By Jean Christou Published on December 21, 2008
OPENING a new can of worms for property owners, the Attorney General has told a British buyer his developers had not committed any crime by effectively re-selling a house legally registered in his name.
The three-line letter to Conor O’Dwyer, who is engaged in a high-profile dispute with the developers over a house in Frenaros, has left other buyers worried that the Contract of Sale they lodge with the Land Registry is not enough of a protection when they come up against the title-deed holders.
“They always say the sale of contract is a great protection, but it’s clear now that the owner of the land is the developer, even though we are told once the sale is registered, we are protected and the house cannot be sold to someone else,” said Denis O’Hare of the Cyprus Property Action Group (CPAG).
Indeed the law says that once the Contract of Sale is registered at the Land Registry, the purchaser is the beneficial owner of the property until the provisions of the contract have been fulfilled by both sides.
O’Dwyer is however in dispute with the developers, an issue that is pending before the civil courts, which will decide who was in breach of the contract. In the meantime, the house registered in his name at the Land Regsitry has been sold to someone else, although the second buyer cannot register her contract legally as O’Dwyer is listed as the beneficial owner and had paid around £75,000 sterling before the dispute arose. The developers, Karayiannas of Paralimni, still have this money.
In an attempt to secure justice, O’Dwyer’s lawyer Yiannos Georgiades asked the Attorney General’s office to bring criminal charges over the re-sale of the house.
He used Section 303a of the criminal code, which says: “Any person who, with intent to defraud, deals in immovable property belonging to another is guilty of a felony and is liable to imprisonment for seven years” “Dealing in immovable property” is defined as selling, renting, mortgaging to another, or “encumbering in any way”.
However following a police investigation, the Attorney General’s office said in a letter to Georgiades on November 26 saying: “It has been ascertained that no criminal offence has been committed.”
Paulina Paulina Evthyvoulou–Evthymiou, the Counsel for the Republic who signed the letter told the Sunday Mail: “It was not a case of fraud and it’s not something we could go before the court with.”
Evthyvoulou–Evthymiou said all of the money had not been paid by O’Dwyer, and that the contractors said the Briton had broken one of the terms of the contract “This is a civil case and not a matter for the Attorney General,” she said. “If he had a judgement from a civil case that he was the owner, it would be different. The civil case is unresolved. I don’t have an owner and I’m not in a position to decide who the owner is,” she added.
“This just sets a precedent that a house can be sold twice,” O’Dwyer said. He said all estate agents say a house can’t be sold twice. “We fell out,” he said of Karayiannas. “The contract was never declared legally null and void so this is quite clearly criminal fraud.”
Referring to the fact that he had not ultimately paid all of the money due to the dispute, O’Dwyer said: “How much is the developer entitled to keep… eighty per cent, ninety per cent? They (the Attorney General’s office) just proved you don’t own your house.”
CPAG’s O’Hare was equally damning. He said with the ruling it appeared the Attorney General was now confirming that the “so-called protection” of lodging a sales contract with the Land Registry gave little protection to buyers.
“This situation whereby a developer can sell you a property, take your money and then arbitrarily cancel your contract and sell your house on to some other unsuspecting buyer – and that this is not a crime, just beggars belief!” he said.
“If we don’t have protection of the land registry, that means even if you paid 90 per cent and the developer then comes and says I don’t like your face…it puts all buyers in jeopardy.”
Larnaca-based property lawyer George Coucounis details a case of a woman who was the registered owner of an apartment but did not yet have title deeds from the seller, as is usual in Cyprus. When the seller died, his heirs accused her of trespassing and denied the apartment had been sold to her. She, however made the mistake of counterclaiming for damages instead of sticking to the sales contract, which
Coucounis said would have guaranteed her rights. Counterclaiming meant she accepted termination of the contract. Ultimately she was compensated but lost her apartment.
But Evthyvoulou–Evthymiou said the letter she signed to O’Dwyer did not mean the general concept ‘Contract of Sale’ meant nothing. “I can understand his point. The problem is for a criminal case we need a
case beyond reasonable doubt. How are we going to prove he is the owner beyond reasonable doubt? It’s not beyond reasonable doubt that he is the owner under 303a,” she said.
“I would have to prove the house belongs to Conor and his wife and I can’t prove that. Here we have two parties to a contract each saying he is the owner of the house. A judge must decide who the owner is. Why do we have to decide in the criminal court that he is the owner? The Attorney General cannot resolve this,” she added.
Georgiades, O’ Dwyer’s lawyer, said Karayiannas had no right to unilaterally cancel the contract, especially since O’Dwyer gave them the money for the due instalment they claim he didn’t pay. “The money was literally given to them but they refused to accept it. This was their way of terminating the contract. They were not entitled to terminate it. Conor was always willing and able to pay the money,” he said.
“In accordance with the files at the land registry, Conor remains the beneficial owner unless a judgement is issued otherwise. Until then no one is entitled to buy it. If anyone does, it’s not a bona fide purchase, and that person has no legal rights,” he added.
Referring to the Attorney General’s decision, Georgiades said it was a matter of interpretation. “We shouldn’t have to wait until the court judgement in the civil case. Since there is a dispute, the developers can’t say the property is theirs, whether Conor paid all of the money or not. If you are the legal owner, under what circumstance are you the legal owner? It depends on how you interpret ‘belonging to another’. There are a lot of inconsistencies in my opinion as to how things are dealt with.”
What is beyond doubt however is that the woman now living in O’Dwyer’s house did actually buy it from Karayiannas but she has not been able to register it due to his prior legal claim. The woman’s lawyers Pittadjis of Paralimni said in a letter to O’Dwyer in May 2007 that the woman had no idea there was a dispute raging over the property. Pittadjis was also the lawyer for the developers at the time.
“She bought it in good faith and after she was told that a previous contract had been cancelled,” the Pittadjis letter said. Evthyvoulou–Evthymiou said police had interviewed the woman and she had no complaint and did not feel defrauded
“She was told it would be all resolved with damages so she would not lose the house. There is no theft, no fraud. What is the criminal offence?”
However Coucounis, who is not familiar with the O’Dwyer case, said generally a contract can only be dissolved legally, and nothing can be done with a property until the civil court decides who is in breach. “The sale of contract remains in force and is valid until the court orders that it is legally or lawfully terminated. Until then delivery rights remain with the purchaser,” he said.
He said he had another case in Larnaca eight years ago, which went before the Supreme Court.
The first purchaser filed the sale of contract to the Land Registry close to the deadline but had not yet taken possession of the property. The second purchaser had possession but had not registered the sale of contract, he said.
“The Supreme Court decided that the contract deposited at the land registry was the one that was valid and that it superseded the second contract. It’s not that easy for a vendor to get rid of a purchaser as long as the purchaser insists on the contract,” he added.