PROVISIONAL trial dates have been set for UK buyers of property in Cyprus who were missold Swiss Franc mortgages, were ‘misled’ by their solicitors and are now facing demands for huge mortgage payments, threats of UK litigation and the very real chance of losing their UK homes.
Judicare Group, which encompasses a Spanish law firm, is currently acting on behalf of over 200 buyers and pursuing litigation in Cyprus, where the purchase took place, and not in the UK where the need first to establish jurisdiction adds an unnecessary timely, risky and costly step in the process.
If litigation is successful in the UK Courts it will still require the Cyprus Courts to enforce the ruling. Judicare believes that its approach will void the loan agreements and free UK buyers from untenable agreements. Many have found their monthly mortgage repayments more than doubled after the banks in Cyprus advised that clients take out a loan in Swiss Francs as this currency was perceived as stable at the time and provided a low interest loan.
The barristers from the Cyprus law firm Triantafyllides & Christoforou (TCA Law), appointed by Judicare, claim that in many of the buyers’ cases the Power of Attorneys used to sign the loan agreements were not valid as they were not signed in strict accordance to the legal process. In most cases, paperwork was validated without a Certifying Officer present, making the loan agreement and any other documentation void through the use of this instrument. In addition, the provisions of the local lending laws were not met.
A recent escalation in the process has also seen judgements by the Cyprus courts against UK buyers being enforced in the UK, putting their assets at risk, and so it is crucial that any client receiving a Writ of Summons from a Cyprus Court does not ignore the service and seeks legal guidance immediately.
Judicare estimates that there are over 20,000 people in the UK in similar circumstances from purchasing a property in Cyprus from 2003 to 2008.
Neil Heaney, CEO of Judicare, says: “Our clients feel as though they have been let down by everyone – the banks and IFAs who misadvised them and the lawyers who failed to protect them. People were sold a dream home in a beautiful country with manageable monthly mortgage instalments. Many believed that rental income would help with the costs of the property but they didn’t take into consideration currency fluctuations or the tough economic climate. Pursuing the courts in the UK only adds other difficult factors to the equation – time and money. We’re advising people not to bury their heads in the sand and to seek advice as soon as possible.”
Judicare provides advice on what to look out for when buying a property overseas:
- Find someone on your side. Appoint your own independent lawyer who is not connected to the developer or the agent and who acts in your best interest.
- Currency fluctuations. Take out a mortgage in the currency that you are normally paid in so that you are not at the mercy of currency fluctuations.
- Do your own due diligence. Go to the area where you are buying a property to ensure that you like what you are buying and its surrounding environment.
- Finance. Don’t base your investments solely on other people’s recommendations. Do your own research and calculate your costs and do a budget before agreeing to buy.
- Rental. If you are buying your property for investment, don’t imagine that you will have a full season booked out. Take into consideration that inevitably there will be dry periods during the year which you will need to build in to your costings.
- Mortgage. If you are buying your property for investment, don’t imagine that you will have a full season booked out with rent to help pay of your mortgage. Take into consideration that inevitably there will be dry periods during the year which you will need to account for.
About Judicare
Judicare is an international legal firm providing a wide range of legal services such as conveyancing and commercial litigation on and specialising in property investment recovery. In this role it works solely on behalf of buyers (not developers or agents) helping them to seek compensation in the event of problems with the purchase of a property overseas.The company has a network of lawyers around the world and currently has client cases in twelve international jurisdictions – Bulgaria, Cape Verde, Cyprus, Dominican Republic, Dubai, Egypt, Greece, Morocco, Poland, Portugal, Spain and Turks & Caicos Islands.
It has a track record of recovering money for clients and focuses on the best course of action to deliver the optimum outcome for its clients and not ‘litigating for litigation’s sake’.
@steve r – No the limitation period has not expired.
The government a one-year transition period and this was extended by a further six months until the end of this year.
So you have some time to take action. See Limitation time bomb six month fuse delay.
I made my agreement with Alpha Bank in Nov 2005. Can I assume that the limitation period of 6 years has expired. Even if you add the extra year it would have expired in Nov 2012. Can anybody advise.
@Gary – No, it isn’t a case of sitting back and waiting to hear what happens before deciding to act.
Limitation periods impose time limits on which a party must bring a claim or give notice of a claim to the other party. Once the limitation period has expired, a party is prohibited from starting a claim against another party.
For this type of claim, the limitation period in Cyprus is six years (but the one year transition period has been extended until the end of this year).
So even if you bought before 2007 you can still make a claim.
For anyone else who feels they have a case re foreign currency loans and the role of their bank & lawyer (est 20,000?), is it a case of sit tight and wait on the outcome of this case? If it’s successful, will this open a floodgate of similar claims?
@andyp – I think you are correct about paragraph 2. I have looked into this alternative route and when you read through the small print it does state that the UK company has no jurisdiction over Cyprus law and that a Cypriot solicitor may have to be used. This would incur an additional cost on top of the already high price this company are wanting to represent groups of people that want to protest. The trouble is which Cypriot lawyer do you trust. I have used 4 of these people so far and all they do is seem to frustrate the courts and the laws of the land but never seem to get any further.
Having been misled by a Cyprus lawyer who was subsequently found guilty by the Disciplinary Board of Advocates I wish everyone in a similar position good luck.
However paragraph two seems like a dig at another group’s choice of route. Should they not cooperate?