Latest Headlines

Four foreclosure bills unconstitutional

The Cyprus Supreme Court has ruled that four of the six bills voted by parliament on 6th September that limited the effect of the foreclosure bill on low-income groups are unconstitutional.

Four foreclosure bills unconstitutional

The Cyprus Supreme Court

CYPRUS can now receive delayed rescue funds from international lenders after the Supreme Court on Friday ruled that additions to new legislation on foreclosures were unconstitutional.

The Supreme Court ruled that the four additional bills were unconstitutional and violated the principle of separation of powers.

Attorney General Costas Clerides said the path was now clear for the government as there were no more legal obstacles to implement the law as it was initially proposed.

Nicosia did not receive its next tranche of €436 million in bailout cash after EU finance ministers last month said the foreclosure bill was not the one envisaged by the adjustment programme.

International lenders said they would wait for the court decision before deciding on their next review of the programme.

Since the 10 billion euro bailout was agreed in March 2013, Cyprus has been praised by the troika of lenders — the European Commission, European Central Bank and International Monetary Fund — for its diligent completion of loan requirements.

The government said lenders are unhappy with additions MPs attached to the legislation to dilute its effect on low-income groups and prevent mass repossessions.

President Nicos Anastasiades sent two of the bills back to parliament and four others to the Supreme Court to rule if they are constitutional.

The new law ensures that foreclosures cannot be indefinitely delayed, reducing the process from years to months, establishing procedures for valuing properties and auctioning them.

Four foreclosure bills unconstitutional

Readers' comments

Comments on this article are no longer being accepted.

  • @scruffy on 2014/11/02 at 4:57 pm – The insolvency framework is still being discussed no details are available (yet).

    As for the law on foreclosures – as they say “it ain’t over ’til the fat lady sings” (the fat lady being the Troika). Once it’s been agreed and passed into law, we should have full details.

  • scruffy says:

    @ Nigel.

    Will this liquidation framework be retrospective? Is it law or just recommendation? Will it apply to companies already in liquidation?

    Having spoken with the Debt Recovery Dept of BOC it is clear that they are only interested in making as much money from our plight as is possible.
    eg, They told me that if an outside investor offered more money than is owed by the developer, they would sell it to them and that we would have to deal with whoever they may be. They have NO LEGAL OBLIGATION to even discuss it with me.

    Is there any protection in this instance within this new framework?

  • @sandra on 2014/11/02 at 9:14 am – No-one is saying that low income families will be evicted from their homes as the banks have a number of alternative approaches available to them – see Curing the non-performing loans disease.

    The primary aim of the foreclosure bill is to force ‘strategic defaulters’ (those who can pay but refuse to do so as it takes so long for the lender to recover the property used as collateral) to pay up of face the consequences.

    The liquidation framework, which should be ready by the end of the year, should resolve other issues.

  • sandra says:

    The Supreme Court say that it is unconstitutional to try and protect low income families. I can see the logic of trying to protect them. Where will they go once they are evicted? However there doesn’t seem to be the same concern to collect monies owing from Developers and to inform the government offices to cease their practice of trying to exhort money from beneficial owners to clear Developers taxes before they will release Title Deeds, even when they have Specific Performance.

  • Chris Elliott says:

    There were dreams of building a Disneyland Park in Cyprus when it is already here.

  • scruffy says:

    @ Stevie R

    Yes, you are absolutely correct. Our bankrupt developer has already offered 60,000 euros to a couple who originally paid him 170,000 euros for their house.

    “Just to help you out of the situation” says he.

  • Richard says:

    The worst of the NPL’s ARE the developers!

    This is one of the worst cases of fraud / mis-selling in E.U history and it is up to those caught up in this ungodly mess to continue to fight for your rights, lobby your M.P.s (especially the ones who have taken little or no interest), start press campaigns and robustly push for compensation.

    If you don’t pipe up and stay shouting – you’ll be swept under the carpet.

    I won’t be going quietly – that’s for sure!

    Injustice is injustice is injustice. The end.

  • stevie R says:

    Lawyers, developers and estate agents who made a fortune from selling these properties are going to be able to buy them back at a fraction of the cost that they sold them for. They are the only people with money.

    The people who were misguided by these crooks will end up with nothing.

    What a cruel world

  • Mike says:

    I wonder if all those self confessed super patriotic, so called defenders of the little man will now do the honourable thing and stand by their convictions by resigning, seeing as their time wasting, futile and costly attempts to buy future votes from a gullible electorate has failed. Of course not, I wouldn’t believe for a minute that they would. Now I guess we will be subjected to the constant barrage of verbal diarrhoea claiming they did their best but those nasty Europeans have organised and conspired to strangle little old Cyprus just to ensure they get their hands on its vast unlimited hydrocarbon wealth and anything else of value.’What else could we have done, we are but a small nation facing massive, colonialist superpowers and a European Union intent of keeping us in chains’. I can hear it already – heaven help us. Pitiful but more disconcerting is that the fairy tale is repeated as a mantra until believed.

    Thankfully the President is recently reported to be standing up for what is perceived to be right. Let’s hope we are turning the corner and accepting responsibility for our past actions. I do hope so.

  • MartynG says:

    Hooray, a dose of Common Sense at last. Yes, there are clearly quite a lot of NPL borrowers, Cypriots as well as ‘other nationals’, who have been, sadly, conned/misled/deceived/ ill-advised/ naive etc. etc. where banks have, put simply, allowed the dreadful Developer Loans to prevail over what were believed to be Purchase Contracts giving clear Title to their acquired properties. Equally though there are many other loans, not afflicted by ‘prior title’, where borrowers, many Cypriot, have chosen not to make repayments, pay interest even, believing that they were ‘protected’ by loose, non-existent even, foreclosure/repossession procedures, that meant they could enjoy the use of, and/or income from, their properties without servicing interest, making repayments. This seems to have become part of a weird Cypriot culture where governments, banks, law-makers have simply allowed this to happen.

    Well at least RoC now gets it’s next tranche of Troika money and the Supreme Court have unblocked the ridiculous NPL situations that have been allowed, it seems, to become the Norm. However greedy, dishonest, stupid, lawyers, law-makers, ‘advisers’, brokers, and particularly, bankers have been in allowing all this to happen all these ‘situations’ need to be unravelled. The way is clear now, I believe, for this to begin. And a chunk of the latest Bailout monies should, in my view, be specifically directed at a deep analysis of what has been allowed to happen, it’s impacts and irregularities, and, in compliance with Troika directives, develop short, medium and long term solutions to help those who, however and by whomever, have been badly ill-advised, deceived through ‘no fault of their own’ to be offered remedial pathways to ensure Good Title can be established. The Cyprus government, banks, bank regulators, lawyers, developers, advisers, agents together let all this happen, they all ‘played a part’. Now they should commit and Act to start clearing up the Unholy Mess that they have allowed, encouraged even, to happen.

  • Andrew says:

    The MPs will all say “we tried”. The supreme court will say we are only upholding the law.

    What a shame these righteous people did not stand up and be counted when lawyers, developers, banks and real estate agents were all getting rich by assuring innocent home buyers that their homes were safe if they lodged their contract for specific performance.

    People were not warned of encumbrances by their lawyers. Sales contracts are effectively worthless if a developer fails to repay HIS DEBT.

    Some individual home buyers may well have overstretched themselves. But many thousands more were hoodwinked.

  • dimitri says:

    Finally a decision that actually makes sense! I know of too many people who just wont pay their mortgage or loan bills because they knew the banks were always too slow to act or show their teeth or too afraid to act as this was not good for their image…gloves are off now, not sure how the govt plans to handle the masses of homeless people? will the govt try to subsidise low cost housing for them who knows?, one thing for sure there is no lack of empty properties out there….albeit belonging to the masters of disaster – developers (hate to tarnish em all with the same brush but can’t help but do so)

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

  • Text size

Back to top