- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

MPs vote to protect home buyers (update)

MPs vote to protect home buyersPARLIAMENT on Thursday voted to ban foreclosures of homes whose owners could not acquire title deeds and could be at risk of losing their property because the developers could not repay their loans or have become insolvent.

The proposal was submitted by main opposition AKEL.

It was approved by 23 votes – AKEL, EDEK, Greens, Citizens Alliance, and independent MP Zaharias Koulias – to 21 from DISY, DIKO, and EVROKO.

The proposal amended a provision included in the main foreclosures law, which exempted such properties from repossession until April 30.

“Our intention was for it to be permanent so innocent people are not punished,” AKEL MP Aristos Damianou told the Cyprus Mail.

Such properties will be exempted provided the buyers paid at least 80 per cent of the sale price or have fully complied with their contractual obligations towards the seller.

According to the report drafted by the House Finance and Interior committees, the amendment was deemed necessary because the issue has not be resolved to date, despite the government’s pledge.

Resolving the matter is included in the terms of the island’s bailout.

The government has set up a task force, which must calculate the scale of the problem and propose solutions by the end of May.

The bill seeks to protect buyers who could find themselves in trouble as the crisis continues and more and more developers fold.

Developers’ land and buildings are counted as assets that need to be offset against their debt to banks, which gives lenders a claim on people’s properties that had been mortgaged by developers even if the buyers had paid for them in full.

The banks readily lent to property developers, especially between 2004 and 2008, fuelling an unsustainable frenzy of activity which roughly tripled prices.

The outdated legal framework enabled property developers to sell on property that was already mortgaged.

It is thought that some 30,000 people, Cypriot and foreigners, may be affected.