The cabinet has approved a bill addressing the problem of thousands of home buyers trapped without title deeds, Interior Minister Socratis Hasikos said on Wednesday.

The bill covers thousands of people who paid for their home but could not get a title deed either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

“All these people are secured with this bill and will be able to ensure ownership of the property with a title deed,” the minister said. From then on they can sell, transfer, or mortgage the property.

The bill authorises the head of the land registry department to transfer and cancel mortgages, among others, depending on the case and under certain conditions.

Developers’ land and buildings are counted as assets that need to be offset against their debt to banks, which gives lenders a claim on people’s properties that had been mortgaged by developers.

Thousands have been left without deeds as a result.

Hasikos said the bill also covered those who paid a large chunk of the price, 80 per cent or 90 per cent. If they have the rest of the money they can deposit it in a special account through the land registry and secure their title, he said.

The difference with a bill passed by parliament and rejected by the president recently, was that parliament simply ensured use of the property by the ‘trapped’ owner while the government legislation ensures ownership, Hasikos said.

Under the terms of its bailout, Cyprus has set up a task force “on registered, but untitled, land sales contracts” to study the matter.

It is understood, based on previous comments by government sources, that the banks could be taking a hit.

Last month, Hasikos said “banks must finally take responsibility for their actions. When they were giving out loans to developers or contractors to build an apartment bloc, they ought to have checked that this money was being used for that specific project and not for something else.”

“The buyers,” he added, “are not at all responsible and they must be protected.”

A government source asked at the time about the possible impact on banks said the Central Bank did not have a problem with it.

An official statement outlined the main provisions of the bill.

“With the proposed changes, for the purpose of issuing ownership titles to the benefit of the entrapped buyer, authority is granted to the director of the land registry department to exempt, eliminate, transfer, cancel mortgages and or other encumbrances, depending on the case and under conditions,” a written statement from the ministry said.

Specifically, the sale price must have been paid in full by the buyer. In case of an outstanding amount, the buyer can deposit it in a special temporary account managed by the land registry director.

The director will have the power to transfer mortgages to other property belonging to the seller. If no such property is available, the director can transfer the encumbrances on individuals who guaranteed the seller’s obligations and, at the time the agreement was signed, had acted as board members, or owned over 10 per cent of the seller’s share capital.

The bill concerns the seller’s obligations to banks and the state.

To benefit from these provisions a sales contract for the property or part thereof, must have been submitted to the land registry department by December 31, 2014, the statement said.

The bill applies to all immovable property, plots and buildings.

In March, parliament passed a bill indefinitely banning repossession of houses whose owners have no title deeds, even though they may have paid for them in full, because developers had already taken out loans on those properties which they cannot repay.

MPs basically changed a clause in the main foreclosures law, which had exempted this category of properties from repossession until April 30.

According to the provision, such properties will be exempted provided the buyers paid at least 80 per cent of the sale price or have fully complied with their contractual obligations towards the seller.

But the president refused to sign the bill into law and sent it back to parliament, arguing that it was unconstitutional and created ‘a general and permanent shield’, not for vulnerable groups, but a number of sellers and land developers.

Parliament accepted the president’s argument and changed ‘indefinite’ to ‘July 10.’

By George Psyllides

THE BILL governing the operation of casinos is to be put to a vote at the plenum this coming Thursday, after MPs made some minor modifications to it on Tuesday.

The casino facilities may be located on the beachfront or extend into the sea, provided however that this is not entirely state land.

The restriction on the use of state land on or near the coast was inserted into the bill by MPs.

The bill provides that, where the casinos are located inland, the use of state land is limited to 5 per cent of the total area. However, in the original draft, this restriction was waived for the seafront.

Lawmakers on Tuesday decided to strike this seafront exemption, because keeping it in might have steered investors toward certain locations rather than others.

The bill allows 5 per cent of the casino development to lie on state land, in order not to create unnecessary complications. For example, the selected location might enclose a small tract that is state land. So a total prohibition on state land might have scuppered developers’ plans.

The government’s initial plan was for the creation of a casino resort and four regional ‘satellite’ establishments, which would only house slot-machines.

The bill has now been modified, giving investors an alternative – instead of four satellite casinos with slot machines only, they can opt to build one regional establishment with up to five table games and 50 slot machines, in addition to the main casino resort.

Other last-minute changes include extending the exclusivity period for the successful bidder in case of delays beyond 90 days in securing the relevant permits.

Also inserted is a clause stipulating that the terms of the agreement could change in the event of reunification so that the development remains viable.

The bill regulates such matters as the technical specifications of the slot machines, and approval of the machine suppliers by the gaming commission.

After enactment, investors will be given about a month to familiarise themselves with the law, after which the commerce ministry will issue a call for tender – around August.

The assessment will initially narrow down the tenders to three, and from these the best offer will be selected.

The commerce ministry plans to issue a casino licence by the end of the year, or beginning of the next.

Main opposition AKEL has tabled three amendments: prohibiting the issuing of credit within the casino, barring the operation of an additional casino with table games, and the introduction of additional criteria for admission of Cypriot nationals.

The communist party is ideologically opposed to the casino, arguing that it will exacerbate social problems.

Another matter that came up at the joint session of the House finance and commerce committees related to the government’s obligation, under an EU directive, to notify the European Commission of the legislation in its final form, that is, after it has been enacted.

To save time, the government notified the Commission of the bill prior to its passage. Commerce minister Giorgos Lakkotrypis reassured MPs that, as long as the latest modifications to the bill are non-substantial, there was no need to re-notify the Commission.

But this was questioned by officials from the attorney-general’s office.

It is hoped that the presence of casinos will increase the flow of tourists to the island by some 500,000.

By Elias Hazou

Greek Finance Minister Yanis Varoufakis said on Thursday the euro zone was “dangerously close” to a state of mind “that accepts an accident,” slamming other ministers, whom he said did not want to discuss his proposal to set up an automatic break on the country’s public deficit.

Varoufakis said the “radical proposal” for an independent fiscal council monitoring budget execution, with an automated hard deficit break, was Greece’s “gesture of goodwill to our partners,” to show it is keen to reform.

Asked about the possibility that Greece could leave the euro, he said he did not want to even begin to contemplate it.

Varoufakis said all political leaders had a responsibility to work on finding a solution, adding that Eurogroup chief Jeroen Dijsselbloem was focusing “unfortunately” only on Greece’s responsibilities.

Varoufakis said there was not much time left but that was enough to reach “a mutually beneficial solution.”

Asked what the worst-case scenario would be for Greece, he said: “When Europe’s future is at a critical juncture, we have a duty to work towards a resolution. In this context I don’t want to contemplate catastrophes.”

Home prices fell 1 per cent in the first quarter of 2015 compared to the quarter before and 6.5 per cent compared to the respective quarter of 2014, the Central Bank of Cyprus said.

Prices for houses and flats fell 0.8 per cent and 1.5 per cent in January to March respectively, the Central Bank of Cyprus said in a statement on its website today. Home prices fell a quarterly 2 per cent and an annual 8 per cent in the last quarter of 2014.

“Home prices returned to the average levels of 2006, the year in which the excessive demand for housing loans started which led to the sectoral overheating,” the central bank said.

Home prices in the Famagusta area rose 0.7 per cent in the first quarter compared to the quarter before, the central bank said. Home prices in both Limassol and Larnaca fell 1.3 per cent while in Nicosia and Paphos they dropped 1 per cent and 1.2 per cent respectively.

Home prices in Larnaca dropped 7.3 per cent in January to March compared to a year ago, which is the largest drop island-wide, followed by Nicosia with 6 per cent, Limassol with 6 per cent, and Famagusta and Paphos with 3.5 per cent and 3.3 per cent.

By Stelios Orphanides

A conference on artificial reef management will take place during this year’s Zenobia Week  in Larnaca which kicks off on June 23, the Larnaca Tourism Board said on Tuesday.

The conference will be address by Larnaca Mayor Andreas Louroudjiatis,  CTO Chairman Angelos Loizou  and Larnaca Tourism Board Chairman Dinos Lefkaritis among others.

Topics include ‘Challenges and perspectives in the coming decades’ a lecure by biologist  Panagiotis Dendrinos,  ‘First evidence from marine protected areas with artificial reefs in Cyprus” by Giorgos Bayadas from the department of fisheries and marine research,  ‘Artificial Reefs and financial benefits for Dive Centres – The example of Cyprus by  Jonathan Wilson, a member of Cyprus Dive Centres Association  and ‘Smart buoys as a tool for sea protection and promotion’ by  Dr Tasos Kounoudes CEO SignalGeneriX.

As part of Zenbobia Week, Larnaca is organising an underwater video competition having as a theme the marine life of the Zenobia, a ship that sank off Larnaca in 1980, considered one of the best wreck dive sites in the region, which has seen around 1.5 million dives since it sank.

Other events include underwater sports and recreation activities such as submersible scooters.

The tourism board said the Zenobia has become an exceptional artificial reef, hosting thousands of species of fish and other marine life and that was why the video competition seeks to record this impressive world and present it to the wider public.

The theme of the competition is Zenobia Marine Life and the video must be two minutes maximum. Deadline for submission is June 19. The videos will be posted online anonymously and the public will be able to vote for the one they think should win.

For more information and terms and conditions www.zenobiaweek.com

The cabinet approved a scheme to help borrowers from vulnerable groups facing foreclosures protect their primary residence provided they fulfil certain criteria, press and information office said.

Beneficiaries are private borrowers or owners of small enterprises with an annual turnover up to €250,000 employing less than four workers with the primary home serving as collateral in both cases, the PIO said in an emailed statement today. The net value of the residence has to be less than €250,000 while the outstanding amount has to be less than €300,000.

Under the terms of the scheme, borrowers must have exhausted restructuring and mediation procedures and already have applied to the insolvency agency for loans granted by a financial institution licensed by the Central Bank of Cyprus, the PIO said. Borrowers have to be residing permanently in Cyprus or legally in the previous ten years, and for at least five years in the mortgaged home.

The maximum government interest subsidy rate will not exceed 4 per cent and the new scheme will also take interest subsidies for housing loans under the guaranteed minimum income scheme into account for this purpose, the PIO said.

The state-owned Cyprus Land Development Corporation will be responsible for implementing the scheme, the PIO Said.

By Andria Kades

The cabinet approved a scheme to help borrowers from vulnerable groups facing foreclosures protect their primary residence provided they fulfil certain criteria, press and information office said.

Beneficiaries are private borrowers or owners of small enterprises with an annual turnover up to €250,000 employing less than four workers with the primary home serving as collateral in both cases, the PIO said in an emailed statement today. The net value of the residence has to be less than €250,000 while the outstanding amount has to be less than €300,000.

Under the terms of the scheme, borrowers must have exhausted restructuring and mediation procedures and already have applied to the insolvency agency for loans granted by a financial institution licensed by the Central Bank of Cyprus, the PIO said. Borrowers have to be residing permanently in Cyprus or legally in the previous ten years, and for at least five years in the mortgaged home.

The maximum government interest subsidy rate will not exceed 4 per cent and the new scheme will also take interest subsidies for housing loans under the guaranteed minimum income scheme into account for this purpose, the PIO said.

The state-owned Cyprus Land Development Corporation will be responsible for implementing the scheme, the PIO Said.

By Andria Kades

The cabinet approved a scheme to help borrowers from vulnerable groups facing foreclosures protect their primary residence provided they fulfil certain criteria, press and information office said.

Beneficiaries are private borrowers or owners of small enterprises with an annual turnover up to €250,000 employing less than four workers with the primary home serving as collateral in both cases, the PIO said in an emailed statement today. The net value of the residence has to be less than €250,000 while the outstanding amount has to be less than €300,000.

Under the terms of the scheme, borrowers must have exhausted restructuring and mediation procedures and already have applied to the insolvency agency for loans granted by a financial institution licensed by the Central Bank of Cyprus, the PIO said. Borrowers have to be residing permanently in Cyprus or legally in the previous ten years, and for at least five years in the mortgaged home.

The maximum government interest subsidy rate will not exceed 4 per cent and the new scheme will also take interest subsidies for housing loans under the guaranteed minimum income scheme into account for this purpose, the PIO said.

The state-owned Cyprus Land Development Corporation will be responsible for implementing the scheme, the PIO Said.

By Andria Kades

The European Central Bank on Wednesday did not raise a ceiling on emergency funding for Greek banks in a weekly review for the first time since February, a banking source said, adding financial pressure as the country scrambles to stay solvent.

Greek banks have survived on the emergency liquidity assistance (ELA) since largely losing access to capital markets and the ECB’s main funding window.

The ECB has been raising the cap on ELA in increments, but there has been opposition from within the bank to doing so each week on concerns it helps finance the Greek government.

The banking source said the ceiling was unchanged because deposit outflows had slowed to low levels, leaving an untapped liquidity cushion.

“This leaves an unused liquidity buffer of 3 billion euros,” the banking source said. “The reason for not raising the ceiling was that deposit outflows stabilised at very low levels.”

“An increase was not requested since the 80.2 billion euro ceiling is considered adequate following the stabilisation of deposit outflows,” a Greek government official added.

But Greek newspaper Kathimerini reported on Wednesday that deposit outflows had picked up in the last days on worries over the possibility of capital controls. Official data on deposit outflows in April will be released on Thursday.

The ECB declined to comment.

While propping up the banking system, the incremental hikes in ELA each week have also kept pressure on Athensto strike a deal with its euro zone and International Monetary Fund creditors over economic reforms required to unlock remaining bailout aid.

The head of Germany’s Bundesbank criticised the European Central Bank earlier this month, saying emergency funding for Greek banks broke the taboo of financing governments and it was not up to central banks to decide who was or wasn’t in the euro zone.

Hawks on the ECB’s Governing Council have also pushed for raising the haircut – or valuation discount – on the collateral Greek lenders submit to draw ELA funding but there was no decision taken at Wednesday’s teleconference, the source said.

Increasing the haircut would effectively reduce the value of security that Greek banks can offer and consequently the amount of ELA they can draw down.

A potential default by Athens on IMF loan repayments next month could be a trigger for the ECB to raise the haircut as it would signal a deterioration in creditworthiness.

CNP Assurances and its Cyprus unit CNP Cyprialife resorted to the London Court of International Arbitration seeking compensation from Bank of Cyprus on grounds that the latter is not adhering to the terms of an agreement signed by the French insurance company and Marfin Popular Bank in 2008.

Marfin Popular Bank was the official name of Cyprus Popular Bank, widely known as Laiki, at the time.

Under the terms of Cyprus’s 2013 bailout agreement, Bank of Cyprus merged with Laiki and took over all its assets and liabilities, including Laiki’s stake in CNP Cyprialife. CNP Assurance agreed to buy 50.1 per cent of CNP Cyprialife in 2008 and the deal was finalised in January 2009.

“Our side believes that together with the shares, Bank of Cyprus also assumed the obligations Laiki had towards CNP Assurances,” a person with knowledge of the situation said in a telephone interview on condition of anonymity.

“There were two obligations,” the source said. “First, Laiki would exclusively distribute our products, and second, if Laiki failed to distribute our products as agreed, CNP Assurances is entitled to sell back its 50.1 per cent stake in the company at a price, calculated based on a certain formula,” the source added without elaborating.

“As a result, there are two claims worth more than €100m each, one because Bank of Cyprus is not distributing our products and the second related to the lost right to sell back the shares to Laiki,” the source said.

Bank of Cyprus, which is also operating in the insurance business with its units Eurolife and General Insurance of Cyprus, was unavailable for comment.

According to a statement on the CNP Assurances website dated July 22, 2008, Laiki agreed to sell CNP a 50.1 per cent holding in its insurance unit Laiki Cyprialife as part of a “10-year renewable exclusive distribution agreement” with an extension option in the countries in which Laiki was then operating, including Greece.

“As a result of this agreement, Marfin Popular Bank (Laiki) will receive from CNP an up-front consideration of €145m, plus an earn-out of about €20m linked to business objectives,” the CNP Assurance statement said. “The structure of the transaction will also involve a pre-dividend payable to Marfin Popular Bank of €20m. This self-financed transaction will have a positive impact on CNP’s earnings per share from 2009 and will be neutral from a solvency perspective”.

The CNP Assurances statement added that Laiki was expected to post a pre-tax capital gain of approximately €60m from the completion of the transaction.
According to a separate statement on the CNP Assurances website, CNP Cyprialife lost less than €10m in 2013 under the terms of Laiki’s restructuring. The figure includes a 27.5 per cent writedown on uninsured deposits held at Laiki by the insurance company, a source familiar with the situation said.

Under the terms of the bailout, depositors at Bank of Cyprus lost 47 per cent of their deposits in excess of €100,000 while those at Laiki lost all their uninsured deposits.

The outcome of the application, half a year ago, is expected to be issued before the end of 2016.

By Stelios Orphanides