Advice from Solicitor to pay Contractors share of Tax

jbm2009


Joined: 20/02/2009
Posts: 19

Message Posted:
12/10/2009 13:00

I have been told that it has just become common knowledge that if your Contractor blackmails you in refusing to release your Title deeds unless you pay his tax and you do not concede you risk loosing your house. This is due to the fact that he holds your deeds as an asset and therefore if he goes bankrupt you could loose your house. I had always thought that the purpose of paying Stamp Duty was to protect you from Contractors double selling or re-mortgaging your property. Obviously if this new advice is correct there seems little point in paying out more money if you are unable to get your deeds. I can't see how anyone would be willing to buy a re-sale house without deeds if there is still this threat of loosing your property if contractor goes bust.

elko2



Joined: 24/07/2007
Posts: 4400

Message Posted:
12/10/2009 13:14

According to the Rgistration of Estate Agent Law which was put into practice at the beginning of 2008, by registering your Sale Agreement with the Land Registry, you stop the owner from mortgaging it or selling it to someone else. My interpretation of the law (which has not been tested in court yet) is that your registration is almost as good as a mortgage taken out by you i.e. your rights should come before the rights of third persons against the owner.

ismet

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
12/10/2009 13:55

Is there ANY part of the contract enforceable.?





"the basis of both legal systems is definitely British law but Turkish Cypriot law is unique "



As far as property is concerned ,unique must mean non existant.

Geoff1131MK11


Joined: 04/04/2009
Posts: 396

Message Posted:
12/10/2009 14:29

We have been asked by our builder to pay the land tax on our complex before he will complete the parcelization process. But our understanding is that the person or company who's name is on the title deeds has to pay this until transfere of deeds takes place. Ismet any advise?

lapta29


Joined: 09/10/2009
Posts: 88

Message Posted:
12/10/2009 14:32

Name the alleged solicitor and name the builder so others can avoid the scumbags.

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
13/10/2009 19:02

I have just commenced legal action on this very point. I am very happy with what I have been told by my new advocate.Will keep all informed with progress.

This I am informed is speeding up rapidly since the swearing in of some new judges around 23rd of September. A target has been set to clear the backlog of cases and ensure that future cases proceed a lot quicker. This process has already started.

petez


Joined: 04/12/2008
Posts: 560

Message Posted:
13/10/2009 19:07

There is some advice here on this subject.

http://www.living-in-northern-cyprus.com/review/2009/10/legal-advice-2/

kibrissibel


Joined: 18/02/2008
Posts: 562

Message Posted:
13/10/2009 19:35

Message 4 - I take it you are talking about the yearly propety tax? Yes, the landowner should pay the property tax as it is in his name. However, it is fair that you pay your share when you take possession of the property, unless of course the landowner is refusing to transfer the title! Unfortunately, the tax office/belediye does not chase the landowner for outstanding taxes and the land registry will refuse to transfer title unless the property tax has been paid. If the landowner is willing to transfer title but refusing to pay the property tax, you will have to decide whether to pay it yourselves to secure title. Property tax is not an excessive amount, but yet again, another system that needs to be changed.

Brinsley


Joined: 04/04/2009
Posts: 6858

Message Posted:
13/10/2009 19:40

Lapta29 Msg 5



Dead easy!



Crook, crook, crook, crook, crook and so on forever!



Richard

negativenick


Joined: 10/11/2008
Posts: 6023

Message Posted:
13/10/2009 19:43

of as that bird from up the Tumbar, with the blond curly hair, said "we've all been conned..."

Geoff1131MK11


Joined: 04/04/2009
Posts: 396

Message Posted:
13/10/2009 19:48

Hi kibrissible, the builder is calling it the ' land tax' maybe you are right in calling it the property tax, as they are saying that we have had occupancy since May last year. The amount being asked for is around 1500tl and there are 45 units on the site, so as you say its not a great deal of money. We offered to pay this if the biulder paid it initially to get the deeds transfered then we would repay them when the transfere took place. They dont seem to be interested in doing this, they say that the government want this money paid before they will transfere the deeds, which backs up your point that the Land Registry wont transfere unless all taxes are paid. Our concern is that, we pay and the deeds still dont get transfered, its a catch 22 i suppose.

Brinsley


Joined: 04/04/2009
Posts: 6858

Message Posted:
13/10/2009 19:58

NN



You sold a car today! How about selling Advocates a few lemons! (Joke) Party very happy! Cheers



Richard

pinkchilli


Joined: 30/11/2008
Posts: 689

Message Posted:
14/10/2009 00:05

Property tax is to be paid by the landowner. As it is similar to Council Tax in the UK, it will be the occupier who will eventually be responsible.



On this occasion, I believe it is acceptable for the occupier to pay, as they will have had the benefit of the facilities provided by the Belediyere. (Whatever they are).

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
14/10/2009 19:04

I understood we were talking about the tax payable upon transfer of the Kocan. This is currently 4% to be paid by the developer and .75% (of the purchase price)by the purchaser. .75% is a reduced offer which has I understand been extended recently. As this is £4000 and £750 for a £100,000 property weare talking a lot of money which quite a few developers are saying they want the purchaser to pay before they will release any Kocan.

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
14/10/2009 21:15

breezyboy



If its 1500 ytl, it must be council tax. ibm2000 is lucky in that case as that is legitimate.Most of the time its as you say ,capital gains liabilities, that if the builder refuses to pay means the buyer has to in order to get the deeds.



I believe the problem is not so much that the builder refuses to give the Kocan but that the Govt will refuse to allow title transfer unless allthe taxes are paid.The Govt is only interested in getting the taxes and the vendor already has his money and what happens to title doesnt affect him. The only one that loses out is, no surprises here ,the buyer,who has to pay the builders taxes for him. Wonder if the bin man could refuse to lift your bin unless you paid his income tax.

If it wasnt so laughable it would be tragic.

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
15/10/2009 14:17

Hi Girne 29,

I have instigated proceedings using a different attorney. This guy is very helpful and informative and he is not scared of litigating. It will be interesting to see what happens, I only did this the week before last when I was in TRNC so no news yet.

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
15/10/2009 14:38

Breezeboy



Please keep us informed as this is a common rip off and is only becoming apparent as more and more people have occasion to pay title transfer taxes.



Who is your new attorney ,sounds like you have struck gold.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 14:04

Sorry but i think i am missing something here i am a little confused so i will tell you my experience and maybe you can advice

Sept 2008 i bought ny villa in sept of this year i sold my house my solicitor Munir Akil wrote to me to tell me that my builder said my kocan is ready (suddenly) and he would not sign the contract unless i paid his capital gains tax (£3350) my solicitor said this was wrong but could do nothing about it then i was told by my estate agent (who i might add sent me to the cleaners ) told the buyers i would pay the vat on the villa another £4750 and yet my house contract clearly stated that this was not payable by myself until i had the kocan deeds. What also amazes me is that the builder also stated that the payment of this money he would then put kocan in my name.WHY i had just sold the house. my buyers solicitor has for the past 3 weeks even though i have received money for the sale and all expenses paid is retaining £200 for property tax is builder to pay?

scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
23/10/2009 15:31

I'm not really sure I understand msg 18 despite having read it twice now. What question are you actually asking?

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 15:37

sorry scruff i told you i was confused!!!!!

what i need to know is was i responsible to pay the builders capital gains tax before he signed the sale contract of my villa

also the vat and lastly who is responsible for the payment of the property tax which my buyers solicitor is still holding money for until this is sorted

hope this is clearer

breezyboy


Joined: 14/05/2007
Posts: 1179

Message Posted:
23/10/2009 16:34

Hi Girne 29

Mustafa Akbelin at H & A is handling this for me. Another board member has had good reults with him.



Jacko,

you say that you have to pay the capital gains tax after you get the Kocan. If this is in your contract it is very unusual. The capital gains tax is normally paid by the builder as it is they who have made this gain not you.

You need your contract examining closely. The guy I mention above is ever so helpful if you still do not fully understand what your contract states.

scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
23/10/2009 16:48

Are you saying that you've sold your Villa to a new buyer? Did you already have the kocan/title in your name?



The annual Property tax (council tax) is the responsibility of the landowner until title is transferred into the name of the buyer, but I doubt if there's a builder/landowner in Cyprus who would pay it. They would expect you, the buyer, to pay it before title was transferred. In the scheme of things it's a relatively small amount anyway. Now about £150/£250 per annum & depending on the size of the house & whether there's a pool. This increased fourfold to this level several years ago, but prior to 2006 (memory) the amount was insignificant.



I can better answer your other questions about taxes when you have answered the 1st 2 questions in my reply.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 17:29

Message 21 and 22

Firstly my house is a resale and sold to new uk buyers contracts was drawn up for all parties to sign but my builder refused to sign contract for the sale to go ahead unless i paid his capital gains tax (he states it is government tax ) he told my solicitor he had the kocan ready to sign to me in my name even though it was not needed anymore by myself (he claims he had it!!!) then my estate agnt told the buyer i was liable for the payment of vat on the property and now i am told i am liable for extra cost of property tax after the sale has now gone ahead and i was held to randsom to pay these costs to builder. My contract i do not have anymore this was given back to my solicitor who i might add said what the builder was doing was wrong but could do nothing about it i just feel very let down as i sold the villa at great loss as well as incurred another £13k strling costs

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 17:38

i just like to add that my contract when i had it statd that any vat and tax due was not payable until receipt of the Kocan

scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
23/10/2009 18:21

Basically your builder knows you want to sell the house & he's in a position to blackmail you into paying his taxes too, because he has to sign the contract over to the new buyers if you do not already have a kocan in your name.

I'm assuming that the buyer expects a kocan to be in your name before the sale proceeds. I'm sorry to say that you've been stitched up. The only concern I'd have is that you ensure that these payments are only made through your lawyer & you ensure the kocan is actually available.

Did you sell your house through an agent? All these issues should have been discussed with the Estate Agent & with your lawyer at the time the house was first under offer. If the Agents knew you didn't have the Kocan, then the question of outstanding taxest should have discussed at first contact.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 19:02

Scruff thank you for c onfirming what i already knew that i was totally stitchd up even by the estate agent concerned who was suppose to be working on my behalf not the buyers. This estate agent is known by all on the forum.... They knew i did not have the kocan butr knew it was close to obtaining. To this day after the sale had gone through and costs paid i do not know whether the builder actually put the kocan in my name (of course if it was ready). I was a single woman and easy picking in this lucrative property market in the TRNC.

girne 29


Joined: 06/12/2007
Posts: 1488

Message Posted:
23/10/2009 19:13

jacko



I know its not much, but at least you know most potential purchasers will be reading yours and similar posts. Forewarned is forearmed. Very few people now can blame lack of knowledge on the subject.



Hope everything works out for you

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 19:19

thanks girne 29 i do hope that sellers and purchasers dont fall into the same trap as i did as i would hate them to be robbed like i was

scruff


Joined: 15/07/2008
Posts: 1070

Message Posted:
23/10/2009 20:19

Since you've sold, I really can't see why you shouldn't name the dodgy agent?

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
23/10/2009 20:26

Jacko had you received your PTP for your villa because if not the builder would not be able to transfer title into your name anyway.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 20:31

no jo did not receive my PTP my solicitor whilst sale was in the early stages told me that it still had about 6 weeks to go thereafter i heard nothing more as the sale took place and now it seems there is nothing i can do about it apart from forewarn people who are faced in selling their properties. so what you are saying is that he took my money under false pretences??????

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
23/10/2009 20:44

Definitely. Sounds like a bit of a deal between the builder and your solicitor because your solicitor knows that you have not received PTP and therefore cannot have deeds transferred into your name. Have you actually paid the money for the capital gains tax? You should demand that the deeds are issued and see what happens.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
23/10/2009 21:34

my solicitor jo took the tax vat and estate agents cost and his out of the sale before paying me all i have is one or two emails of the sale and one from the builder this week when i told him quite bluntly in an email that he had ripped mme off as for naming the estate agent what is the point i have never been one to slander people only try to help if i can all i can say is that the estate agent is well known for criticism and bad service something i should have considered but when you choose multiple agencies you go with whoever gets you a buyer at the time. No deeds are forthcoming as the property has been sold for the past 3 weeks and contracts exchanged then so no paperwork....

joandjelly


Joined: 24/02/2008
Posts: 2953

Message Posted:
23/10/2009 23:35

What a shameful state of affairs. You should perhaps report your solicitor to Baro for this dreadful behaviour. I thought your builder was one of the good ones. I'll have to think again obviously. No doubt he will expect the new buyer to pay his tax again when the time comes for them to get their deeds.

jacko


Joined: 20/11/2007
Posts: 193

Message Posted:
24/10/2009 10:25

jo who is Baro do you have contact for themi think for the sake of others i need to do something it wont help me be i do hope i can help others. As you rightly said is the builder going to ask the new buyers for the same money when there deeds are ready. As he quoted in his email to me (yes guy and gals) i got a response must be a first. He said that times are hard for all, so this nis the new way folks of builders, etc recouping some of there money for unsold properties



jo how are you and Jell? i hope you are both keeping well long time since we spoke.

kibrissibel


Joined: 18/02/2008
Posts: 562

Message Posted:
24/10/2009 14:27

Unfortunately, until the system of PTP and Specific Performance Laws are changed, and the procedure for purchasing property, this kind of blackmail will continue, to the detriment of purchasers and the whole TRNC economy.

adagirl


Joined: 01/06/2009
Posts: 371

Message Posted:
24/10/2009 16:03

Its not just blackmail with deeds, when I bought my 1st house here nearly 7 years ago, the Tenants were given 6 months notice. They were still in situ when I moved here 7 mths later. I was told to pay them a years equivelant rent up-front as a pay off, or wait anything up to 2 years (plus court fees) to get them out. I paid up - because it was



a) cheaper than renting a house myself for 2 years (or more)



b) pretty scary as a foreigner in a foreign land!!!