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Alpha Panareti slapped by CCPS over unfair contract

The CCPS has ruled that a contract to purchase an apartment between Alpha Panareti and a Scottish woman breaches the provisions of law 93(I)/1996 on unfair terms in consumer contracts.

Alpha Panareti protestors at the NEC in Birmingham

Alpha Panareti protesters at the NEC in Birmingham

THE COMMERCE Ministry’s Competition and Consumer Protection Service (CCPS) has deemed the terms of a contract signed between land developers Alpha Panareti Public Ltd and a Scottish individual over the sale of a one-bedroom flat abusive, following complaints filed by the buyer.

The contract, signed in September 2009, stipulated that the Scottish woman agreed to buy the flat at a price of €215,577, payable in four instalments, but included clauses that were ruled unjustly favourable to the sellers.

In a May 2011 letter to the ministry’s Consumer Protection Service, the plaintiff first raised her claim of having been misled into accepting the terms of the contract and asked that it be nullified.

Following initial investigations, in November 2011 the service denied her request, claiming it could not conclusively establish Alpha Panareti’s responsibility for the buyer being misled.

Also, the service said, it emerged from its investigation that the transaction fell outside its remit as the buyer had bought the flat not for her own use – in which case she would be classed as a consumer – but as an investment vehicle.

Subsequent back-and-forth between the buyer and the service, which included the intervention of the European Commission in June 2013, prompted the service to re-examine the case in light of relevant European regulations, forcing the re-evaluation of the plaintiff’s claims.

The final decision, issued on September 10, 2014, vindicated the buyer’s arguments as it found the contract to contain terms that were abusive and unjustly favourable to the seller.

Specifically, one clause stipulated that the buyer was responsible for full payment in instalments, the last of which payable “on possession of the property by the purchaser,” expected to be effected in September 2011.

Another allowed the seller a six-month “grace period” – or extension – for completion, as well as listing a host of uncontrollables as possible reasons for delay in completing construction, such as acts of God and local authority requirements, which would not burden the seller with any penalty.

The terms of the contract also allowed the seller a five per cent “variance” between the precise area and size of the property delivered compared to the architectural plans, with no provision for price adjustment.

Further imbalances allowed the seller the right to cancel the contract and retain any monies paid, while restricting the buyer’s right to cancellation and refund requests.

Another distortion identified by the service was the omission of a hard date relating to the seller’s obligation to furnish the buyer with title deeds, thus allowing the seller to indefinitely restrict the buyer’s right to ownership.

Finally, the Service found that a clause in the contract failed to offer “clear and detailed” explanation of the buyer’s rights, with a vague reference to the “provisions of the Sale of Land Law.”

Editor’s comments

The decision by the CCPS results from breaches to the Unfair Terms in Consumer Contracts – Law 93(I)/1996, in which Cyprus transposed European Directive 93/13/EEC into its national law.

The CCPS is further investigating whether the complainant’s contract with Alpha Panareti and the Alpha Bank breaches the provisions of the Unfair Business to Consumer Commercial Practices – Law 103(I)/2007 , in which Cyprus transposed European Directive 2005/29/EC into its national law and which became effective 7 December 2007.

The Director of the CCPS has advised the complainant to proceed with court proceedings against Alpha Panareti.

Three years ago the Cyprus Property Action Group (CPAG) encouraged those who had purchased property in in Cyprus and who were experiencing problems to complain to the CCPS.

This is the first reported case in which a complainant’s case has been decided favourably by the CCPS.

Readers' comments

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  • @SB on 2014/09/29 at 10:39 am – Anyone should be able to do this for you, providing you have granted them Power of Attorney. But I guess it will be easier to ask your lawyer.

  • SB says:

    Thanks Nigel. We aren’t in Cyprus so can’t go to the Land Registry ourselves. Would this then need to be done through a lawyer?

  • Adam Lomas says:

    Whilst I would tend to agree with Nigel Howarth’s comment that the Scottish lady who has apparently gained CCP backing for a case against Alpha Panareti, has a “slam dunk” case, I would advise caution before we all leap to think a precedent has been set.

    I bought a house in 2007 and have so far had to decline the services of two (Pafos based) lawyers, who I considered gave me bad (or no) advice which has left me exposed.

    I now use a Limmasol based lawyer with an International reputation. They have advised me that the chance of ever getting a judgement against a Paphos lawyer are tiny and that money poured into trying to get one is likely to be “wasted”, the way in which the legal system protects it’s own everywhere is legend, but here in Pafos it is the best example of total endemic corruption I have ever come across.
    we must continue trying, but my lawyers have advised me that “Justice is for the rich”, and not universal.

  • @SB on 2014/09/28 at 4:50 pm – The CCPS has taken administrative action against Alpha Panareti (whatever that means). But as it is the the agent of the government, it does not act on behalf of the complainant.

    If the complainant wishes to take this further, she will need to take her case to the court – and armed with the fact that the CCPS has upheld her complaint, I would say she has a ‘slam dunk’ case against Alpha Panareti (but I am not a lawyer).

    For more details on the CCPS ruling, please see Ο περί Καταχρηστικών Ρητρών σε Καταναλωτικές Συμβάσεις Νόμος Ν.93(Ι)/96, – Καταχρηστικές Ρήτρες σε Σύμβαση Αγοράς Ακίνητης Ιδιοκτησίας (Google translate will give you an English approximation).

  • @SB on 2014/09/28 at 5:03 pm You will need to get a Title Search from the Land Registry; this will highlight all claims lodged against a property (including mortgages). See the article New title search procedures for information and forms.

  • SB says:

    Nigel – how would I know if the developer has a mortgage on the property? I’m trying to work out which letter to send to the CCPS. Many thanks

  • SB says:

    This is great news in principal but what does it actually mean? If they are now taking Alpha Panareti to court, are they trying to simply nulify the sales contract or get their money back?

  • @Janner on 2014/09/25 at 3:34 pm – Please click on the link to the Cyprus Property Action Group in the article where you will find draft letters of complaint prepared by Denis O’Hare.

  • Janner says:

    Nigel,

    How do I go about complaining to the CCPS?

    Is there a template letter available?

  • Costas Afortune says:

    This would be the same developer that has hundreds of people who were duped with unfair contracts on St George Hills and developments that money was taken for but not even built yet! It is most likely a well known local Greek lawyer that looked at all these contracts and told us “everything is fine, all standard stuff and nothing to worry about”! People had POA supposedly witnessed and stamped with an official seal even though they were not even on the island.

    Alpha Bank have also allegedly broken lots of rules and regulations and it now seems as the brown stuff is starting to hit the fan. If anyone is reading this and thinking of buying on this once beautiful and trustworthy island “Don’t”, it is not worth the sleepless nights that will follow.

  • Dunn Good says:

    The Alpha Bank have now secured a charge on my U.K. property for three times the original loan in 2005 encouraged in CHF. However they have through their Lawyers agreed to accept the net rent from the property towards the debt (out of court agreement). At what stage do they revert to the guarantee the developer gave for the loan in order for him to get his money from the Bank ?

    Our original application for a loan was accepted by the Bank in Feb. 2005 then retracted in favour of a three party agreement with the developer. All this was presented to the Court in the U.K. to no avail, we feel gutted, as we do not have the funds to continue fighting as you recommend Nigel.

  • Mike says:

    mh – never underestimate the low levels we, as a nation, set ourselves and constantly fail to achieve.

    To your lawyer you were a source of income, I suggest nothing more – nothing less.

    Well done the Scottish lady for her tenacity, a lesson to everyone. I do however question the inflated price of the product in 2009 but perhaps I am, as has been suggested, locked in a time-warp.

    Fighting For Justice – Never give up as to do so will only encourage those you have an issue with.

    They rely on a war of attrition resulting in the complainant giving up, hence the painfully long years it takes to get anything done. It’s by design and so sadly for many – obviously works.

  • mh says:

    The Alpha Panareti contract was written up by a well known Paphos lawyer. I used his wife, a fellow lawyer, with the same firm to buy my property. It was her job to scrutinise this very contract and do other research such as developer debts outstanding on the land.

    She never informed me of the conflict of interest, I wonder why?

  • @Andrew on 2014/09/24 at 5:49 pm – I agree. People must not give up they have to persist like the Scottish woman in the article. The link to the Cyprus Property Action Group I posted in the article has sample letters that people can edit and use to make their complaints.

  • Andrew says:

    Similar unfair terms and conditions will most likely appear in most buyers contracts. All those who have already been turned down by the CCPS, should ask them to re-evaluate their case.

    Additionally, any contract which hides a developers debt must be classed as unfairly biased in favour of the seller. Especially when that same contract was drawn up and witnessed by a Cyprus Lawyer.

    Well done that independent Scottish woman!

  • @Fighting For Justice on 2014/09/24 at 3:17 pm – You sound as if you’ve given up “fighting for justice”. You must NEVER, NEVER give up.

    I have been at these property issues for more than 15 years – I have absolutely no intention whatsoever of giving up.

  • Fighting For Justice says:

    What on earth is the point in complaining if the only result is to be told to take the matter to court even if you get a favourable result? We all know the courts merely exist to wear you down to the stage of giving up.

  • Pantheman says:

    About time too. It is time some of these developers got their comeuppance, but I fear that many of them will not be in a position to make any compensation.

    Good on the plaintiff to see it through.

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