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Home News Troika push repossessions bill

Troika push repossessions bill

reposessionLEGISLATION easing the procedures for property foreclosures may be put to the cabinet for approval by next Wednesday so that it can then go to parliament and be passed within the month, Attorney-general Costas Clerides has said.

He was speaking after meeting with the troika mission heads in Nicosia yesterday, where they discussed amendments to the repossessions law, which the international lenders have made a precondition for concluding the current progress review of the Cyprus adjustment programme.

The lenders have indicated that not passing the bill on repossessions could jeopardise the release of the next tranche of international aid – injecting a sense of urgency into authorities.

As with all legislation, the Attorney-general’s office must first comb through the foreclosures bill to ensure it is legally airtight and not in violation of the constitution before it forwards it to the cabinet.

Clerides said that under the latest timetable, the bill needs to be sent to parliament as soon as possible so that it can be enacted into law by the end of July. The troika’s ongoing review mission (the fifth) is scheduled to be concluded on July 25.

Though not going into specifics, Clerides spoke of “different views” on the provisions of the bill between Cypriot authorities and the island’s international creditors, but said these differences could be overcome.

The chief aim is to amend existing legislation allowing for swifter repossession of properties, he stressed.

One of the suggestions reportedly put forward by the Attorney-general’s office is that the value of a property to be repossessed be determined conjointly through valuations by the lender (the bank) and valuers appointed by the property’s owner. Currently, the value of properties facing foreclosure is determined only by the bank.

Clerides acknowledged that the current repossessions system is both inefficient and time-consuming, but cautioned that any changes should not leap to the opposite extreme.

“It would be incorrect, just for the sake of speeding up [foreclosure] procedures, to do away with the balances and curtail some of the rights, primarily of debtors,” he noted.

The repossessions bill, along with a second bill governing insolvency, are designed to address the issue of mounting non-performing loans (NPLs), a huge burden on banks’ balance sheets. NPLs currently stand at 47 per cent of all outstanding loans, and in its last review the troika deemed their rising number the “single greatest challenge currently facing the Cyprus economy.”


  1. I wonder if a bill on the foreclosure of mortgaged properties is going to address the problem. The developers were given in many cases loans without security and many of these are now NPLs. We don’t know what proportion of the total falls into this category but it can only be addressed by going after the developers’ total assets, which includes those buildings without title deeds to which no developer mortgage has been attached.

    Remember those signs all over Cyprus “title deeds guaranteed”?

  2. A bill on foreclosures and private auctions of mortgaged properties is expected to be finalised on Monday (today) between the Cypriot authorities and the Troika mission (EC, the ECB and the IMF), which is on the island for the fifth review of Cyprus` economic adjustment programme.

    – Cyprus News Agency

  3. Yes, anyone would be completely mad to buy a property here, (far better to rent), and if you have bought a property you have probably already gone mad, like I have!

    We are like passengers on an airline flown by drunk pilots (the bank managers) who crashed our plane, and now the crash investigators (The Troika, Banks, MPs) want any survivors, (no matter how crippled), to be denied justice, and instead pay for the plane to be repaired, despite wrecking our lives, and not delivering the service expected.

    It is quite unjust that the banks/lawyers/MPs can do whatever they like, not lose a minute’s sleep over the consequences of their corrupt actions, whilst we victims continue to be threatened by these ‘criminals’ with loss of our properties, loss of our livelihoods, loss of our possessions, and damage to our mental (and physical) health. And it’s been going on for the best part of 5 years.

    Whilst the current policies continue, I will not part with any more money in regards to taxes, fees, penalties, inflated repayments, etc etc. I will only reconsider if I have an affordable, self financing arrangement, with clean title deeds to a completed property, and with collateral limited to the property in question. Yes, I must be mad to consider anything in Cyprus any more!

    As someone said before, in Cyprus the corrupt are let off, whilst the innocent pay. Oh, and who said there was no corruption at the banks? (see below, taken from report June 13 in CPN)…

    (What happened to loans they granted to themselves as individual directors of the bank?)

    CREDIT facilities of more than €1 billion were granted in 2011 by the two large banks to members of their own Boards, which were subsequently proven to have exceeded the limits set by the law. Among the credit facilities granted by Bank of Cyprus is that of former Chairman, Theodoros Aristodimou. Facilities amounted to €317 million in 2011. In the case of Cyprus Popular Bank, they are the credit facilities associated with former board member Platon Lanitis. Mr Lanitis had facilities of €347 million by the end of 2012. Former CEO of Bank of Cyprus, Andreas Eliades had facilities of €4.4 million in 2011 million, of which €1.1 million was non-secured. Former CEO of Cyprus Popular Bank, Efthimios Bouloutas, had facilities of €2,2 million in 2010. The figures of Cyprus Popular for 2011 include an amount of €105 million of Vassilios Theocharakis, of which €75 million are presented as non-secured. Former head of the risk management of the Bank, Demetris Spanodimos had facilities of €14 million in 2011.

  4. I’m a buyer I’m waiting like a hyena and I’ll buy something after the bloodbath. It will be a long term investment.

  5. Thanks Nigel! I think we will all not be to surprised at their ingenuity and imagination in what ever comes next.

  6. Andrew I agree with you 101%, regardless of what anyone else says on this issue it could have been nipped in the bud right from very the start had the lawyers done their job properly and behaved ethically.

    The lawyers knew what was going on but took the line of “But this is Cyprus” no doubt with brown envelopes flying around.

    Keep the pressure on the EU especially the lawyers part in the is fiasco, once the lawyers start feeling the heat things may well change.

  7. The seemingly unique (and certainly highly questionable!) Cyprus practices of ‘overlapping loans’ and, it seems overlapping securities – developer and purchaser – raises all kinds of issues that will impact on banks’ attempts to action foreclosure and repossession. It is with this conundrum that the politicians will have to wrestle.

    Who are the banks going to be going against? Developer? Purchaser? Both?

    Certainly, per this Forum, Christmas Eve, 2013 the Troika are keen to ensure the banks get after the corporates/real estate developers : quote:

    “Troika calls for the non-performing loans of the top 22 corporates and real estate developers to be dealt with by “Special Projects Division” within the Bank of Cyprus to get them performing again – or seize collateral.”

    Note: “or seize collateral”.

    Back here to the overlapping securities: how ARE the banks going to deal with these?

    On the subject of Valuations:

    I can empathise with both Graham and Michael’s comments below: in my banking experience, not in Cyprus!, banks considering Action on loans/debts secured on ‘properties’ seek valuations on both ‘open market’ and ‘forced and/or distress sale’ bases (‘distress’ is a term used mainly by bankers – and estate agents – to clear out some of their really sticky situations, ones that will leave sizeable shortfalls of sale proceeds – plus additional agents and others fees of course!) against outstanding loan balances.

    Currently most would, I think, agree there is virtually NO ‘open market’ in Cyprus, if there was there would be more owners knuckling down and achieving sales. All we see are – largely – properties on the ‘market’ for years and hardly any interest from prospective purchasers. Once the repossessions start to hit the market, we can, I reckon expect to see the markets sink yet further, more properties, tainted by repossession, many, sadly, in something well below the ‘Good Condition’ par.

    Even if the Troika requirements are going to be fully met, I suspect they won’t!, this is going to be a long climb out of the ever decreasing circles of debt, decline and disappointment…..and……

    Sadly, I think Curmudgeon (below) has hit some of the key nails on the head. One way or another those near the top of the pile will, again, be treated gently, those poorer, often innocent, TD-less folk will get their homes repossessed, sold off for unbelievably low prices – and even then left to say how they are going to repay their ‘residual loans’.

    Little wonder then that the prevailing Cyprus government and political, financial and professional bodies have been ducking this key Troika requirement for so long! Either there will be a fudged, but just about convincing, political ‘holiday’ solution later this month or the next tranche of a Troika funding will be missed.

    We can only wait with bated breath to learn of Nigel’s pieces of ‘important information’ to be revealed from Paphos, Monday!

  8. Every lawyer in Cyprus who failed to warn their clients of hidden developer mortgages should be thrown out of the profession. These lawyers are a disgrace and should be held accountable. If this is not possible in Cyprus then international help should be sought.

  9. @UBoat on 2014/07/19 at 9:04 am – Re the Title Deed process. I received a report from a lawyer in Paphos yesterday advising me that the Paphos Land Registry has unilaterally imposed a new condition on purchasers before it will transfer the property in question to their name. I don’t want to say anything more at the moment – I’m waiting for further information, which I hope to receive on Monday.

  10. @Whirlybird Rtd on 2014/07/19 at 11:05 am – The repossessions will be as a result of non-performing loans not debts that developers (and others) have incurred.

    Debts are registered against the Title as ‘memos’ where a Court has issued a judgement in favour of a creditor ordering the debtor to pay a specified amount of money.

  11. Can anyone enlighten me as to whether the repossessions of property include the debts that the developers incur in the process of not paying their bills to the government regarding memos served on them for IPT etc. and other debts to the community.

  12. It will be interesting to see how this unfolds.

    Having given the instigators of the financial collapse plenty of warning of repossession, just what do they expect to find when they knock on their doors. Not a lot!

    Multi millionaires with all their associates in high places will have salted away all but a few thousand.
    Given past legislation has always been written to protect the guilty and rob the innocent I don’t think we are going to see anything different.

    Heart felt sorrow for the thousands of people who have paid in full for their properties but don’t have their Title Deeds. I cannot even begin to understand the stress of waiting to see if they get a knock on the door.

  13. As Graham has implied leaving valuations to Banks and agents will not fill anyone with confidence based on the historical overinflated valuations applied to date. Current ‘prices paid’ by the local market as against any foreign possibly money laundering market may be a more realistic approach but perhaps impossible to apply. It will however mean that collateral held against NPLs is possibly almost worthless with obvious implications for the banks and the state.

    No doubt the AG’s office will do everything in its power to duck and dive and use smoke and mirrors to ensure any new legislative wording will appease the troika, protect the developers and banks and explain why they are forced by external pressure to repossess someone’s home that they have paid for in order for it to be sold by the bank without actually being responsible for it or addressing the problem. Perhaps experience over the years has made me a cynic – or not, time will tell.

  14. That’s all well and good, BUT if they can force the Cyprus Government to speed up this process. WHY cant they force them to speed up the completion of developments and the Title deed process. Then may be they will get more money in from that ???

  15. Surely the value of the properties facing foreclosure should be determined by the market and what somebody is prepared to pay, above 2 suggestions will just lead to the property being overvalued and remaining unsold and the bank getting none of their money back.

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