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CPAG’s Denis O’Hare interview with Rosie Charalambous

Cyprus property action group spokesman Denis O’Hare was interviewed on Cyprus radio channel CyBC 2 by Rosie Charalambous about the Island’s unfair commercial practices law.

EARLIER this evening Denis O’Hare of the Cyprus Property Action Group spoke with Rosie Charalambous on the CyBC Radio 2 programme ‘Round and About’ about the unfair commercial practices law and plans to flood the Island’s Consumer Protection Service with complaints.

Mr O’Hare started by explaining the background to the Unfair Commercial Practices Directive:

“The (EU) unfair business to consumer commercial practices Directive was developed in 2005 and member states were given a couple of years to implement it. It was transposed into Cypriot law effective 12th December 2007.

Part of the Directive mandated the (EU) states to inform consumers of this law and the avenues of redress. Here in Cyprus, it was well and truly hidden; even today it is not mentioned on the Consumer Association’s website and just a couple of weeks ago the head of the Consumers’ Association said that he’d never heard of the law.

The law makes it a criminal offence for a business not to inform consumers of material facts that would change their behaviour towards a product.”

Rosie Charalambous: “They might not have bought the property had they known it was mortgaged.”

Denis O’Hare: “Exactly, exactly!”

Click here to listen to the 14 minute interview between Rosie Charalambous and Denis O’Hare.

Readers' comments

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  • Andrew says:

    @denis. Thanks for your time. I have lodged my complaint with the CCPS and am awaiting their reply.

    In the meantime many people may be able to draw some comfort from the Landmark ruling by the Cyprus Supreme Court against a Paphos lawyer. This link shows the full 20 page outcome in Greek but can be translated by Google

    Maybe all lawyers who have failed to inform their clients of a developer mortgage should take note.

    http://www.cyprusbarassociation.org/cms_file/cms_file_gr_106.doc

  • Denis O'Hare says:

    @Andrew

    Firstly, what we can say is that it will be difficult, to say the least, if not impossible, to complain to the CCPS about a current unfair commercial practice (of withholding title deeds) by a developer which is no longer in business.

    Secondly, at the stage you are envisaging a developer’s business will have already been wound up via a court order and the unfortunate buyers will have already been allocated their share of the developer’s mortgage and the Official Receiver will have demanded their own substantial fee. We have buyers already in this position.

    Thirdly, this debt will continue to escalate at a minimum of 12% with the interest being capitalised (i.e. added to the original debt) at twice yearly intervals – interest upon interest, upon interest!

    Only when the debt nears the distressed sale price for the land plus the building will the bank be compelled to take possession – having made a very handsome profit on the original loan in the meantime.

    It would be therefore our advice for buyers who do not yet have their Title Deeds to complain to the CCPS whilst the developer is still in business in order to get something on record. We are informed that under an EU Directive the state is ultimately responsible for any financial or other implications as a result of non-enforcement of a Directive.

    Unfortunately, when a developer goes bust all their assets (including all properties not yet transferred via Title Deed to buyers) would go into the Official Receiver’s pot regardless of whether those properties were encumbered by developer mortgages or not. We are sure there must be laws which decide the merits of any claims against the pot of assets – but as we know the laws here are treated rather like menu items and to suit the vested interests, so it might very well be a case of pot luck!

    Finally, complaints which are turned down by the CCPS, which is the EU designated local remedy, can then be escalated to the European Court of Human Rights. We cannot see any bank being allowed to seize a property which is sub judice at the EHCR Andrew.

    We also are of the view that if tested in the ECHR the current lending practices to developers and the seizure of buyer’s properties could well be found to be grossly illegal.

    As we see it, a bank, through a legal agreement between them, grants a developer a mortgage on the land (a bare field) knowing full well that the developer will deceive buyers and sell that same piece of land to buyers through sales contracts which also calls for the building of dwellings.

    This sales contract does not in any way include the developer’s bank as a party yet somehow under the current laws and practices here in the event of developer default the bank can have access to the ‘bricks and mortar’ in that sales agreement.

    Remember also that these buyers have done everything legal, paid in full, used a Cyprus Bar lawyer, lodged their contract (and paid the fee) at the Land Registry having been told that this gives them total protection and that Cyprus is a safe place to buy property.

    Sorry my answer was so long Andrew – hope you (if you don’t have your deeds) and others will complain to the CCPS.

  • Andrew says:

    @Nigel and Denis. When a BANK decides it is time to take possession of a house and land that is already paid for in full by a hapless buyer. Is there any way that the proceedings by the BANK, can be brought to a halt if the validity sale is in dispute with the CCPS.

  • Denis O'Hare says:

    Dear All

    In the light of all these very good questions it appears that more clarification is needed – it will be developed and placed on the CPAG website in the next couple of days.

    Please understand however that there are quite a number of varied situations to be covered and therefore will evolve in the light of experience.

    However, in respect of what will be covered clearly, the CPS is restricted to the enforcement of the Directives below and only against the stated provisions in those Directives. Our focus will be on the Directive 2005/29/EC at this juncture.

    Finally, we are also in very new territory and this is why the central CPAG logging of buyers’ complaints and the responses given by the CPS is also vital in understanding how we best use the CPS.

    Thanks Nigel for your assistance.

  • James JH Lockhart says:

    @Nigel,

    Nigel many off us have contacted the Ombudswoman in many cases she did not reply or in other cases she replied once then buried her head in the sand.

    In the same way dealing with lawyers as Andyp has pointed out has the Disciplinary board chaired by the AG ever found a lawyer guilty.

    When Good/Honest lawyers see how the AG/CBA act many if not all prefer not to get involved in.

    This is the problem facing so many there is no effective person/department in Cyprus willing to provide justice to home owners.

    A very sad state for Cyprus to be in.

  • @andyp – it may be more appropriate to complain to the Ombudswoman.

    From the CCPS website:

    The CCPS has been designated by the Council of Ministers as the CPC Single Liaison Office of Cyprus. The CCP Service has also been designated as the Competent Authority responsible for the enforcement of the following eleven (12) out of fifteen (15) European Directives and one (1) Regulation embodied within the CPC Regulation:

    1. Directive no. 84/450/EEC relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising.

    2. Directive no. 85/577/EEC to protect the consumer in respect of contracts negotiated away from business premises.

    3. Directive no. 87/102/EEC for the approximation of the laws, regulations and administrative provisions of the Member States concerning consumer credit (this Directive has been repealed on 11/6/2010 by the Directive no. 2008/48/EC on consumer credit).

    4. Directive no. 90/314/EEC on package travel, package holidays and package tours.

    5. Directive no. 93/13/EEC on unfair terms in consumer contracts.

    6. Directive no. 94/47/EC on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis.

    7. Directive no. 97/7/EC on the protection of consumers in respect of distance contracts.

    8. Directive no. 97/55/EC amending Directive No. 84/450/EEC concerning misleading advertising so as to include comparative advertising.

    9. Directive no. 98/6/EC on consumer protection in the indication of the prices of products offered to consumers.

    10. Directive no. 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees.

    11. Directive no. 2002/65/EC concerning the distance marketing of consumer financial services.

    12. Directive no. 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market.

  • AnnDee says:

    I simply don’t believe lawyers weren’t aware of this Directive. They all get the Government Gazette which publishes all new laws. I don’t believe the head of the CCPS. He sounds to be an idiot if he runs an organisation but doesn’t know the rules.

    They are not idiots. They all knew, but daren’t let the cat out of the bag.

    This is a rip-off as big as Bernie Madoff’s, but nobody has gone to jail yet.

  • andyp says:

    Sorry Nigel. I was not inferring that CBA were part of the property transaction mess but rather a completely separate issue:-

    The CBA charge consumers a fee for a service which does not seem to be provided either fairly nor timely, in my opinion. As such do consumers not have a right to complain via the CCPS if the service is not up to scratch?

    At the end of the day we consumers have contracted with The CBA and paid the fee requested by them to to carry out a service.

    Just a thought.

  • To answer some of the questions raised:

    @James JH Lockhart“Can you clarify please what happens if the House purchase contract is prior to 2007?”

    According to Article 3 of the Unfair Commercial Practices Directive:

    “This Directive shall apply to unfair business-to-consumer commercial practices, as laid down in Article 5, before, during and after a commercial transaction in relation to a product.”

    If you have not received your Title Deeds then you are at the stage of ‘during a commercial transaction’ – so yes, you can complain to the CCPS.

    (You can find the Directive at http://www.news.cyprus-property-buyers.com/wp-content/uploads/2010/11/EU_Directive_2005_29_EC_EN.pdf )

    @Richard“I’m still a little confused though regarding the position of any dodgy practices committed BEFORE Dec 2007?”

    Please see previous answer.

    @andyp“Therefore should CCPS complaints not be submitted against all three? (Developer, lawyer & Cyprus Bar Association)”.

    No – The Cyprus Bar Association was not responsible for withholding material facts about your purchase.

    @Kufrahdog – If the CCPS fails to reply you should

    a) Let CPAG know – form on its website.

    b) Complain to the Ombudswoman

    @out of the frying pan“Do I have a case against this lawyer?”

    Possibly yes, but not via the CCPS. You’ll need a lawyer to investigate and give an opinion.

  • Richard says:

    Thanks guys – I listened carefully to Denis’s interview with Rosie.

    I’m still a little confused though regarding the position of any dodgy practices committed BEFORE Dec 2007?

    The interview hinted that even though the law wasn’t changed formally until then – the EU made Cyprus aware in 2005 – so there could be a strong argument that CBA / Banks /Brokers / Developers and the rest of the whole gaggle of them involved should have known about this.

    So – with the hinting in mind;

    If they did – they were outside of the law
    If they didn’t – they were all professionally ‘unconsciously’ incompetent

    Either way – there should be some redress – especially the lawyers – we know they have been largely useless at protecting many people’s interests.

    Have I got this correct?

    Would MEP’s champion anyone’s cause if they bought with advised CHF mortgages before Dec 2007?

    Maybe a short PDF guide/flowchart here would be useful perhaps?

  • andyp says:

    Having downloaded and skimmed through the Act if the principle also applies to your lawyer it must also apply to the CBA.

    I was charged a fee of 68 euros nearly two years ago and to date nothing. The CBA charges a fee for a service which is, in my opinion, money for nothing. Anyone out there had a result in their favour or even just a result?

    Therefore should CCPS complaints not be submitted against all three?

  • Kufrahdog says:

    Should the CCPS fail to respond to the submission of a complaint in connection with the title deed issue, is it possible to achieve any sort of progress through a court order?

  • James JH Lockhart says:

    Nigel

    Can you Clarify please what happens if the House purchase contract is prior to 2007 ?

    Also I think in a number off cases it has been Criminal Fraud (with the Authorities turning a blind eye)

    What happens if the CCPS state it was a criminal Fraud and do nothing ?

  • out of the frying pan into the fire says:

    I have a problem with a lawyer who abused the power of attorney and signed me up for a set of plans (that I knew nothing about and still don’t) with “A” well known Paphos Developer. Do I have a case against this Lawyer ? .

    Well done SIR , to Nigel and Denis.

  • @Martin – yes, I believe the developer (and the agent and the lawyer) may all have a case to answer.

    Not mis-selling as such in the case of the developer, but fraud.

    And as for the agent & lawyer, for professional negligence! One of the first things your lawyer should have checked was that the person selling the property actually owned it!

  • andyp says:

    Thanks Nigel. My CBA complaint has been in the system for nearly two years without progress.

    I was just trying to think of another course of action whilst I await the musings of The AG’s office.

    No doubt others may have taken the same course as I via The CBA but this Trade Union, in my opinion, seems unable or unwilling to take action on behalf of victims.

    CCPS might therefore be a good option in addition to CBA procedures providing this is after the 2007 date in these particular circumstances.

  • Martin says:

    I was interested to read the item from Denis O’Hare regarding the Unfair Commercial Practices Directive.

    I ‘bought’ a property in Cyprus through an Estate Agent based in Paphos to be developed/built by a Company also based in Paphos.(This Company ceased trading before the property was started to be built)

    My situation does not come under the property/prior mortgage situation. In my case, I ‘bought’ a property, through the Agent and progressed with the Sale and a Contract of Sale was formulated by my Solicitor and forwarded to the Developer for signature along with a substantial deposit (25% of the property price).

    After several weeks the Contract failed to arrive and my Solicitor pursued the developer. It was at this point that I was made aware that the property did in fact belong to another purchaser and was registered at the Land Registry in Cyprus under their name. I was very angry by not being made aware of this situation and asked for my money back. The Developer refused. I have correspondence from both the Agent and the Developer that they were aware of this situation at the point of sale. Do you think I may have case to pursue against the Developer, but particularly the Agent, under the Directive that you referred?

  • jon frazer says:

    I wonder if Cyprus’ plan B is to simply pay the EU fines that would (I assume) be imposed following the almost inevitable non implementation of the directive.

    I understand they do this already in other areas, where it is economically expedient to so do, and, for example, in the case of fines for pollution caused by oil burning power stations, it is the consumer who pays.

    Another line they might take is to claim to be overwhelmed by complaints, which they may decide could take x years, and then going as slowly as possible.

    They are world-beaters in prevarication, having had decades of practice with the Cyprob.

    However, all praise to Denis and CPAG for this initiative, and for Nigel’s excellent site.

  • @andyp – I would expect that any advocate buying something on my behalf would carry out the same checks as if he/she was purchasing something for themselves.

    According to the Cyprus Bar Association’s Code of Conduct:

    “Subject to the rules of law and the code of conduct, advocates are obliged to always defend their client’s interests in the best manner possible, even with regard to their own personal interests, those of their colleagues or the profession in general.”

    If you consider that an advocate has not defended your interests, i.e. he/she failed to advise you that the property on which your property was built is mortgaged then:

    a) They would be breach of the CBA’s Code of Conduct. (A ruling on this matter was made in the Supreme Court last year when it found a Cypriot lawyer professionally negligent).

    b) They could be called to account under the unfair commercial practices law by the Consumer Protection Service.

  • andyp says:

    Having listened to the broadcast and read some of the data, might the same directive apply to the “Advocate” that one employed?

    Could similar complaints be lodged with CCPS against our “advocates” as we entered into a contract with them and they accepted money to conclude purchases on our behalf?

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