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

Bank opens dialogue in Cyprus property mis-selling

AT LONG LAST there is real hope for thousands of people following a move by Alpha Bank to lighten the burden on borrowers who have fallen into arrears by offering them a repayment moratorium due to the economic downturn.

The Bank refers to it as a “gesture of goodwill”. Furthermore, during a meeting held at the Bank’s Head Office in Nicosia on 24th October 2012 with George Kounis, Consultant with Maxwell Alves, Solicitors in the City of London, the bank has expressed the desire to have a dialogue with all concerned borrowers and confirmed its readiness to resolve matters in an amicable way. Other banks are expected to follow suit.

“We have argued all along that there is no point in going head-to-head with the banks,” said George Kounis. “Litigation is not the answer. Banks will listen to reason. We are now in the process of submitting settlement proposals to Alpha Bank for each and every borrower we represent. We do believe the banks will settle.”

The battle, however, is not over. Even if the banks write-off substantial amounts from these debts, there is a lot that needs to be fixed in order to give these borrowers a fair chance of keeping or selling these properties. Properties have been sold with rent guarantees that were not honoured, amenities such as a Golf Course or a Spa that never materialised and there are numerous other irregularities. Banks can help by funding and putting pressure on developers but they cannot fix everything.

The Government can do a lot by diverting cash buyers, particularly from China, to purchase completed properties instead of pushing them to off-plan sales. “We believe that this is a mistake. They need to clear the existing stock of properties if ghost complexes are to be eliminated and prices start picking up again,” said George Kounis.

The Government must in any event eliminate the mis-selling environment. “If developers were forced to have separate title numbers for each unit in a development before they were even allowed to commence sales, if they needed the same licence as estate agents to sell property so that they could lose it if they mis-sold, if unlicensed sales agents and financial advisers felt the full force of the Law, if lawyers were properly disciplined and if banks were properly supervised, mis-selling would disappear overnight,” George Kounis declared.

Maxwell Alves have written to various bodies in Cyprus following up on these issues including the Central Bank of Cyprus, the Cyprus Bar Association, the Attorney General, the Cyprus Securities and Exchange Commission and the Minister of Interior. In particular they have formally complained to the Competition and Consumer Protection Service (CCPS) at the Ministry of Trade which ultimately is the authority that needs to co-ordinate and enforce action against rogue traders but the CCPS will not act despite the fact that it is their duty to do so under the provisions of the EU Directive on Unfair Commercial Practices which Cyprus incorporated into Law (103(1)/2007).

“Cyprus must decide whether it wishes to be in the EU in both body and spirit. They cannot use the European logo to attract investors and then treat them as if they are in an eastern bazaar when they try to complain,” said George Kounis. “We hope to persuade the authorities otherwise we will report the failure to implement to the EU Commission”.