When Is A Builder Not A Builder

[PaulW]

We are in the process of trying to sell our Alsancak apartment, the Kocan was never transferred into our names. The builders went bankrupt thus making us liable for the builders tax. However when we signed our original contract it was signed by, let's call him Mr Smith, on behalf of the construction company and in his own name, from here on in to be known as the vendors. Now we are being told by Mr Smith that in order for him to sign the Kocan over to a potential purchaser we must pay him X amount of pounds, from which he will pay the builders tax and capital gains tax. Does this seem like he is having his cake and eating it. Any thoughts?

[Keithcaley]

I'm afraid that this is a common strategy of 'Builders' - whether they have gone bust or not...

They sometimes simply plead Poverty, and say that they have not got the money to pay taxes, and of course Koçans cannot be transfered unless all dues are paid up to date.

Other times, they don't even bother to dress it up...

Put simply, it is extortion, and it is enabled because there is no realistic way of forcing them to complete their side of the deal - i.e. to pay their taxes and to pay to have the Koçan transfered, and to sign the transfer documents.

You might consider suing them for Breach of Contract, with view to making the Contract of Sale 'Null and Void' - but even if you succeed in this endeavour, you are still faced with the task of recovering the Sale price, plus expenses, from the Builder - and if he is a 'Man of Straw', well, good luck with that!

The late Marion Stoke's advice was to 'Do whatever is necessary in order to obtain your Koçan' - and if it means submitting to extortion, so be it. SADLY !!

[PaulW]

Thanks Keith, you basically confirmed what we already thought, looks like they have me by the short and curlies whilst over a barrel.
Paul

[Keithcaley]

I've now got this picture in my head, and I can't get it back out!

[Kath]

Is it possible to get this all done together with someone who knows the ropes? You give him the money, he is accompanied to pay tax etc? Worth a try?

[Keithcaley]

Is it possible to get this all done together with someone who knows the ropes? You give him the money, he is accompanied to pay tax etc? Worth a try?

Oh yes, although it is better to get POA (Power of Attorney) to act on the Builder's behalf, rather than entrusting him with the money!

They often ask for a 'sweetener' as well (and otherwise, what incentive have they got, when they don't really care whether their taxes are paid, or not, or whether you get your Koçan or not), and of course the 'person who knows the ropes' will need to be paid for their efforts - this is NOT a 5 minute job by any means, there will be several days or even weeks worth of visiting offices, 'persuading' people to actually shift your bits of paper from the bottom of the pile etc...

[JoandJelly]

If you were agreeable to paying this sum of money then I would insist on accompanying Mr Smith to the Tapu/bank for you to pay at that point thus ensuring that the deeds are transferred to you.

[pc4854]

When dealing with a cypriot business person, be preared to open your wallet and say "Help yourself please" and you will have cracked it.

[Deniz1]

He might not be Cypriot!

[PaulW]

Thanks for all your advice, he is a Cypriot and I have no doubt when I pay the money the Kocan will be sorted........... It's just I know I'm paying not just the builders tax and capital gains tax but also a, let's be polite and call it a fee.
Again thanks
Paul

[ozankoys]

Please be aware that the Vendor’s tax affairs need to be in order i.e. they do not owe any tax generally before you can pay the individual tax to transfer your property. If he has been officially declared bankrupt a meeting with the tax office should circumvent this issue.
Do not part with any money until you are 100% sure you will get your Kocan, go to the tax office together to pay the stoppaj & KDV (unless he has given someone POA) & hand over his signing fee once he has signed the transfer papers in the Land Registry.
Good luck!

[PaulW]

Please be aware that the Vendor’s tax affairs need to be in order i.e. they do not owe any tax generally before you can pay the individual tax to transfer your property. If he has been officially declared bankrupt a meeting with the tax office should circumvent this issue.
Do not part with any money until you are 100% sure you will get your Kocan, go to the tax office together to pay the stoppaj & KDV (unless he has given someone POA) & hand over his signing fee once he has signed the transfer papers in the Land Registry.
Good luck!

Thank you, I think I'll need it.

[solic200]

If he is Turkish then he was probably a waiter or Cypriot he probably worked for the Belladere and was given land therefore is there a genuine builder in Cyprus?

[£eagle]

You/your buyer may need to look a little deeper into the circumstances. If the builder (assuming he/it to be the registered owner of the property) has been made bankrupt/put into liquidation then only the trustee in bankruptcy can transfer the title. Not Mr Smith.
Even if the builder is not formally insolvent a sale now could be set aside later and you could be liable to your purchaser.
Is there a bank involved somewhere?
Have you asked the "owner" for a formal statement of affairs to prove his/its insolvency? You could then use it to threaten to make the builder insolvent.
There is a possibility that you could use the Contracts Law or the Specific Performance Law to order the owner to pay his taxes, if he promised to do so in your contract. However you can't force him to transfer the title.
As said above, the demands can amount to criminal extortion.

If you know exactly your legal position and that of the owner/builder you may have levers to negotiate a better deal. Litigation here, though, is a quagmire which sucks out all your money and soul. Avoid it, if you can.