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Europe says developers in breach of EU Directive

MEP Ashley Fox’s questions in the European Parliament concerning unscrupulous developers in Cyprus who make misleading claims regarding building and planning approvals are in breach the ‘Unfair Commercial Practices Directive’.

IN A REPLY to questions raised by MEP Ashley Fox in the European Parliament the Commission has replied positively saying that misleading claims made by unscrupulous developers concerning Cyprus’ planning and building regulations is an unfair commercial practice and therefore in breach of the ‘Unfair Commercial Practices Directive’, 2005/29/EC.

Building and planning regulations fall within the competence of the authorities of the Member State which should ensure their appropriate application and enforcement (monitoring and control of application and inspection).

The EU’s intervention is only justified in cases of potential discrepancy regarding the conformity of the national practices with the principles of the Treaty and EU secondary law, in particular in the domains of the Internal Market of construction products, energy efficiency and renewable energy sources, natural resources and environmental protection as well as health and safety at work.

According to the principles of the Treaty, all the provisions of building and planning regulations should be applied in an impartial, transparent and proportionate manner on the territory of competence of the authorities, whatever undertaking or citizen is concerned by these provisions.

As to the possibilities of judicial redress which expatriates living in Cyprus might have after being sold an illegal construction, the type of action available and the way to introduce it are governed by the national procedural law of the Member State where the competent court is located. European Union legislation only intervenes to determine which court is competent in a dispute involving two or more Member States and ensures that a judgement rendered in one Member State can be recognized and declared enforceable in another Member State. More specifically, Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters1, provides that a claimant can bring an action for damages against the other party either at his place of domicile or at the place where the damage occurred unless the parties have agreed that a specific court should have jurisdiction to settle their dispute. Where the dispute concerns rights in immoveable property, e.g. the transfer of ownership, only the courts at the place where the immovable property is located are competent to hear the case. From the limited facts submitted to the Commission, it would seem that where British nationals residing in Cyprus are seeking redress against the seller of an illegal construction, an action for damages would have to be brought in the Cypriot courts unless the parties have agreed in the contract of sale or otherwise that their dispute should be settled in the courts of another Member State.

Directive 2005/29/EC2 provides a legal framework applicable against unfair business-to-consumer practices, including those for immovable property. Claiming that a planning or a building approval has been authorised by a public or private body when this is not the case, or not complying with the terms of such an approval, endorsement or authorisation is considered an unfair commercial practice. According to the Directive, Member States shall ensure that adequate and effective means exists to combat unfair commercial practices. However, the Directive leaves to Member States the choice of the concrete legal and administrative measures to be put in place. Cyprus has adopted such transposition measures by the Law on the Control of Misleading and Comparative Advertising of 2007 and the Law on the Unfair Commercial Practices from Businesses to Consumers of 2007.

References

1 OJ L 12, 16.1.2001
2 OJ L 149, 11.6.2005

Further reading: Property in Cyprus (click on the ‘Answers’ box to the right of the question)

Readers' comments

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  • paul ruse says:

    This is indeed very interesting, but it will do little as the Cyprus government will ignore it.

    So as I have written before, use this information to press your Euro and UK MPs both in the UK and those in Cyprus. And why not write to David Cameron and his side kick. The more we do, pressure will mount on the Cyprus government to change their property laws and they will have to talk to CPAG and others.

    And Peter is right buy in Cyprus and lose all your savings your house you will be lucky to be left with your underwear.

  • Steve says:

    If it were Holland or the UK or Germany, we could all start celebrating, but Cyprus??? Cyprus has reneged on lots of EU laws as well as on the timetable for implementing EU measures in the Treaty of Accession.

    They just pay the fines and carry on doing nothing, consequently the only way to benefit from this EU decision is to take the transgressors to court outside Cyprus.

    Before everyone runs for his or her purchase agreement, I will predict that they will all say that the jurisdiction for disputes is ………Cyprus. Mine does

  • Peter says:

    It makes little difference the Cyprus Property Market on which so many jobs rely, and on which the Country relies on as the second biggest income earner is dead in the water.

    The Government will never sort out the title deeds mess as many of the Government Ministers have an invested interest.

    The word is out… “Buy in Cyprus and you will lose your house and your savings”

  • jon frazer says:

    This is a very interesting development. Thank you Nigel for pursuing this matter.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

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