BUYING IMMOVABLES IN NORTHERN CYPRUS (TRNC)

FACTS:

The immovables that are situated in North Cyprus (Turkish Republic of Northern Cyprus) may be classified under two groups;

1-      Turkish Land

2-      Greek Land

There are not any problems with regards to the Turkish Lands.

Our problem focuses on Greek Lands given to Turkish Cypriots.

After the war and declaration of TRNC, Greek Lands left in Northern Cyprus went under the control of TRNC Government.

Greek Lands were given to Turkish Cypriots who left their immovables in South Cyprus, Turkish and Turkish Cypriots who has participated in the war and Turkish immigrants from Turkey etc.

 There are three turning points with regards to Greek Lands.

Louzidou case:  

This case arising from the application of a Greek Cypriot was brought to ECHR by the Cyprus Government against Turkey for acting in breach of its obligations under the Convention. The alleged breach concerned Article 1 of Protocol No.1 which is the denial of access to property and Article 8 of the Convention that is unjustified interference with the right to respect for someone’s home. ECHR with its decision dated December 18^th 1996 held Turkey liable under these Articles.  Turkey was ordered to pay compensation.

This case formed the precedent of all the applications made by Greek Cypriots to ECHR and Turkey paid damages to the claimants.

Rather than a compensation for any purported expropriation of her property the claim of the claimant is thus confined to the loss of use of the land and the consequent lost opportunity to develop or lease it.

So one of the important results of these cases are that Greek Cypriots, who are the owner of the immovables situated in North Cyprus, are recognized by ECHR as the owners of their properties.

After this decision and especially the Xenides decision the Immovable Property Commission (IPC) was formed by TRNC under the new compensation law, Law 67/2005 that entered into force on December 22^nd 2005. This commission had the competence to decide on the restitution, exchange of properties or payment of compensation.   

A recent and another important case concerning the Greek properties and cases in ECHR is Demopoulos case.  

Demopoulos Case:

Within this case ECHR decided that, the IPC procedure may be regarded as a “domestic remedy” of the respondent State. ECHR has stated within its decision that “The Court finds that Law 67/2005 provides an accessible and effective framework of redress in respect of complaints about interference with the property owned by Greek Cypriots. The applicant property owners in the present cases have not made use of this mechanism and their complaints under Article 1 of Protocol No. 1 to the Convention must therefore be rejected for non-exhaustion of domestic remedies. It is satisfied that Law 67/2005 makes realistic provision for redress in the current situation of occupation that is beyond this Court's competence to resolve.“

As can be seen from the statement above ECHR has recognized the remedies given by the IPC.

The importance of this decision is that when compensation is paid to a Greek Cypriot that property may be deemed as expropriated by TRNC. And within practice and from the prior decisions of ECHR it is observed that where a Greek Land is given by TRNC to a new owner in such circumstances IPC awards compensation or exchange of properties (that are not owned personally) rather than restitution.

Where a person owns a Greek Land situated in North Cyprus and IPC pays compensation or provides other remedies for it then there cannot be further claims with regards to that property.

An example where a case is struck off by the ECHR after applicant accepted an offer of 1 million dollars and exchange of property put forward by the IPC is Eugenia Michaelidou Developments Ltd and Michael Tymvios v. Turkey.

Apostolides v. Orams:

Apart from these two cases heard by ECHR, another Greek Cypriot (Apostolides) has used another procedure. In this case, Apostolides and his family initiated legal proceedings in Republic of Cyprus (South Cyprus) claiming their properties then applied for recognition and enforcement of the decision taken by the Cypriot Courts.  The matter went all the way to the ECJ and ECJ has decided for the enforcement of the decision.

This case has a big impact on European Citizens owning Greek Land in North Cyprus as it may mean that such decision may be enforced against them in their home countries and they may be liable to pay compensation.But it was decided before the Demopoulos case so ( if any ) what effects of that judgment would have on new cases following a similar procedure as Orams case are unknown.

Today, immovable properties weather Greek or Turkish Land in TRNC do not possess any risks as to their ownership and can be freely purchased. That is because immovable properties of Greek Cypriots in TRNC will either be legally acquired by the TRNC government upon the payment of compensation (or by any other remedy provided) to its Greek owner by the IPC or the dispute with regards to such immovables will end upon the final solution of the Cyprus problem.    

But one should always seek independent legal advise while purchasing immovable properties. There may be other risks on the title of the immovable properties which are required to be examined legally. 

MORTGAGE FORECLOSURE IN TURKEY

Mortgage foreclosure proceedings in Turkey are initiated by an application to the related Execution Office. An application with the physical file prepared by Lawyer is made to the Execution Office. This file includes Request for Initiation of Enforcement Proceeding (Claim), Execution Writ, Envelope to serve documents, supporting documents of the Debt, stamp for the service of documents, power of attorney and stamp of Bar Union.  

Execution Office sends the Writ of Execution / Payment Order together with the supporting documents of the debt, to the debtor.

Also Execution Office sends a notice to the Land Registry informing that the mortgage foreclosure proceedings has been initiated and requests the up to date land registry records of the immovable.   

Again Execution Office requests the cadastral extract of the immovable from Cadastre Directorate and zoning status information of the immovable from the Municipality the immovable property is related to. 

Lawyer may identify whether the immovable is rented or not. Where it has been established by Lawyer that the immovable is rented, a writ is sent by the Execution Office stating that they should deposit the following rent amounts to Execution Office instead of landlord.   

An enquiry for the address of the debtor recorded in an official entity and service of the documents to that address is requested if the documents cannot be served to the debtor.

Writ of Execution and supporting documents attached are sent to the address found to be served to the debtor. 

Upon acquiring the cadastral extract from the Cadastrate Directorate and zoning status information from the Municipality, these documents are added to the file of Execution Office and sent by Execution Office to an expert to do the appraisal of immovable. 

Expert together with the file sends the appraisal report stating the up to date value of the immovable to the Execution Office.

Appraisal Report is sent to debtor, creditor and 3^rd parties that are recorded in the land registry as owners of rights on the immovable property.

Parties may object to the appraisal report, for reasons such as the value of the immovable is high or low, by lodging an application to the Court within 7 days upon the service of the report.

Where an objection is lodged, file is sent to the Court and a new expert is appointed to do a new appraisal.

The decision of the Court is final.

The preparations are initiated for the sale of the immovable by the Execution Office over the new value assessed.

Upon request, Execution Office sets the 1^st and 2^nd auction date and prepares the announcement of auction.

The date of auction is formed of two dates, 1^st and 2^nd Auction dates. There is a 10 day period between two dates.

The announcement of auction prepared is served to the debtor, creditor and 3^rd parties that are recorded in the land registry as owners of rights on the immovable property. (in practice, the new appraisal report is also attached to prevent problems that may arise during the auction) .

The announcement of auction is sent to the Municipality and appointment of an auctioneer and tax debt information of the immovable is requested. Also announcement of auction is published in one of 5 biggest newspapers throughout Turkey. 

Auction takes place on the 1^st date set previously. But in any event the auction date has to be served to the parties and has to be held at least 1 month after the announcement of auction is published in newspaper. Otherwise auction cannot be done on the date set previously. Also, auction will not be done, where the information given within the announcement of auction is wrong and related parties object to the auction based on such reason. In such circumstances, a new auction date is set by the Execution Office. 

Where the immovable cannot be sold for a total amount over 50% of appraised value and receivables having priorities such as auction expenses and tax debts in the 1^st auction date, another auction is held on the 2^nd auction date for 50% of appraised value. If the amount collected from the 2^nd auction is not over 50% of appraised value and receivables having priorities such as auction expenses and tax debts in total, recommencement of auction proceedings are requested.

Parties attending to the auction have to deposit securities equivalent to 20% of the appraised value. Securities to be deposited shall be deposited in cash or by security letter of a bank on auction day. Parties who do not deposit securities cannot attend to the auction. 

Party winning bidding has to deposit immediately purchase price together with expenses, taxes, VAT, land registry fees and expenses in advance. But where a request is made for extra time, a period not exceeding 10 days, may be given by the Execution Office Chief Clerk to the winning bidder for depositing the purchase price. 

A lawsuit with a claim such as the auction is held in breach of the legal procedure may be initiated within 7 days after the date immovable is sold. With the initiation of such a lawsuit, auction does not become final and land transactions are not completed until this lawsuit is decided. The amount paid by the winning bidder is held by the Execution Office until the lawsuit is decided.

Auction becomes final if a lawsuit for the termination of auction is not initiated within 7 days. But in practice Execution Office Chief Clerks wait for 21 days.

Land transactions are carried out upon the finalisation of the auction.

In practice, lawsuits for termination of auction are initiated by 3^rd parties and especially by the debtors.

Where the immovable property subject to the auction is occupied, Execution Office sends an order for the evacuation of the immovable and requests the evacuation of immovable within 15 days after the order is served.

If the immovable property is not evacuated within 15 days, occupants are forced to evacuate by Execution Office. 

Immovables in TRNC as to the Constitution

Right of the State to Ownership

Article 159

(1)   (a)  All immovable properties registered in the name of the Government of Cyprus before the l6th of August 1960 and all immovable properties transferred to the Government of Cyprus after the l6th of August 1960 ; roads, waters, water resources, ports, harbours and shores, docks and piers, lakes, riverbeds, and lakebeds, historical cities, buildings, ruins and castles and the sites thereof, natural resources and underground resources, forests, defence buildings and installations, green areas and parks  belonging to  the public ; village  roads and rural pathways open to the public; and  buildings used for public services ;

(b)   All immovable properties, buildings and installations which were found abandoned on l3th February, 1975 when the Turkish Federated State of Cyprus was proclaimed or which were considered by law as abandoned or not being owned after the abovementioned date, or which should have been in the possesion or control  of the public even though their  ownership had not yet been   determined ; and

(c)   all immovable properties found within the area of military installations, docks, camps and other training grounds specified in the 1960 Treaty of Establishment and its Annexes,

situated within the boundaries of the Turkish Republic of Northern Cyprus on l5th November 1983, shall be the property of the Turkish  Republic of Northern Cyprus notwithstanding the fact that they are not so registered in the records of the  Land Registry Office ; and the  Land Registry Office records shall be amended accordingly.

(2)   Notwithstanding any other provisions of this Constitution, the ownership of the immovable properties specified in sub-paragraphs (a) and (c) of paragraph (1) above shall not be transferred to physical and legal persons.

Provided that the making of the necessary adjustment by the State to public roads and to public village roads and field pathways is exempted from the above provision.

Easements and other similar rights for specified periods and long term leases over such immovable properties may be established and registered in the manner and under the conditions prescribed by law for purposes of public interest.

The establishment and registration of such rights, the period of which exceeds fifty years, shall be subject to the approval of the Assembly of the Republic.

(3)   Out of the properties specified in subparagraph (b) of paragraph (1) above, the transfer of the right of ownership to physical and legal persons of immovable properties other than forests, green areas, monuments and parking places, waters, underground waters, natural resources and buildings, installations and sites required for defence, public administration and military purposes and those required for purposes of town and country planning and soil conservation, shall be regulated by law.

(4)   In the event of any person coming forward and claiming legal rights in connection with the immovable properties included in subparagraphs (b) and (c) of paragraph (1) above, the necessary procedure and conditions to be complied with by such persons for proving their rights and the basis on which compensation shall be paid to them, shall be regulated by law.

(5)   Places of religious worship and the immovable properties in which they are situated shall not be transferred to physical and legal persons.  The State shall take the necessary measures for the safeguarding, maintenance and preservation of such places and properties.