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Thursday 1st October 2020
Home News Dreams of a home in Cyprus turn into a nightmare

Dreams of a home in Cyprus turn into a nightmare

WHEN Steve Noonan, a legal adviser for Cleveland Police, bought his two-bedroom apartment off-plan at the Cypriot development of St Nicolas in the town of Chloraka, near Paphos for only £160,000 in 2008, it seemed too good to be true.

“And the problem is, it was too good to be true,” he says, particularly when a debt collection agency in the UK started sending him letters, texts and phone calls demanding mortgage repayments on his Cypriot property, or his family home in Skelton, Yorkshire and other assets would be repossessed by bailiffs.

The deal involved a UK-based agent, the major Greek and Cypriot Alpha Bank, and the Cypriot developer Alpha Panareti. Mr Noonan and his wife Eugenie say they were told that repayments to Alpha Bank would be only £560 a month through a 25-year interest-only loan.

“I didn’t have the full amount, so this suited me. The plan was to use the apartment for about six weeks of the year for holidays, renting it out the rest of the time to pay the mortgage. I thought that if, in 25 years’ time, its value had risen, it would benefit our three children, now aged from 18 to 37,” Mr Noonan explains.

Alarm bells rang when his mortgage repayments more than doubled from £560 to £1,200 a month after the bank insisted on Mr Noonan taking out his mortgage in Swiss francs, deemed to be a stable currency at the time. He’s now paying more than £300,000 for his £160,000 apartment that’s thought to be worth only £65,000 today. In total, Mr Noonan estimates he’s £82,000 out of pocket to date and he’s yet to hold a title deed in his hands.

He also says that the bank was signing off payments before his apartment reached the appropriate stages of build. “The developer would say the building is now at foundation level, so it needs the next tranche of money, without the bank going and checking that was the reality,” says Neil Heaney, an ex-Premier League footballer, who now helps overseas investors through his property investment recovery company Judicare ( “In some cases I’ve come across, loans were drawn down by 90 per cent and ground hadn’t even been broken.”

In a claim, which could also be the trump card to extricate some British investors from crippling loan agreements, it has been alleged that Cypriot lawyers may not have complied with crucial legal formalities.

According to a Cypriot barrister Christos Triantafyllides, who has been employed by Judicare: “For power of attorney to be legally valid by Cypriot law, signatures must be ratified by the certifying officer to make sure he knows the person or sees identification that proves who he is. If this is declared to be illegal, then all other documents signed through the use of power of attorney are also illegal. This would make the loan agreement invalid.”

It’s very important that British buyers are released from these loan agreements such as the one in Mr Noonan’s name, adds Mr Triantafyllides, with claims believed to be running into the millions. “It’s not good for Cyprus or the property industry,” he adds. “But it is good that the legal mechanism to safeguard the rights of people is in place.”

British buyers in Cyprus often suffer from a false sense of security, says Richard Way, the editor of Overseas “You drive on the left there, English is practically the Republic’s second language, you can shop in Marks & Spencer, and most significantly, much of the English legal system introduced there before independence in 1960 remains.

“It’s easy to see why Brits felt at ease buying on the island and weren’t as wary about legal representation or finer details of mortgage contracts as they should have been.”

Mr Way urges people thinking of buying in Cyprus to seek truly independent advice. This will strike a note with restaurateur Paul Sutton, who’s part of a class action with 19 other Britons in a case also involving Alpha Bank which is progressing through the courts. In 2006, he bought two properties from developer Solterra at Sinoro (a hotel turned into a luxury apartment complex) near Paphos, and at Polyxenia in Pernera, eight miles from Ayia Napa.

Mr Sutton bought his two-bedroom apartment at Sinoro for £175,000 and his beach townhouse at Polyxenia for £255,000. Similarly, his Swiss franc loans repayments have doubled, and debt collectors seeking to confiscate his home and assets in Cottingham, East Yorkshire have also plagued him after he stopped paying his Cypriot mortgages on the advice of lawyer Stefano Lucatello from Kobalt Law.

“The statements sent by the bank, listing extra charges that I and my accountant didn’t understand, claim I still owe £179,695 on the Sinoro apartment, which is more than I paid for it in the first place.

“Equally, after regularly paying £800 a month mortgage for two years, I’m being told I owe double the amount I paid for my townhouse at Polyxenia as well,” says Mr Sutton, 60.

An added issue in Mr Sutton’s story is claims that Eastern European workers (including some of Solterra’s builders) are living in the unsold Sinoro apartments, which has allegedly led to damages.

Sinoro homeowners have reported the “destruction” of the gardens, pool and some apartments and claim their homes have been illegally inhabited by workers.

“This means that I’ve had no rental income for two years, as no one wants to rent there,” adds Mr Sutton, who says the developer, when confronted about the unwelcome guests in the development, has dismissed his concerns.

Mr Lucatello says the wider implications across Cyprus of alleged mis-selling of mortgages and potentially negligent legal work “could bring down the (Cypriot) banks”.

He also hopes bringing these issues to the forefront will prompt the government to sort the problem of title deeds in Cyprus, which can take 10 to 15 years to obtain and in some parts of the island there are major land disputes taking place.

Alpha Bank, Alpha Panareti and Solterra were all approached for comment but failed to respond.


  1. So Cyprus is officially in recession.

    The credit ratings agencies have reduced Cypriot sovereign ratings to junk status.

    Interestingly, Moody’s have factored into their ratings decision what they term ‘a deterioration in asset quality in Cyprus and Greece’, meaning that the the banks would need a capital increase equivalent to more than 20% of GDP to return to their present level of Tier-1 capital.

    Unemployment is rising fast and the building industry is on its knees.

    So people in the Legal, Property Development and Governmental areas with further help from the likes of Alpha Bank, and developers have done a really good job of making Cyprus an attractive place to invest in property!

    Long may they reap the benefits of all their hard work!

  2. I tend to agree with Steve. I bought in June 2005 and there were so many warnings out there that I avoided most but not all of the tricks and scams. It was also widely publicised by 2005 that without a tourist license one couldn’t just rent out a property to the holiday market and without a certificate of final completion title could not be transferred. The single ownership regulation was publicised and if I am not mistaken Nigel was as informative as anyone could ever have been on a number of sites. As a consequence I declined everything offered except what I ended up with and it still took 3 years to receive title.

    Sad for many I am afraid and I sincerely sympathise but perhaps the lure of a profit was too great and clouded cold judgement.

  3. The problem is not the Swiss Franc mortgage per se. It’s as much the continuing, long-term, decline in the value of the British pound. The “mis-selling” way out of trouble has worked well in the UK for mortgages, pensions and endowment life assurance mortgages, etc., but I’m not so sure it will be as effective in Cyprus, especially considering that mortgages in foreign currencies routinely contain clauses about risks such as adverse exchange rate movements. Convincing a Cyprus court that a buyer was “forced” to sign a foreign currency mortgage will be an interesting new development on the island

    It’s also sad to see that the “buy to let” and “buy two apartments and double your profits” games are still being played. With all the publicity and warnings on the internet and in the media, buyers are still getting caught. What does that say about similar warnings regarding title deeds, planning contraventions and developer mortgages?

  4. So if the law was such that non-nationals could buy more than one property, but couldn’t actually legally own more than one property, why was this not fully explained to the purchasers by their lawyer before they signed the sales contracts?

    Would purchasers have actually bought more than one property if they had known they couldn’t legally own more than one?

    Isn’t this just another example of unfair Consumer practices that contravene EU regulations in Cyprus?

  5. Re. Costas Apacket comment, I sympathise with Mr. Noonan and Mr. Sutton. We also arranged a mortgage (loan) with Alpha bank, as it was approved in January 2005 we visited to take delivery in June.

    Our developer had not been paid so we were not allowed into the apartment but offered another one to stay in for which we were CHARGED. The reason given was that Alpha bank had received an instruction from H.O. that lending against a sales contract was not to be given as it was not safe to do so. Our developer then had to guarantee our loan from the Bank to receive their money, our loan was recommended in Swiss Francs also. We then had one week to furnish the apartment. We to could not afford the repayments, due to the crash of the £ against the Swiss Franc. Now the Bank has filed for repossession but will the guarantor pay? I doubt it.

    We also bought a town house as an investment, the same Agent and Lawyer fully knowing the law on two property purchases by non residents. However Nigel replied that it was lawful to purchase two but we could only own (have title deeds for one) sounds like a smoke screen to obtain more funds, check mate.

    Over £150k of our money has gone down the Cypriot toilet.

  6. Some of us are bringing a test case in the UK against those acting as agents in the UK under EU consumer law.

    The EU Directive – The Brussels 1 Regulation allows consumers to bring action in their country of domicile when they acted in the UK.

    There is a jurisdiction hearing this Friday so there will be more to tell then. This action was only filed in December so is moving at a pace that the European Convention on Human Rights would approve of.

    The tide is on the turn and these unscrupulous lawyers, developers and banks can no longer hide behind the protection that the slow court system in Cyprus gives them.

  7. Martyn.

    Not much more can be added to your comment other that note that this island is beyond the pale.

    Everyone involved, government, developers, banks, lawyers and estate agents, need to be sent to Coventry. The few who ARE trustworthy will have to suffer the fate of the bad apples.

  8. Steve Noonan’s story almost mirrors my dealings in Cyprus. Most disturbing is the fact that Alpha Bank released all the loan funds without checking that the property was finished.

    It has cost 40,000.00 euro just to build retaining walls around the property to stop it sliding down the hill. We all had to contribute to have the electricity supply put in and there are no roads, lighting or footpaths etc not to mention any site of a title deeds.

    The builder has done a runner but will Alpha Bank be chasing him. I don’t think so

  9. A headline that doesn’t contain hyperbole. Anything that so attacks peace of mind is truly the stuff of nightmares.

  10. Slowly, scandalous abuses in the funding of developments, the mis-selling of mortgages and some extremely dubious legal/banking practices, added to, sadly, naivety of many British and ‘other national’ purchasers, are now emerging; these are clearly only the tip of a potentially massive iceberg that will likely soon rock the Cyprus banking, legal and government ‘regulatory’ systems to the core.

    And the attendant snowballing of adverse publicity associated with all this will likely pummel the already shaky Cyprus property markets, and economy, far into the future. Slowly the ‘chickens are coming home to roost’ and one can only shudder at the likely size of the underlying problems and longer-term impacts on the status, reputation and economic viability of the country as a whole.

    The Cyprus government ought to be addressing all this as a matter of extreme urgency, taking ownership of this whole problem and organising some kind of ‘rescue’ initiative. BUT…..????

  11. Regards Mr Sutton’s purchase of two properties in 2006, I thought this was illegal in Cyprus until just recently?

    Did his lawyer not mention this either?

  12. Cypriot lawyers appear to have a collective disdain for crucial legal formalities.

    The headline should read “Dreams of a home in Cyprus turn into a nightmare (for thousands of buyers)”

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