Nearly 60 per cent of homes in the mortgage-to-rent scheme lack the necessary certificate of final approval, prompting urgent discussions by the House finance committee.
The committee discussed on Monday whether to exempt the state-owned asset management company Kedipes from this requirement, aiming to streamline processes and align with governmental procedures.
The Finance Ministry highlighted that the proposed regulation would enhance the approval rate of plan applications.
“Responsibilities on the property owner, both administrative and potentially criminal, if there is no certificate of final approval,” it stated.
“If the government is a landlord, it is not required to have certificates of approval,” the ministry added.
Adding to this, it noted that Kedipes should be relieved of these responsibilities for properties acquired under the plan, as “it is a government project which it was mandated to implement by a decision of the Council of Ministers.”
It also assured that any exemption would not adversely affect tenants, as Kedipes would absorb rehabilitation costs up to 15 per cent of a property’s value.
It cited an example where a property worth €200,000 could receive up to €30,000 for necessary repairs, especially if title irregularities are noted.
Among this regulatory backdrop, the goal of the proposed legislation is clear. To allow Kedipes, as the scheme’s implementing entity, to rent properties to former owners, especially those from vulnerable groups, without the typically required certificates.
This approach aims to help these individuals resolve their non-performing loans whilst maintaining their residence, thus preventing foreclosures.
However, concerns about the bill’s legal sturdiness were voiced by MPs, with Akel MP Aristos Damianou saying that it might not withstand legal challenges.
Diko MP Chrysis Pantelides, on his part said that the amendment concerns the exemption of Kedipes and not the property from the obligations provided for by the law.
Committee chair and Diko MP Christiana Erotokritou, said that there are several exceptions of state entities that are treated differently from citizens.
She added that “in case of damage to the property as a result of the exception granted, the state will be liable, as it owns 100 per cent of Kedipes.”
Meanwhile, Lambros Papadopoulos, Kedipes chairman, provided further insights in recent statements that in the context of the implementation of the project, about 25 rental contracts have been signed and around 100 applications have been approved.
He added that the eligible applications out of the total of about 3,400 submitted for participation in the project amounted to around 2,400.
In addition, he estimated that “with the amendment of the legislation being promoted, it would be possible for the number of those completing the rental process to reach up to two thousand within 2025.”
Papadopoulos noted that the relatively low number of applications approved, and properties transferred to Kedipes’ portfolio can be attributed to the time-consuming procedures at the land registry.