How 13 families have lost their North Cyprus Dream

On 12 March the auction will take place of thirteen Lapta four bedroom villas. It
will be the culmination of a battle fought over the last 8 years by the
homebuyers to save their homes and while there are only two winners these
home owners will be the losers.

Only now as all the facts are known is it possible to explain each of the key
elements where their destiny was etched out.

The first element was the contract of sale of the houses. It was drawn up by the
estate agent with sole agency for the building contractor. It noted, as they have
to do on the first page that the vendors warrant that they are the registered
freehold owners of the property and that the property is free from any
impediment, encumbrance, lien or adverse claim and that they undertake to
keep and preserve the property as such until the completion of this sale and
determination of transfer of title.

In fact the building contractor had signed a barter contract for the said land. In
exchange for a site large enough to build 19 houses, six would be built for the
landowner and the further 13 would be expected to net enough profit for the
builder to pay for the construction of those properties. In exchange the
landowner eventually had the title deeds to part of the site put in the name of
the builder, but only after about 5 sales contracts had been signed. In itself that
was not a problem. But the same contract stated that the landowner would be
placing a Charge for £300,000 on the builder to ensure the completion of his
properties. That Charge had to be registered at the Land Registry and, in fact,
means that there was an impediment on the land and the builder knew this
would happen before any sales contracts were signed. He fraudulently signed
each of those 13 house sales contracts and he may or may not have shared that
information with the estate agent concerned who would then be implicated by
association. Since the landowner’s name was on one of those contracts he is
implicated in this fraud too.

So the contracts all the buyers signed, in good faith, were not even worth the
paper they were printed on. However the buyers were not to find this out for
several years. The first to learn of this Charge which had been converted into an
Ipotec (mortgage) so that interest could be charged, was the one buyer who
registered his own contract at the Land Registry in April 2008 when there was a
general tidying up of the messy housing market. Things had got out of hand so
all contracts had to be registered by April 2008 and the Land Registry personnel
were under huge time pressures. Whilst most buyers asked their conveyancing
solicitors to take their contract for registration, and these were done on a daily
basis in batches, individuals had to queue up for a number to register their own
contracts. The only couple from the site, resident in the TRNC at that time, did
exactly that and were told that there was a Charge on the land. This
immediately rang warning bells and they contacted the Home Buyers Pressure
Group (Marion Stokes) who advised them to immediately sign the document
‘without prejudice’ and speak to their solicitor that day. They did exactly that
and their solicitor simply told them that it wasn’t a problem and everyone would
be aware of it. Since the buyers were not in touch with one another at that time,
this knowledge could not be discussed with the other buyers and even the
solicitor concerned who was also acting for four other buyers, failed in his duty of
care because he did not tell any of his other clients on site, whose contracts had
been registered, but the Land Registry had failed to undertake checks and
communicate this same information. So, of the 13, only one owner realised that
his contract was worthless and had to hope the reassurance that this was not a
problem was indeed just that!

Sadly the solicitor concerned was not, it seems, aware that the international
financial market collapse was already having an effect on sales of further
properties. That cash flow would soon become a problem for many construction
companies that had overstretched themselves and that if they had financial
commitments they could not satisfy then things were going to soon start going
‘pear-shaped’.

Some of the other buyers were ready to take transfer of their title deeds by the
summer of 2009 and only then were advised by their conveyancing solicitors
that the building contractor was unable to transfer because of a mortgage on the
property. Just two months later the building contractor advised his homebuyers
that he was financially unable to continue with the development of their homes.
Buyers on other sites had their own problems to overcome over the next few
years.

Over the next 8 months negotiations took place between the buyers and the
landowner with the aim of negotiating to obtain the title deeds and finish off the
site. But an agreement was never reached because the amount kept rising and,
in the end, the owners felt they would be better off engaging lawyers to
negotiate a solution.

Years of negotiation followed, memoranda, injunctions, and a failed bankruptcy
for the builder who, by this time, had fled the island. Finally the landowner took
the builder to court and whilst the new judge on the case reviewing all the
paperwork decided that the landowner and the homebuyers were all in the same
position, having failed contracts with the builder, they should try and negotiate a
solution. Since that wasn’t possible the judge then decided that the
homebuyers’ case should not be heard first but should be part of the main case.
And instead of making the homebuyers plaintiffs which they clearly were, they
were made additional defendants to the construction company.

Since the construction company had no legal representation and sent no-one to
these court appearances the additional defendants became, in effect, the main
defendant in a case they could not win. Sure enough after 14 months, a lot of
haggling, the main homebuyer’s witness had a stroke following major surgery
and a blood transfusion and was unfit to give evidence. She sadly passed away
six months later, and four months after the farce of a substitute witness and
totally incompetent and nonsensical questioning from the prosecution. The
decision went in favour of the landowner – the only way it could go in the
circumstances.

Of course the case went to the Appeal Court, where the homebuyers were told
that at least their equity in their properties would be taken into account. Still the
Appeal Court found for the landowner although it did restrict the amount of
money he would be awarded. Failure of each household to pay this amount
would result in the houses being sold at auction the homebuyers were advised.

The Appeal Court Judges did make recommendations to the government and said
this should never have been allowed to happen. While the solicitors acting in
this class action had warned their clients this would be a difficult case, they
never actually explained why. It was only a year after a speech given by Taner
Erginel to the British Residents Society, where the paper was published online,
that some of the homebuyers realised why their case was unwinnable. And the
reason? British Colonial Ruling to resolve the confusion over land ownership had
stated that everything on the land belongs to the landowner. So, while the
landowner bartered bare land, he now owned not only the land (even if the title
deeds were in the name of the building company) but all the houses on the land,
irrespective of any claims on them.

All along the solicitors urged their clients to find the money to pay for their title
deeds. However for many of them this was impossible, the money had been
spent on the legal battle and in living over those years. This is not the end of the
money train. The infrastructure still needs to be completed and some have
unfinished houses, five of them are not even habitable. By the time the case
was finally decided more than half of the homebuyers were retired and living on
a reduced and restricted income. While they had planned perhaps to retire and
live in their new houses, their dreams had become nightmares and they had
made other plans for the rest of their lives where they could. The economic
crisis had not left any untouched and the stress of the legal battle had caused
many to suffer serious illness from which some did not recover.

A further year passed after the Appeal Court judgement and the site was valued
by the Land Registry, then it went to court again, but this time there were
implications that the amount to pay for the title deeds was not just the amount
owed to the landowner. Finally in January 2017 the homebuyers were told that
the figure had nearly doubled. Apart from their tax liability and an unpaid
contractor’s bill there were additional costs that simply did not add up. In all a
staggering £45,000 for each homebuyer. How many people have this much of
their assets floating around

This auction will be the hardest for the three families who will be made homeless
by 12 March auction because they live on site and have no other home or
options. For some of the owners they will never have had a chance to stay in
their unfinished houses because they were not habitable. For those who had the
pleasure of staying in their homes for holidays, the loss will still be felt
considerably since the purchasers will immediately be granted the title deeds
and the taxes will have been paid. They may have to finish off the house they
purchase, and resolve the lack of infrastructure, but not for them the years of
stress or the legal battle that could not be won. Not for them the feeling that
they had been made scapegoats and fall guys for a builder who overstretched
himself, should never have been given a licence to run a construction company
in the first place when there were much stronger restrictions and requirements in
place to set up in business as a hairdresser than a building company.

The new homebuyers will not feel that the government and the judiciary have
completely let them down. Pursuing the builder for compensation or criminal
action for his fraudulent behaviour was not considered serious enough to engage
Interpol. He gets away scot free!

When the homebuyers asked if it was possible to take out a case at the European
Court of Human Rights they were told it would be a waste of time because there
were already a raft of judgements against the TRNC government but they
ignored those as much as they ignored anything the Appeal Court recommended
and advised. Shouldn’t ‘duty of care’ means more to all TRNC conveyancing
solicitors. Meanwhile these are just 13 more homeowners who have been let
down and lost their investment in the TRNC by the grossly inadequate system as
well as the main players in this whole mess. As for the auction, it seems to be
secretive with an unknown location and bidding process. Someone will benefit as
well as the landowner and the authorities, but the homebuyers will never see a
penny of the money they invested in a new home in the TRNC. It seems the
TRNC has a long way to go before it becomes a place that ordinary people will
want to invest in again where they can be assured of fair play and honest
brokers.

Main Players:

Estate Agent - Unwin Estates

Construction Company - Greatstone Construction (Directors Taser Hilkat and
early on Salih Borat)

Landowner - Bulent Yuksekbas

Solicitor representing the landowner - Akan Kursat

Conveyancing solicitor for five of the homebuyers - Munir Akil

Solicitors representing 11 of the homebuyers - Gunes Mentes (8 clients) and
Peyman Erginel (3 clients)

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