Risky business

With the property market booming in the south of the island, an increasing number of agents are promoting new developments in the north, where prices remain relatively low. But there is a big potential problem.

Since partition in 1974, Cyprus has been divided between the Turkish north and the Greek south. When the country was divided, properties and land in the north belonging to Greeks were confiscated and appropriated by local Turkish residents.

The current price divide in property is because virtually no countries recognise the existence of Northern Cyprus. There is a big question mark about Turkish “good title” to land and buildings in the north, which makes buying property risky. The original Greek owners could turn up and demand compensation — or their houses back.

Southern Cyprus recently joined the EU, which enables a Greek Cypriot former “owner” of land in the north to enforce a judgement against Britons buying in that region, in their own country. This potentially means that assets in the UK could be seized to satisfy the judgement.

The Association of International Property Professionals (AIPP) is concerned about the activities of agents promoting property in this area, some of whom want to join AIPP. The association is obtaining legal opinion from senior counsel in the UK so that it can offer guidance.

AIPP chief executive Paul Owen said: “This is the first time we have been faced with such a decision and although there can be issues with good title in other areas, none is as great as the problem in Cyprus.”

The association has put on hold applications from companies selling in northern Cyprus, pending the barrister’s opinion, expected this month.