Homes Overseas – May 2008
Is it safe to buy a property in Northern Cyprus?
For several years now we’ve had clients who have wanted to buy property in Northern Cyprus. The countryside is, if anything, even more beautiful than in the south and the prices have been very much lower.
In the past two main things have put them off. The first was that it was difficult to get to Northern Cyprus and the second was that there was some serious legal risks associated with buying there. Now access is much easier and it looks like the legal risks are a lot less. So is it now safe to buy a property in Northern Cyprus?
This simple question requires quite a complicated answer.
As with many things in Cyprus, the problem is rooted in the island’s history. Such are local sensitivities that even the choice of words used to describe the situation can cause offence. This article is properly not going to please anybody!
Back in 1974 the Turks (depending on your point of view) invaded or liberated parts of the island of Cyprus. The people of Greek origin living in the area now controlled by the Turks were, by and large, displaced to the South and a certain number of people of Turkish origin who lived in the South were displaced to the North.
Whatever the local people may say about the rights and wrongs of this situation the International community and the international courts were pretty much of one view. That is that the invasion was wrong and that the land in the area now occupied by the Turks in Northern Cyprus still belonged legally to the people who were dispossessed in 1974. This meant that anyone buying any of that land would face the risk of the old owner coming back and claiming it. The only secure way of avoiding that risk was to buy land from people who had a title that went back before 1974 as that title would be valid both according to the rules in Northern Cyprus and the rules in Southern Cyprus.
Despite the risk a number of people did go ahead and buy a property in the North. The prices were attractive and many people took the view that the risk of the former Greek owner coming and knocking on their door claiming ownership of the property was pretty remote. It was difficult for them to get there, the courts in Northern Cyprus would do absolutely nothing to assist them with their claims and the courts in Southern Cyprus had no power to do anything practical to enforce any judgement that they might make in favour of the old owner. So things continued for some time.
Then, in May 2004, Cyprus joined the European Union. Under European Union Law someone obtaining a judgement in any European Union country can enforce that judgement in any other European Union country with very little formality. Suddenly the way was open for the Greeks living in Southern Cyprus who claimed ownership of property in Northern Cyprus to make a claim directly against the assets of the English and other EU people who had bought those properties.
On the 9th of November 2004 a gentleman called Meletios Apostolides (who, you might have guessed from his name, is of Greek origin) obtained a judgement in the court in Nicosia (Cyprus) against an English couple called David and Linda Orams. The basis of the judgement was that Mr Apostolides was the legitimate owner of some land in Northern Cyprus from which his family had been dispossessed in July 1974.
In 2002 Mr and Mrs Orams bought a plot of land from a Turkish Cypriot who had good legal title to it under the rules of the Turkish Republic of Northern Cyprus (TRNC) then spend a lot of money putting a villa on the plot. Unfortunately this plot of land was the same plot that had belonged to Mr Apostolides. The International Law seemed clear in that his rights were treated as superior to the rights of the Turkish Cypriot who had acquired later title under the rules of the TRNC.
The judgement awarded to Mr Apostolides ordered Mr & Mrs Orams to demolish the house they had built (at their expense) and to surrender the land to Mr Apostolides. The Orams did nothing.
As a result Mr Apostolides brought his Cypriot judgement to the English courts who, in October 2005, decided that the judgement was enforceable in the UK against Mr & Mr Orams.
Mr & Mrs Orams appealed against that decision and it eventually came to be considered by the High Court in England in July 2006.
To cut a very long story short, when the English High Court considered the case they ruled in favour of Mr & Mrs Orams. The reasons for this decision are not at this stage important although it is important to note that the case is being referred to the European courts for what will be a final ruling on the position. The ruling is due at any moment so, by writing at this stage, I run the serious risk of being made to look very stupid when the court makes its decision and comes to conclusion totally different from mine!
In the meantime and in an entirely separate case a Mr Demades, who had also fled his land in 1974, made a claim against the government of Turkey for breach of his human rights. He claimed that by preventing him from using his house in Northern Cyprus the Turkish government was responsible for paying him compensation. In April 2008 that case was finally disposed of by the European Court of Human Rights. The court decided that the Turkish Government must pay Mr Demades €785,000.00 compensation. As is often the case, the most interesting thing about this judgement is what is contained in the small print. The government of Turkey offered compensation based on the value of the house but the court, following an earlier case, made it quite clear that Turkey could not treat this as Mr Demades abandoning his property and, in effect, selling it to Turkey. He was entitled to compensation for his inability to use his property but he remained the owner of the property. They said that “displaced Greek Cypriots, like the applicant, cannot be deemed to have lost title to their property”. This means that Mr Demades – or, to be more accurate, his heirs as he dies part way through the proceedings – can still take whatever steps are open to them to recover possession of the property from the people currently occupying it. The fact that Mr Demades heirs have this right is the second interesting point about this case. It confirms that just because the original registered owner of the land has died the problem does not go away.
It is worth noting at this point that Mr & Mrs Orams (knowingly or unknowingly) were pioneers. They bought a house with doubtful legal title on the basis that everything would probably be okay. It turned out not to be and they have now had to spend several years of their lives dealing with this very expensive problem. This is part of the risk you take when you decide to buy a property that has a legal title that is anything other than squeaky clean.
However, the actions of the Orams’ as pioneers have made it a lot more straightforward for later buyers because as things now stand it seems that the rights of the people in Southern Cyprus cannot be enforced directly in the UK against the buyers of their former properties in Northern Cyprus.
My personal view is that the European Courts are likely to agree with the English Court that Mr Apostolides is out of luck when it comes to being able to chase Mr & Mrs Orams in this country. Everybody is looking for a political solution to this general problem and I think that the political solution is going to involve Governments paying compensation to dispossessed people rather than individual owners of individual plots of land having to do so. But I may be entirely wrong! We shall have to wait the outcome of the court case to understand the way forward.
So, in answer to the question as to whether it is safe to buy in Northern Cyprus all I can say is that it depends upon your point of view.
If you are a cautious person then you should only think of buying a property that has a legal title that can be traced back before 1974 and which will, therefore, be recognised as a good legal title both in the TRNC and in the South. In that case your purchase is an entirely safe purchase – provided, of course, you take all of the normal precautions you would take when buying a property in any country.
If you are a little more adventurous or if you take comfort in the decision of the English High Court then you may think that, providing you are getting a bargain, you are not likely to lose your house if you buy a property in Northern Cyprus. Once the European courts have made their decision in a few weeks time, the position will be clearer still.
One thing, however, is and will remain clear. That is that anyone thinking of buying a property in Northern Cyprus really must take good legal advice to understand exactly what the risks are in their particular case and then they must decide whether the risk identified is justifiable in their personal circumstances.
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