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FEARING a slump in the north Cyprus property market, a British-owned, Kyrenia-based construction company says it will cover all compensation costs incurred by their foreign house-buying clients if the Annan plan is implemented.

In a half page advertisement in the north’s English language weekly Cyprus Today, AGA Development Construction Limited and Amaranta Estates, who are currently undertaking what they describe of as “the biggest housing development project in north Cyprus” in the village of Klepini, claim their clients will be free from worry if they buy one of their newly-built luxury villas – because they will cover all compensation costs due to Greek Cypriots who lost homes and properties in 1974.

The advertisement, prominently placed in the bulging properties section of the paper, asked: “Are you worried about purchasing a property in Northern Cyprus because of the confusion surrounding the Annan plan? Worried that former Greek Cypriot land may be subject to a compensation claim? Are you concerned that you may have to enter into lengthy and expensive legal proceedings that you can’t afford? Worried that you may lose your dream home in Northern Cyprus?” The advertisement then sought to reassure potential buyers by saying: “Well don’t be. We can announce that if you have purchased or are thinking of purchasing a property from AGA Developments Ltd then in the unlikely event of a claim for compensation being upheld AGA Developments will pay the compensation, not you.”

AGA Development Ltd’s claim is based on a clause in the Annan plan that gives an ownership claim to the current users of properties in the north if the properties are deemed to have been “significantly improved”. This basically means that if more than the value of the land has been spent on buildings that cover it, the current user has priority over the Greek Cypriot who lived there before 1974.

However, whether AGA Developments are justified in making such claims remained in doubt yesterday after the Cyprus Mail spoke to Annan plan expert Dr Ayla Gurel. Dr Gurel was one of a team of two Turkish Cypriots and two Greek Cypriots charged with explaining the plan to their respective communities prior to it being put to referendum last April.

“On the face of it, it sounds like a good idea on the part of the construction company, but such things cannot be taken for granted. There is still a lot of uncertainty,” she said.

The uncertainly, Dr Gurel explained, stemmed from whether the purchaser fulfilled a host of conditions laid out in the Annan plan’s tortuous prose on property issues.

“You have to eligible. The current user would only have the right of first refusal to properties if the property was given as compensation to a Turkish Cypriot for property they had lost in the south,” Dr Gurel said.
AGA Developments say the properties they are selling in Klepini are indeed lands given to Turkish Cypriots in compensation for lands lost in the south. However, fulfilling the current user criteria does not end there.

“Building permission would have to have been granted by December 2002. If it was obtained later, the matter would be taken to the property board, which would then decide how the claim should be resolved.” Dr Gurel explained, adding that it was virtually impossible to predict what the board would deem a fair settlement.

“For the foreign purchaser to gain rights over the property would require a fair amount of good will on the part of the board,” she added.

Another factor, Dr Gurel explained, was that the Turkish Cypriots selling land, and subsequent homebuyer, would need to have been owner of the property for a combined period of at least 10 years.

“This is very clearly expressed in the plan, but one must also remember that the plan stipulates that this would only be accepted as a valid condition if the property sold by the Turkish Cypriot was of the same or similar value to the property he or she left behind in the south.”

In other words, if the Turkish Cypriot had received more than his fair share of property in the north and then sold it on to a foreign purchaser, the foreign purchaser could then fall outside the current user category and thereby possibly lose entitlement.

“Basically, there are a lot of ifs,” Dr Gurel concluded.

While the rights of foreign homebuyers in the north remain in doubt, there is also the question of whether AGA Developments would, in the event of a settlement based on the Annan plan, be willing or able to pay the compensation due to the original Greek Cypriot owner. A Turkish Cypriot lawyer, who asked not to be named said: “If they can pay it, good for them, but I believe that they will be looking at between 20 and 30 thousand Cyprus pounds per property. And as far as I know, there are more than a hundred in the project. We are talking very big money here.

“Some might think land is cheaper on this side [the north], but in the Annan plan it doesn’t work like that: The amount of compensation to be paid will be based on equivalent land prices in the south,” he added.

AGA Developments declined an invitation to comment.

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By Mary Antonescu