These elements are already enshrined in TRNC Mortgage & 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 Erginel’s 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.

For more information contact:

Malcolm Mitcheson – [email protected]

Gultac Ozsan – [email protected]

Editor’s Note

The opinions, advice or proposals within the article are purely those of the author and do not, in any way, represent those of LGC News.

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