Compensation

Our regular extract by Yiouli Taki, focusing on aspects of the Annan Plan, also available here:

THE UN plan provides that compensation will be estimated on the basis of 1974 property values and the addition of a coefficient representing the increase in the value of land in the area where the property is located. How is this coefficient defined in the occupied areas? Can you give us any indications on the rate of the coefficients, which define the amount of the compensation?

According to the provisions of the plan, compensation will not be set according to the value of the land in the area where the property is located. Consequently, the coefficient will not be defined by the current value of property in the Turkish Cypriot side.

The plan provides that: “Any dispossessed owner shall be entitled to claim full and effective compensation as determined by the Property Board in accordance with international standards (hereinafter referred to as ‘compensation’) in exchange for transfer of title to the affected property to the Property Board. Entitlements to compensation shall be assessed and paid by the Property Board at current value, unless otherwise specified in these provisions.”

The current value is the value of the property at the time that possession was lost, plus the adjustment, which reflects the revaluation – increases in average property prices in comparable areas between 1974 and the day the Foundation Agreement comes into force.

We are not in a position to provide accurate indications concerning the rate of the revaluation coefficient. This will depend on the location of the affected property and in which property category it will fall in. The provisions concerning the value assessments will be defined with the advice of quantitative surveyors, economists and land evaluators.

Which factors will decide whether two areas are of comparable value?
The increase in values will be estimated based on the assumption that the events between 1963 and 1974 did not happen – in other words, devaluation of property due to these events will not be considered. Thus, wherever possible, the increase in values will be assessed by comparing similar areas, where prices were not negatively affected by events.

I come from Rizokarpaso: I have improved a Turkish Cypriot property but I want to return to my village. Will I be compensated for the improvement I have made to the Turkish Cypriot property?
The Annan Plan provides for compensation of a current user who has made improvements worth more than 10 per cent of the current value of the property in its original state.

When will churches be returned and who will be responsible for their restoration?
Article four of the 7th Annex to the Foundation Agreement refers to religious sites as follows: “The Churches and Evkaf shall be entitled, without exception and within three years of entry into force of the Foundation Agreement, to reinstatement of any affected property owned by them which was used as a religious site in 1963 or 1974.”
The Annan plan makes no reference to the restoration of such sites. However, in the case of churches of historical importance, it is realistic to expect assistance from international organisations such as UNESCO.

Could someone who chooses to return under Turkish Cypriot administration decide to use part of his property while leasing or seeking compensation for the rest?

The Annan plan does not make specific reference to such cases. It simply says that any of these options will only become available once a dispossessed owner submits his claim to the Property Board and once the Board rules that he does indeed have a legal right to the specific property. It does not specify what should happen if an applicant has more than one title deed, if he should make his claim for all titles together or for each separate title deed.

Taking into account, however, that each case will be examined individually as to whether it is eligible for reinstatement, it can be assumed that each claim will apply to each affected property separately. If this is indeed the case, then one can assume that a property owner who lost use of more than one property will be allowed to exercise his property rights as he chooses for each separate claim.

I live in a Turkish Cypriot house in Limassol, I have a house in Morphou and land north of Morphou. Can I stay in the Turkish Cypriot house?

Under the provisions of the Annan plan, the current user of a property who lost use of property within the territory of the other constituent state will be able to obtain the title of the property he is currently using in exchange for the title deed of his property.

In the above case, if the house in Morphou is in an area subject to territorial adjustment, the owner will not be able to exchange the title deed for that of the property he is currently using. He will, however, be able to exchange the title deed of his property north of Morphou for that of the property he is currently using, if it is of comparable value.

If the current value of the property that the claimant is currently using does not exceed the value of the land north of Morphou by more than 50 per cent, then he will be able to exchange the relevant title deeds. If this is not the case, he will have the option of buying the deed to the house he is currently using only if the Turkish Cypriot owner agrees to transfer the title to the Property Board, choosing compensation for himself. In such a case, the Property Board will always give priority for sale to the current user of the property.