Cyprus is a popular destination for the acquisition by foreigners of a holiday or retirement home. Due care and diligence should be taken though when considering buying property situated in Northern Cyprus which has been under Turkish military occupation since 1974.
The 1974 invasion forced nearly 200,000 Greek-Cypriots to leave their homes in the north. More than 150,000 settlers from mainland Turkey have arrived in the intervening years, taking over Greek-Cypriot properties in violation of the Geneva Conventions.
Property situated in the Northern area of Cyprus has recently been experiencing a massive increase in construction and a ‘property sale’ boom. The vast majority of the properties being sold though are still owed by Greek-Cypriots who were forcibly removed from their homes by Turkish soldiers. Approximately 82% of the property situated in Northern Cyprus, now under Turkish occupation, was owned by Greek-Cypriot nationals whereas approximately 16% was owned by Turkish-Cypriots (according to the 1964 Land Registry Record).
Today’s Legal Status
Buying property or exploiting the sale of property situated in the northern area of Cyprus is prohibited and therefore an illegal act is being committed. Any such persons may find themselves facing criminal and civil actions in the courts of the Republic of Cyprus. Arrest warrants and court decisions may well be judicially recognised and enforced internationally.
Recent court rulings by the Human Rights Court of the Council of Europe and a Greek Cypriot court have reaffirmed the property restitution rights of Greek Cypriot refugees.
In a recent court case (The Orams’ case), a court of the Republic of Cyprus ordered a British couple to demolish their two-story villa in the north, estimated between $300,000 and $500,000, and pay hefty compensation to a Greek-Cypriot refugee for illegally using his property. British authorities could enforce the decision against the Orams, resulting in the possible confiscation of their property in England.
The International Perspective
The right of ownership, including the rights of restitution of properties, apart from being a constitutional right under Cyprus Constitution, is also a well protected basic human right and fundamental freedom in accordance to International Organisations and ratified Treaties.
Through its resolution 37/253 (13th May 1983) the UN Security Council and General Assembly “calls for the restoration and respect of the human rights and fundamental freedoms by all Cypriots, including the freedom of movement, the freedom of settlement and the right to property”.
Further, on the 28th July 1998 the legal battle of Titina Loizidou v. Turkey in the European Court of Human Rights ended and Turkey (not the so called Turkish Republic of Northern Cyprus, which the court described as a “subordinate local administration”) was found guilty of preventing Titina Loizidou, the legal owner of Greek Cypriot land in the northern part of Cyprus from gaining access to, and peacefully enjoying her property. The court ordered Turkey to pay a total amount of CY£457.000 (811.585 EUROS) for the 8 year loss of enjoyment that Mrs Loizidou has suffered since Turkey finally recognized the jurisdiction of the ECHR in 1990. The ECHR decided that “the Republic of Cyprus remains the sole legal Government of Cyprus. This means that the Republic of Cyprus continues to maintain full legal rights over its entire area and population, albeit temporarily hindered from exercising such rights in the occupied areas due to the use of military violence”.
EU citizens – European Arrest Warrants
Citizens of EU Member States buying or exploiting properties situated in the Northern Cyprus may well find themselves guilty of a criminal offence for which they will thereafter be facing European Arrest Warrant in whichever EU country they may be. European arrest warrants can be issued by the Courts of the Republic of Cyprus upon hearing an appeal made by a Cypriot citizen accusing an EU citizen of illegally possessing or exploiting his property.
Section 281 of the Cyprus Penal Code (as amended) provides that any person who occupies, cultivates, distributes or somehow uses a property without the legal owner’s permission is guilty of a criminal offence and subject to a prison sentence of up to 2 years and/or a fine of up to CY£5000. This amendment to the Penal Code passed by the House of Representatives on the 17/3/2005 increased the prison sentence from 6 months to 2 years and the fine from CY£450 to CY£5000 in order that the offence will qualify for the issuance of a European arrest warrant, on the basis that the crime for which the warrant is issued must carry a prison sentence of at least 1 year.
The Legal Perspective
According to the Halsbury’s Law of England, Criminal Law, Evidence and Procedure, any assumption by a person of the rights of an owner amounts to an appropriation (theft), and this includes, where he has come by the property, innocently or not, without stealing it, any later assumption of a right to it by keeping or dealing with it as an owner.
Issues affecting the investors
Those who may be looking to acquire a property in Northern Cyprus should be aware of certain important issues before spending a large amount of money, possibly life-savings, on a holiday home, relocation or retirement home.
- The North Cyprus has been under Turkish military occupation since 1974. The self-titled ‘Turkish Republic of Northern Cyprus’ is not recognized by any state other than Turkey.
- It is often difficult to establish the legal ownership of the property in question. It is not uncommon for false, illegal title deeds to be produced. Unless the government of the Republic of Cyprus has genuinely issued the title deeds, the investor runs a huge risk of losing all their money.
- Recent test case rulings in the European Court of Human Rights have demonstrated that legal ownership of properties in northern Cyprus still belongs to the Greek-Cypriot owners. The Court awarded compensation to the plaintiffs for the loss of use of their properties and ordered that they be allowed access to their properties.
- Regulations from the International Air Transport Association (IATA) currently prevent direct flights to northern Cyprus.
- UK investors looking to retire to northern Cyprus should be aware of their pension status. Thanks to the Reciprocal Social Services Agreement between the UK and Cyprus, retirees in Cyprus can receive their UK state pension and it will increase equally with any increase in the UK. Retirees are also eligible for winter fuel allowances. However, these valuable advantages of what amounts to an index-linked state pension and other state benefits, would not be available to retirees in Northern Cyprus. To illustrate the effects of this, at an inflation rate of 3% a person retiring to Northern Cyprus with a state pension of £200 a week would, after 20 years, see the spending power of their pension reduced to just £110 a week.
The Foreign Governments advise their citizens
On 6/6/2005 the UK Parliament re-affirmed that the Government already advises potential purchasers of property in north Cyprus that the non-recognition of the “Turkish Republic of Northern Cyprus” and the possibility of a future political settlement in Cyprus could have significant practical, financial and legal consequences. We (the UK Parliament) strongly encourage potential buyers to seek independent, qualified legal advice and we also highlight the risk that purchasers could face legal proceedings in the courts of the Republic of Cyprus (as answered by Mr Douglas Alexander to a question raised by Mr Dismore – Vol.434, Part 11).
The aforementioned advice is further included in the website www.fco.gov.uk of the UK Foreign and Commonwealth Office (go to ‘Travel Advice’ and then ‘Travel Advice by Country’), in which it is noted, inter alia, that “There are a number of potential practical, financial and legal implications, particularly for those considering buying property in the north. These relate to the non-recognition of the “Turkish Republic of Northern Cyprus”, the suspension of EU law in northern Cyprus, the possible consequences for property of a future settlement, and the many thousands of claims to ownership from people displaced in 1974. There is also a risk that purchasers would face legal proceedings in the courts of the Republic of Cyprus, as well as attempts to enforce judgments from the courts of the Republic of Cyprus elsewhere in the EU, including the UK.”
British newspapers are also warning citizens not to buy in northern Cyprus, where hundreds of billboards advertising property sales line roads that hug the pristine coast.
The London Observer wrote in a full page report that buying such holiday property “could become a legal and financial nightmare.”
Since 28/4/2005 the French Foreign Ministry included a statement on its website www.france.diplomatie.fr warning about the risks of purchasing property in Cyprus’ occupied areas. The French Foreign Ministry statement calls on people to seek legal advice before any purchase of property in northern Cyprus. It notes that because the “Turkish republic of northern Cyprus” is not internationally recognised, and in anticipation of a solution to the Cyprus problem, any action concerning property in the northern part of the island poses “serious financial and legal risks”. It further notes that since Cyprus’ accession to the European Union on 1st May 2004, those who have purchased property or who are living in property that is in dispute (an issue of illegal exploitation of property since 1974) could be faced with lawsuits, not only by the Republic of Cyprus but also by any EU member state.
On 25/5/2005 the Ministry of Foreign Affairs of the Russian Federation has issued a travel advice by which it discourages Russian citizens from purchasing Greek Cypriot properties in the Turkish occupied areas of Cyprus. Moscow also discourages its citizens from entering the island through illegal points of entry and points out that decisions by Cypriot courts on such matters could be executed in Russia as well.
Regarding the purchase of land and business dealings in the occupied areas of Cyprus, the advice recommends that Russians take into account the legal right of property of Greek Cypriots who own property in the occupied north and warns that any move overlooking that right of property could lead to long court proceedings and hefty fines.
Since 6/5/2005 the Canadian Foreign Ministry included in its website www.fac-aec.gc.ca a travel directive on the possible dangers in relation to the purchase of immovable property in the Turkish occupied areas.
The travel directive states that Canadian citizens who are interested in purchasing property in occupied Cyprus should seek independent qualified legal advice due to the possibility of facing law suits and their property being questioned by Cypriots who were displaced in 1974.
On 26/5/2005 the US State Department has included a text in the consular information section of its official website on the purchase of property in the Turkish occupied areas of the Republic.
The travel instruction states the following: “US citizens who buy or lease property, particularly in northern Cyprus, may find their ownership challenged by people displaced in 1974. Prospective property buyers should seek legal advice before buying.”