North Cyprus Property Law

Country:  Cyprus

The island of Cyprus is, practically speaking, divided into two parts. When talking about Cyprus one is constantly treading on eggshells but the history is that in 1974 the Turks (depending on your point of view) either invaded or liberated part of the island of Cyprus. Previously the island had been home to two major ethnic groups with the Turks predominating the Northern part of the island and the Greeks predominating in the Southern part. After the invasion most Greeks who had lived in the North were displaced to the South and most Turks who had lived in the South moved to the North.

The main focus of activity has been in the South of the island - what I will, for the purposes for this article, call Southern Cyprus. Five years or so ago the level of activity in the South generated a property boom and many canny investors who put their money into Cyprus at that time have made a lot of profit. The question is, is the same now going to happen in Northern Cyprus?

There are clear obstacles to buying property in Northern Cyprus. For a start, virtually no countries recognise it as a legally valid state. Thus, for example, the whole of Cyprus is technically part of the European Union but complicated arrangements mean that only the people who live in the South of the island under the effective control of the Government of Cyprus can benefit from membership.

A number of international court decisions have declared that the attractive plot of land that you wish to buy in Northern Cyprus does not belong to the charming Turkish gentleman who is selling it to you (even though you have a title deed issued by the Government of Northern Cyprus) but that it belongs instead to the equally charming Greek gentleman who was dispossessed at bayonet point in 1974. Thus, if you buy, there is always the risk that the true owner - the Greek - can come back and reclaim his property.

Until recently this was all rather hypothetical because there was no way the Greek 'owner' could enforce his rights in Northern Cyprus. But when Southern Cyprus joined the European Union the position became a lot more dangerous for the buyer from another European Union country. Part of European Union law enables the enforcement of judgements granted in one EU state in any other EU state and this can be done with relatively little difficulty or expense. So the dispossessed Greek Cypriot owner of land in Northern Cyprus can now get a judgement against you, the illegal occupant of that land in Southern Cyprus and enforce it not in the North (where there is still no chance of doing so) but against you directly here in the UK or Ireland. The courts here would, on the face of it, be able to seize your UK home to satisfy the judgement.

This is a very unattractive prospect and it has put off a lot of potential buyers in the North. But it did not deter Linda and David Orams. They bought a property in Northern Cyprus and, to cut a very long story short, the Greek Cypriot owner who lived in the South made a claim for possession of the property in the courts of Southern Cyprus which he then won and tried to enforce via the courts in London.

Rather to my surprise, he was unsuccessful. However, the story is not over because there is a pending appeal against the first decision. If he loses the appeal then the gates will be open for a flood of investors buying property in the North where it is much cheaper than in the South and where the island is even more beautiful and even more rugged. If he wins, the Orams will lose their home and investment in real estate in Northern Cyprus will (at least for most people) be put back until the whole political situation between the North and South of Cyprus is finally resolved.

So what are the chances of that happening? I'm a lawyer not a politician, but in my view the chances are very good. This old dispute needs to be solved if Turkey is to join the European Union and it is a constant thorn in the flesh of the European Union. The PR machine of Southern Cyprus seems to work better than the PR machine of Northern Cyprus and so people tend to forget that there are lots of people living in the North who have the same rights over land in the South from which they were dispossessed in 1974. In the end, common sense must prevail and I suspect that a deal will be sorted out between the two Governments whereby the Governments take responsibility for dealing with compensation and the individuals now in possession of the land North or South of the dividing line will become the full legal owners of that land. But this is only a guess. It is up to you whether you base your investments decisions on this guess or you play it more cautiously and wait for the problems to be solved before parting with your money. If you wait and I am right then you will lose a very good investment opportunity. If you go ahead and I am wrong you will lose your shirt!

Incidentally, have you noticed how in all the worlds' hotspots where there is bitter ethnic division the same truth prevails? That is that, to an outsider, there is no difference between the two sides. They have the same culture, the same ethnicity and they share hundreds of years of common history. To an outsider they look more like brothers or cousins than bitter enemies. The Catholics and Protestants in Northern Ireland. India and Pakistan. Israel and Palestine. North and South Korea and, of course, the Greeks and Turks. The food, the coffee, the music and the attitude to life is so close that you really wonder what they have to fight about. Forgetting religion. 

The author, John Howell, is a senior partner at the International Law Partnership.

See Also:   Cyprus, Property law

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