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CYPRUS: Tackling subsidence shambles at Pissouri

12 May, 2019 | Posted By: Antonis Loizou

The lack of progress to resolve the subsidence problem at Pissouri (Limnes area) as well as in other village locations has brought about buyer indignation and protests which reached a climax by closing off the Limassol-Paphos motorway.


Quite an illegal action on behalf of the protestors, as it may be, the Government by not offering some sort of a solution (even if it is not liked) it is not a way out.

The other day the Minister of the Interior declared that the failings of such buildings emanate from the private architects and engineers who designed the structural part of the buildings and as such, they ought to have carried out a soil investigation beforehand (we understand that underground water is the main cause of the problem).   

Even if we agree on the theory of the responsibility of the architects and engineers/designers, in practice, who will compensate the unfortunate buyers, when compensation might come to several million?

 

In addition, it is worth noting that the District Office (i.e. the Government) has the responsibility to study and check the structural study/design of the buildings submitted for approval by the private designers prior to the issue of the permits. 

 

As such and if no observations are made by the District Office, it is our opinion that the Government is partly to blame since it must approve/endorse a building’s design (without checking?) as submitted.

Amongst the various theoretical solutions submitted by all the parties involved, we noted that none had some sort of tangible solution, which can, in fact, be implemented.

Do not expect the Government to be willing to cooperate if it has to come up with cash compensation. 

A glimmer of hope is that the Minister of Interior suggested that the Government might be willing to offer ex-gratia payments to those occupants who had to abandon their homes and for others to help out towards the repairing of the damaged infrastructure.   

For this reason, and in order to provide some sort of compromise, we have suggested a detailed proposal for the provision of some sort of compensation through the use of unused building density and tax incentives (e.g. no capital gains tax payable in the event of sale etc).

 

The proposal was submitted to the Ministry of Interior (we had no response so far) and on being published we addressed the subject towards all affected people (no response from those as well).

Whatever the solution is, the actual compensation will not happen now but more like in 2-5 years and this in addition to the legal issues that will be raised against the designers/ developers/Government, which can take much longer (by which time the claimants will become old or die before receiving some sort of benefit).

Perhaps this may be the cause for introducing a minimum insurance cover regarding subsidence, which should be mandatory – be it that the premium might cost a bit more.

This kind of bad news for Cyprus’ building development is something we do not need and can do without. 

A recent BBC programme on the subject highlighted the embarrassing situation and it is one of the reasons why property with titles, aged 3-5 years, with tested structural stability, have an enhanced level of value which could reach the region of 10%-15% (plus).   

Of course, these sorts of problems are not unique to Cyprus as it seems that other European countries have similar problems (be it that this is not an excuse), but with our chequered history on the title deeds issue etc, we are more sensitive to it.

 

We will keep a watchful eye on the developments of Pissouri subsidence/compensation and we hope that we can come up with a new proposal on the subject depending on how the matter develops.