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Bank caught in Cyprus property battle
By Kerin Hope
FT
June 2 2005 03:00
HSBC, the global bank, has become one the casualties of an increasingly
bitter dispute over property that further threatens chances of a
settlement on the divided island of Cyprus.
The Greek Cypriot owner of HSBC's premises on the Turkish Cypriot
north of the island has asked the bank to start paying a monthly rent
on its previously rent-free branch in Kyrenia.
The property was used by Demirbank, a Turkish bank, until 2003,
when it was acquired by HSBC.
"There wasn't much point in a Greek Cypriot trying to get the Turks to
pay up. But it's different now that Cyprus is in the EU and a British
bank is involved," says a Nicosia-based lawyer familiar with the case.
In talks this week, Sir Kieran Prendergast, a United Nations envoy,
is exploring scope for resuming negotiations to reunify Cyprus within
the European Union.
But a spate of lawsuits filed by Greek Cypriots seeking to prevent
their property in the Turkish Cypriot-controlled north from being
developed as holiday villas or commercial premises threaten to
undermine the improved relations between the two communities that
had been seen as critical for securing a settlement.
The Greek Cypriots overwhelmingly rejected a UN peace plan at a
referendum last year - a move that prevented the Turkish Cypriots,
who had approved the plan in a separate vote, from joining the
European Union.
By triggering fears the island could be permanently partitioned,
the Greek Cypriot rejection also accelerated a building boom in the
north, where more than 75 per cent of land is owned by Greek Cypriots
who fled when Turkish troops invaded in 1974 after a coup aimed at
uniting Cyprus with Greece.
The government of the self-declared Turkish Cypriot Republic of
Northern Cyprus transferred land to Turkish Cypriots who lost property
in the south and to settlers from the Turkish mainland. New title
deeds were also issued.
"North Cyprus is one of the cheapest property markets in the
Mediterranean, and demand is increasing, especially with Turkey in
line for EU membership," says a Turkish Cypriot lawyer. "If the
Greek Cypriots don't want a settlement, why not develop the land
they abandoned."
In a test case, a Greek Cypriot court in January ordered Linda and
David Orams, a British couple, to demolish their villa in the north
and pay compensation to the Greek Cypriot owner for illegally making
use of his property.
The decision cannot be enforced in the north, but now that Cyprus
is an EU member, the Greek Cypriot authorities can seek to have the
court decision enforced against the Orams' property in the UK.
In retaliation, foreign homeowners in the north have set up a
UK-based lobbying organisation and retained a London firm of lawyers
to protect their interests. About 6,000 foreigners, mainly UK citizens,
are believed to own property in north Cyprus.
Ian Betts, a retired accountant and treasurer of Eupro, the lobby
group, said: "People here bought in good faith and believe they're
being unfairly targeted by Greek Cypriots. We are raising funds for
a legal counter-attack."
The UN peace plan provided for returning two-thirds of Greek Cypriot
properties in the north, through a territorial adjustment and
exchanges with Turkish Cypriot property in the south. Greek Cypriots
would have been allowed holiday homes in areas under Turkish Cypriot
administration.
"By rejecting the plan, the Greek Cypriots put their property
in the north at risk," says Loukas Charalambous, a Greek Cypriot
commentator. "Taking legal action against foreigners and Turkish
Cypriots only cultivates hostility and a climate of confrontation."
By Kerin Hope
FT
June 2 2005 03:00
HSBC, the global bank, has become one the casualties of an increasingly
bitter dispute over property that further threatens chances of a
settlement on the divided island of Cyprus.
The Greek Cypriot owner of HSBC's premises on the Turkish Cypriot
north of the island has asked the bank to start paying a monthly rent
on its previously rent-free branch in Kyrenia.
The property was used by Demirbank, a Turkish bank, until 2003,
when it was acquired by HSBC.
"There wasn't much point in a Greek Cypriot trying to get the Turks to
pay up. But it's different now that Cyprus is in the EU and a British
bank is involved," says a Nicosia-based lawyer familiar with the case.
In talks this week, Sir Kieran Prendergast, a United Nations envoy,
is exploring scope for resuming negotiations to reunify Cyprus within
the European Union.
But a spate of lawsuits filed by Greek Cypriots seeking to prevent
their property in the Turkish Cypriot-controlled north from being
developed as holiday villas or commercial premises threaten to
undermine the improved relations between the two communities that
had been seen as critical for securing a settlement.
The Greek Cypriots overwhelmingly rejected a UN peace plan at a
referendum last year - a move that prevented the Turkish Cypriots,
who had approved the plan in a separate vote, from joining the
European Union.
By triggering fears the island could be permanently partitioned,
the Greek Cypriot rejection also accelerated a building boom in the
north, where more than 75 per cent of land is owned by Greek Cypriots
who fled when Turkish troops invaded in 1974 after a coup aimed at
uniting Cyprus with Greece.
The government of the self-declared Turkish Cypriot Republic of
Northern Cyprus transferred land to Turkish Cypriots who lost property
in the south and to settlers from the Turkish mainland. New title
deeds were also issued.
"North Cyprus is one of the cheapest property markets in the
Mediterranean, and demand is increasing, especially with Turkey in
line for EU membership," says a Turkish Cypriot lawyer. "If the
Greek Cypriots don't want a settlement, why not develop the land
they abandoned."
In a test case, a Greek Cypriot court in January ordered Linda and
David Orams, a British couple, to demolish their villa in the north
and pay compensation to the Greek Cypriot owner for illegally making
use of his property.
The decision cannot be enforced in the north, but now that Cyprus
is an EU member, the Greek Cypriot authorities can seek to have the
court decision enforced against the Orams' property in the UK.
In retaliation, foreign homeowners in the north have set up a
UK-based lobbying organisation and retained a London firm of lawyers
to protect their interests. About 6,000 foreigners, mainly UK citizens,
are believed to own property in north Cyprus.
Ian Betts, a retired accountant and treasurer of Eupro, the lobby
group, said: "People here bought in good faith and believe they're
being unfairly targeted by Greek Cypriots. We are raising funds for
a legal counter-attack."
The UN peace plan provided for returning two-thirds of Greek Cypriot
properties in the north, through a territorial adjustment and
exchanges with Turkish Cypriot property in the south. Greek Cypriots
would have been allowed holiday homes in areas under Turkish Cypriot
administration.
"By rejecting the plan, the Greek Cypriots put their property
in the north at risk," says Loukas Charalambous, a Greek Cypriot
commentator. "Taking legal action against foreigners and Turkish
Cypriots only cultivates hostility and a climate of confrontation."