North Cyprus Property Title Deeds



Northern Cyprus Property Title Deeds and Their Legal Standing
 
Foreign buyers of North Cyprus properties often raise concerns about the safety of purchasing property built on land with TRNC (Turkish Republic of Northern Cyprus) title deeds. These are North Cyprus property title deeds for land now in North Cyprus that was owned by Greek Cypriots prior to 1974, but which was appropriated by the North Cyprus authorities after civil unrest led to the movement and subsequent separation of the Turkish Cypriot and Greek Cypriot communities into northern and southern Cyprus respectively.


When considering the consequences of purchasing a North Cyprus property built on TRNC title, a purchaser of such North Cyprus properties has to consider firstly the type of the particular North Cyprus property title in question and secondly how a likely settlement of the land issue in Cyprus is likely to impact on such title. A settlement of the land question will be based upon the Annan Plan.


Although the Greek Cypriot community rejected the plan on 24th April 2004, it was accepted by the Turkish Cypriot community and unanimously approved by the international community. The United Nations has made clear that any future settlement must be based upon the Annan Plan. Its central tenets cannot be renegotiated.


The Annan Plan provides for solution of the land issue with the aim of creating two federal constituent states in Cyprus in which each respective community forms the overwhelming majority of the population (the principle of 'bi-zonality'). Bi-zonality is achieved by restricting the number of people from the opposite community settling in north and south Cyprus respectively. This means Greek Cypriots who owned TRNC title land pre-1974 would not generally be entitled to return of such land.



DIFFERENT TYPES OF NORTH CYPRUS PROPERTY TITLE DEEDS


There are three different types of Northern Cyprus property Title Deeds ("Kocan" in Turkish) available in Northern Cyprus:


1. North Cyprus Properties with Pre 1974 Turkish or Foreign Title Deeds  
2. North Cyprus Properties with TRNC Title (Esdeger or Tahsis)
3. North Cyprus Properties with Leasehold Title



1. NORTH CYPRUS PROPERTIES WITH PRE 1974 TURKISH OR FOREIGN TITLE DEEDS


1.1 Pre 74 Foreign Title North Cyprus properties

This is a North Cyprus property owned by European residents, (eg. British, German, Dutch). The title deed is internationally recognised. There are a number of checks to be carried out by the Council of Ministers, which means the sale will take approx. 6-12 months to complete. This type of North Cyprus property title deed is 100% immune to all political issues and land concerns making the same absolutely safe to purchase. 


1.2 Turkish Title North Cyprus properties

This is North Cyprus property Turkish Cypriots owned prior to 1974. Foreigners are limited to one donum (1,300 m2) per person (husband and wife count as one person unless they have different surnames). There are a number of checks to be carried out by the Council of Ministers, which means the sale will take approx. 6-12 months to complete. Same as above, this type of deed is also 100% safe. 



2. NORTH CYPRUS PROPERTIES WITH TRNC TITLE

 
2.1 Esdeger Title North Cyprus Properties (Better known as EXCHANGE title deed North Cyprus Properties)
The North Cyprus property with TRNC Title Deed was previously Greek Cypriot owned prior to 1974. Again there are a number of checks to be carried out by the Council of Ministers, which means the sale will take approx. 6-12 months to complete. When the Turkish Cypriot refugees came to the safety of the north after July 1974, they left all their possessions behind in the south. Accordingly, the Government then assessed on a points basis, the value of the refugee's forsaken assets in the south. With these points, the Turkish Cypriot refugee could take a relinquished Greek Cypriot house or land in compensation for his lost properties.


Under the Annan Plan there is almost complete protection for an owner of Esdeger title. A foreign person purchasing Esdeger Title North Cyprus property is considered to be in exactly the same position as the original Turkish Cypriot refugee who swapped his land post-1974. Therefore the Annan Plan expressly acknowledges there can be legitimate dealings in such title.

The first protection is that a current owner, including a foreigner, cannot lose Esdeger land to the Greek Cypriot who owned it pre-1974 if its value does not exceed the value of the land the Turkish Cypriot left in the south in 1974 by more than 50%. The second protection is that a current owner cannot lose Esdeger land if it has been "substantially improved" since 1974. This includes the construction of a building. The purchase of a house built on such land since 1974 is therefore automatically protected.


2.2 Tahsis (TMD) Title North Cyprus properties

'Tahsis' title land is more popularly called 'TMD land'. It is land originally owned by a Greek Cypriot prior to 1974, with title deeds issued by the North Cyprus government to a Turkish mainland settler post-1974 rather than a Turkish Cypriot refugee. Such land is generally situated in the most beautiful parts of North Cyprus.


Under the Annan Plan there is substantial protection for an owner of Tahsis title, albeit not as comprehensive as for an owner of Esdeger title. This is because only the second protection applies. In other words, a current owner is protected from losing the land to the Greek Cypriot who owned it pre-1974 only if it has been "substantially improved" since 1974. It does not enjoy the comparative value protection.


Nevertheless, because substantial improvement of land includes the construction of a dwelling thereon, the purchase of a house or apartment built on Tahsis land since 1974 is as much protected under the Annan Plan as those on Esdeger title. The difference in the two types of TRNC titles should therefore only concern those who are looking to purchase barren land as opposed to a dwelling.



3. NORTH CYPRUS PROPERTIES WITH LEASEHOLD TITLE

The Government owns this property. Long-term leases are granted for 49yrs. You can apply directly or via a solicitor to the Ministry of Tourism to transfer the lease.



COMPENSATION

We wish to point out to potential purchasers that even if there is only a very remote risk of a current owner losing property built on TRNC land, compensation might still need to be paid if there is ever a settlement. This is envisaged in the Annan Plan. It is something unscrupulous estate agents in North Cyprus fail to inform purchasers.


Compensation is likely to be modest. It will be based upon the value of the land in 1974 with index-linked enhancement. The compensation is likely to be approximately 8% to 15% of the value of a typical villa or apartment. This represents little more than a year's rental income. A purchaser could therefore buy a property and save a year's rent to provide a contingency fund in case compensation is payable in the long-term.


Moreover, there is a very strong chance compensation will be paid by the Government rather than a private owner. On 30 th June 2003 the Government in North Cyprus set up the Compensation Commission for Immovable Property to meet the claims of pre-1974 Greek Cypriot owners of TRNC title.

If the Government meets a compensation claim it is done on condition the pre-1974 Greek Cypriot owner waives any future claims he might have in relation to the land.



New TRNC Legislation Summary
Any Greek Cypriot who left property/land in the North is now able to apply to the TRNC courts for either compensation, exchange or the return of the property/land. Former Greek Cypriot properties/land, which have TRNC title deeds would be eligible for a return to the original owner only after a solution to the Cyprus problem is found.


These would only be properties/land where the current value of the property/land, through investment or a project doesn’t exceed its value when it was abandoned in 1974. Anyone who had to leave such a property/land would be compensated with a similar property/land of the same value.

Any compensation would be paid out of a fund provided by Turkey set up for this purpose and a legal expert says that no current owner of a North Cyprus Property would be expected to pay the compensation. Clearly the number of properties, owned by foreigners where the investment made was less than the value of the original property/land in 1974 would be very small compared to the increased value.


The new law was set up with the intention of it being accepted by the European Court of Human Rights because of a recent decision that highlighted the fact that the TRNC Immovable Properties Compensation Commission did not provide for the "possibility of restitution".

Any property/land purchased by anyone whether they are foreigners or TRNC Nationals since 1974, will have increased the value of the property/land and therefore all properties purchased are 100% safe and any compensation due will be paid out of the fund from the TRNC government only after a solution to the Cyprus problem is found.





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