Newsroom
A surprising revelation in the ongoing discussion about the Rent to Mortgage Scheme has raised concerns for homeowners across Cyprus: around 60% of the properties involved in the scheme do not have an official certificate of occupancy, meaning that a building complies with all necessary regulations and is safe for use or habitation. This lack of approval could potentially lead to significant legal and financial risks for property owners, including administrative and criminal liabilities.
What does it mean to own a home without an official certificate of occupancy?
A certificate of occupancy is a crucial document that ensures a property meets all the necessary building and safety regulations required by the government. Without it, a home is technically not in full compliance with the law, which creates risks for the owner, especially when the property is part of a government-backed program like Rentto Mortgage.
During a meeting of the Parliamentary Finance Committee, a Treasury spokesperson clarified that while the Cyprus Asset Management Company Ltd (KEDIPES), which manages properties under the scheme, would not need the final approval for homes it acquires, the property owners themselves still face significant responsibility. The spokesperson emphasized that if a property lacks this approval, the owners could be held accountable, and in some cases, they might even face criminal charges.
For properties lacking the necessary certificates, KEDIPES, as the future owner under the Rent to Mortgage Plan, would assume administrative and legal liabilities. This raises the question of how the government, which does not require an official certificate of occupancy for its own properties, will handle the situation when properties with approval issues are passed into KEDIPES’ hands.
However, the Treasury official emphasized that any potential changes to the law would not negatively affect tenants. In fact, KEDIPES would cover the cost of rehabilitating the properties, which could amount to 15% of the property’s value. For example, if a home is valued at €200,000, KEDIPES would bear up to €30,000 in rehabilitation costs to fix any issues or irregularities identified with the property’s title or condition.
What does this mean for homeowners?
For homeowners involved in the scheme, the message is clear: properties without an official certificate of occupancy could complicate the situation. If the bill to exempt KEDIPES from the approval requirement passes, the approval process for the Rent to Mortgage Scheme could accelerate. But owners of these unapproved homes may still face challenges with future sales, or with legal and financial consequences if they fail to rectify the approval issue.
As the situation develops, it’s important for owners to be aware of the potential legal and financial impacts of not having the appropriate certificates. With KEDIPES stepping in to manage these homes, the government will likely continue to explore ways to protect both homeowners and tenants while ensuring the success of this key housing initiative.
