LEGISLATION easing the procedures for property foreclosures may be put to the cabinet for approval by next Wednesday so that it can then go to parliament and be passed within the month, Attorney-general Costas Clerides has said.
He was speaking after meeting with the troika mission heads in Nicosia yesterday, where they discussed amendments to the repossessions law, which the international lenders have made a precondition for concluding the current progress review of the Cyprus adjustment programme.
The lenders have indicated that not passing the bill on repossessions could jeopardise the release of the next tranche of international aid – injecting a sense of urgency into authorities.
As with all legislation, the Attorney-general’s office must first comb through the foreclosures bill to ensure it is legally airtight and not in violation of the constitution before it forwards it to the cabinet.
Clerides said that under the latest timetable, the bill needs to be sent to parliament as soon as possible so that it can be enacted into law by the end of July. The troika’s ongoing review mission (the fifth) is scheduled to be concluded on July 25.
Though not going into specifics, Clerides spoke of “different views” on the provisions of the bill between Cypriot authorities and the island’s international creditors, but said these differences could be overcome.
The chief aim is to amend existing legislation allowing for swifter repossession of properties, he stressed.
One of the suggestions reportedly put forward by the Attorney-general’s office is that the value of a property to be repossessed be determined conjointly through valuations by the lender (the bank) and valuers appointed by the property’s owner. Currently, the value of properties facing foreclosure is determined only by the bank.
Clerides acknowledged that the current repossessions system is both inefficient and time-consuming, but cautioned that any changes should not leap to the opposite extreme.
“It would be incorrect, just for the sake of speeding up [foreclosure] procedures, to do away with the balances and curtail some of the rights, primarily of debtors,” he noted.
The repossessions bill, along with a second bill governing insolvency, are designed to address the issue of mounting non-performing loans (NPLs), a huge burden on banks’ balance sheets. NPLs currently stand at 47 per cent of all outstanding loans, and in its last review the troika deemed their rising number the “single greatest challenge currently facing the Cyprus economy.”