In recent months, the Cyprus Land Development Organization (KOAG) has been implementing new debt collection policies from citizens. In particular, low-income citizens, who bought KOAG properties using the rental method, did not pay their installments, resulting in the accumulation of large debts, the amount of which is estimated to reach a total of € 50 million.
The COAG, instead of evicting these citizens, claiming that they belong to the low-income strata and were also hit by the pandemic, decided to cancel the lease agreements and write off the debts. Affected citizens are then asked to pay rent to live in the property they had originally secured with a rental market and which is now owned by the organization.
According to the president of KOAG Marios Pelekanos, the new collection methodology was applied to a few dozen citizens, with encouraging results. Speaking yesterday to the parliamentary Finance Committee, which examined the organization's budget for 2021, Mr. Pelekanos said that 70% of home buyers from KOAP do not pay their debts, noting that, with the new plan that is being implemented, Debtors' children have the right to repurchase the home, noting that with the new methodology many borrowers choose to use the property by paying rent. He also said that there were cases of strategic defaulters, who rented the premises to other interested parties, without paying installments to the COAG themselves, adding that these citizens were evicted.
During yesterday's discussion, it was also mentioned that in the coming years KOAG will proceed with the construction of 1,000 housing units. Also, the construction of 15 units in Polemidia and 25 in Kokkinotrimithia is currently in progress, while the construction of a total of over 137 units is planned. Specifically, another 30 units will be built in Kokkinotrimithia, 16 in Kaimakli, 32 in Agios Nikolaos in Larnaca, 59 in Polemidia, as well as a number of units in other areas of Limassol. The units that will be built in Larnaca and Kaimakli are part of the Affordable Rent project. According to the president of KOAG, today the state pays € 12 million a year for the rent subsidy, pointing out that with the same money better solutions will be given to vulnerable households.
Besides, the deputy director of KOAG, Charalambos Iakovou, stated that the organization will proceed with a review of the criteria, so that the beneficiaries can be expanded. “We are trying to increase the amount of income for the middle income strata (to cover more people), while for the low income we will have affordable rent,” he said. He also said that, with the Affordable Rent plan, the maintenance and management of the properties will be done by KOAG.