Cyprus Property News for home buyers and real estate investors

Friday 23rd July 2021
Cyprus Property News logo
HomeProperty NewsSwiss franc loan time bomb

Swiss franc loan time bomb

Cyprus: Swiss franc time bombALTHOUGH the “The Limitations Law (66(1) 2012)” came into force in the Republic of Cyprus on 1st July 2012, MPs voted in 2013 and again in 2014 to extend its transition period – and this transition period will now expire in less than two months on 31st December 2015.

The Limitations Law imposes time limits on which a party must bring a claim or give notice of a claim to the other party. Once the limitation period has expired, a party is prohibited from starting a claim against another party.

The 2012 law provides for different limitation periods depending of the nature of the actionable right. For example:

Actionable Right
Limitation Period
Breach of contract Six years
Damages for nuisance, negligence or breach of Statutory Duties Six years
Defamation or malicious falsehood One year
Tort Actions Three years
Action for remuneration of self-employed persons (e.g. lawyers, doctors, architects, etc.) Three years
Bills of exchange, Bonds in customary forms, cheques, promissory notes Six years

Among those who have benefited from earlier extensions to the law are those who bought property in Cyprus with loans denominated in a foreign currency (most notably Swiss Francs). As the vast majority of these loans were arranged before the end of 2009, time is running out for them to decide whether to bring a claim against the bank for mis-selling.

Unless the Cyprus government decides to a further extension, borrowers will have to bring a claim against the lending bank by 31st December 2015.

Recent developments

On September 21st, Members of the Cyprus Parliament asked the Central Bank of Cyprus to investigate the cost to local banks of converting Swiss Franc mortgages Euro at their original exchange rates. The Central Bank was given two weeks to communicate with the banks and provide its opinion. Parliament warned that legislation regarding the case would follow even without an answer from the Central Bank.

Subsequently, at the end of October, ratings agency Moody’s warned that the forced conversion of Swiss Franc loans would cost the banks at least €250 million and would make the restructuring of non-performing loans more challenging.

We await further developments.


  1. Hi,
    I am not sure if I meet the criteria to make a claim against the bank. Is this going to cost me money to do?

    Thank you

    (Editor’s comment: You will need to have you loan agreement and related documents reviewed by someone conversant with the law – i.e. a lawyer. They will then give you their opinion as to whether you have a sound case against the bank or not and how to proceed. If you don’t have a good case they will probably negotiate with the bank on your behalf. If you do have a sound case and you wish them to they will pursue the bank on your behalf.

    And yes, this will cost you money.)

  2. I had the same situation 2 years ago with the Swiss Franc mortgage, I independently dealt with the Bank and asked for a final settlement figure, they eventually gave me 40% off if paid the full amount within 3 months which I did and saved 160K.

    I know how frustrating it is, but as I was in a position to be able to get funds and pay the mortgage off, this was a great weight lifted off us.

    I would not use solicitors, as the banks are more amenable dealing with you direct.

  3. I have finally had my Swiss Franc Loan restructured by Alpha Bank after 2 years of waiting. I paid the inflated monthly payment on my 15 year mortgage until it got unserviceable. For 2 years I have paid what I could afford which was around 50% of the loan.

    Alpha Bank called me in last week stating that the committee had agreed to the request. They have allowed me to carry on paying the reduced rate for a further 2 years and then the monthly rate went up from €650 to €2540 per month for the next 82 months.

    In short the mortgage has been extended to 19 years. Take into consideration the interest rate hike, over the period I am now paying 3 times the original borrowing and the property has dropped in value by 60%. Smart move on my part. I am not prepared to pay a further £20K to join one of these groups to challenge Alpha Bank over mis selling with little or no chance of winning.

    Although I love Cyprus to pieces I wish I had never seen the place.

  4. Reference Neil’s comment on the timescale.
    Can we clarify this very significant statement.
    Does this indicate if I have received a written reply in 2014 of my personal complaint that any action I take on this matter is relevant to the date of the initial correspondence (Not from any legal lodged complaint?)

    So I can continue to correspond with the bank beyond 2016 even if it is not given a further stay of execution.

    PS, appreciate all commentators input and experiences shared.

    (Editor’s comment: This point was highlighted in an earlier article ‘Limitation time bomb awaits British home buyers

    “To avoid possible confusion, the law does not seek to prevent claims being made in actions which had not been started before the law was passed.

    Furthermore, the time period runs from the date the cause of action arose, which is not necessarily the date the contract was entered in many cases.”)

  5. The six year time limit starts to run from the moment a dispute arises from the loan; not from the day it is signed. Therefore the deadline is not a blanket provision which applies to every loan. Of course if an individual feels he or she has a potential claim against the loan and/or the bank he or she should raise it at the earliest opportunity and not because of any limitation period.

  6. Hi Asha,

    We have been negotiating with Alpha bank through the lawyers – Its like hitting your head against a brick wall. I popped in a few weeks ago to check on what’s happening with our Swiss Franc compensation claim- Basically was told they would review every claim on its merit!

    Just over 1 year we have been trying to broker a deal!

    With time barring date for claiming Swiss Franc compensation looming ( year End ) we have instructed our Lawyer to register our claim in the necessary courts & if necessary we will fight Alpha bank all the way! May be finish up in the EU courts!


  7. If the time came to file a case against Alpha Bank, is it better to file in Cyprus or in UK.

    It’s nearly 8 months since I am negotiating with Alpha bank through the lawyers and I have been asked to sign so many forms about my income and my expenses which I did and still there is no end to this matter.

    Any comment of advice will be appreciated.

    (Editor’s comment: You’d best take legal advice on this, but I suspect Cyprus or possibly both.)

  8. Hi Scruffy,

    Can you share with us what company/solicitor she was using?

    Is there anything that can be done for people that have signed their mortgages in 2007? BOC offered us only 12.5% which is nothing.

    We stopped paying this year in the spring.

    Editor: any advice?

    (Editor’s comment: I hope didn’t make a unilateral decision to stop paying and that you did so having taken legal advice as the bank will probably take action against you to recover the debt. There are several groups helping those with Swiss Franc loans who believe they’ve been mis-sold. An Internet search will soon find them.)

  9. Thanks for feedback Editor. I think the point I’m trying to make (perhaps not very well) is if you have clearly lodged a complaint directly with your bank before the deadline then would this not be taken into account in future matters concerning the ‘statute of limitations law’?

    (Editor’s comment: No – any complaint you made to the bank would not be taken into account.

    If you were to make a complaint now, all the bank has to do is delay its response until after the Statute of Limitations law kicks in at the end of the year.)

  10. @ Steve R

    It is simply not true to say that the groups formed to fight the banks are having no effect and out to make money.

    Only this morning my neighbour told me that she has received a letter from her solicitor to inform her that the BOC has agreed a settlement and she is in line to be refunded thousands dating back to her original mortgage date and her remaining mortgage balance to be changed to Sterling. (She had a CHF mortgage).

    It is important therefore that anyone in this situation heeds the warning in this article, that time is running out and get their claims in.

  11. @ Steve R. I think sufficient numbers of people all over the globe are now voicing their frustration with “the establishment”. I’m not talking either about groups of anarchists on the street that (predictably) always make the news bulletins. I’m talking about the millions now actively searching for better ways of doing things.

    Your language is very important in any situation – and the banks have NOT “played a blinder”. They’d acted with dubious moral ethics, unscrupulous/unregulated practice and deception. That’s CRIMINAL INTENT or if you prefer ORGANISED RACKETEERING. Charles Ponzi would have approved of this – and some of these banks have ultimately shot themselves through both feet and their heads as well. The trust that should exist between a lender and a seller has been compromised and hopefully – we will now see a return to the Glass-Stiegel acts / re-mutualisation of the banks put in place as a result of the Wall St crash of 1929 – when a simple casino mentality amongst financiers then ruined the world economy and led to the Great Depression.

    Ordinary citizens are NOT 100% to blame for this – and people MUST remember that simple, clear FACT.

  12. @ Gary – it’s not merely “strange” but downright preposterous people should have to. The banks have done very nicely thank you out of CHF loans and if you look at Alpha Bank in particular – they are not suffering financially – quite the reverse in fact.

    One piece of information I need to check though – you have six years from when the bank first informed you (the lender) you were in breach of contract with the terms of the loan – not 6 years from when you took out the loan.

    There is a chance they could extend the 12m period again – and I personally think that could happen. With so many loans still in NPL status – and the troika still seemingly refusing to architect much to help those trapped in NPL’s – I cannot see where this situation will miraculously right itself. If the banks had done the decent (ha ha) thing right from day one and worked with individuals to re-structure the loans properly, come clean over massively inflated property valuations and sort out the EPIC mess with the developers – most of this could have been sorted out reasonably and fairly without a small army of lawyers. But still – as nearly everyone and their cousin in Cyprus is a lawyer of some sort or other – I guess it keeps the cash tills rolling in the absence of attempting a sensible and well thought through economic recovery.

    Personally – I think it’s high time the U.K government and the E.U regulatory frameworks stepped in on behalf of U.K citizens and called time on the banks. I don’t know what the Troika are doing on these visits. Any ideas anyone?

  13. The system has made it virtually impossible for an individual to take on the banks purely on a financial point of view. The individual will have to spend more on solicitors and court fees than what the loan would cost to pay off.

    There are a few groups kicking about that in my opinion are giving false hopes to its members. If it would cost the banks 250 million euros just to revert the loans back to, let’s say sterling then do you think that a judge would rule in favour of mis-selling. It would cost the banks significantly more than 250 million and make the re-structuring of NPLs impossible. These groups are charging a small fortune just to get on their books and offer nothing but a feeble challenge against the establishment. All this is doing is delaying the inevitable. We must all just accept the fact that the banks have played a blinder here. Would all this have come about if the Swiss Franc had stayed strong and we would have benefited from a favourable interest rate. I don’t think so.

  14. Seems strange that every single person who has been mis-sold a banking product should have to lodge a complaint, via a lawyer, directly in court. Do the banks not have a formal complaints process to follow?

    (Editor’s comment: Yes – banks do have a complaints procedure but do you really think they’ll decide in your favour?

    Besides this article is about the Statute of Limitation Law – not an internal banking complaints procedure.)

  15. If there is no further extension or developments in parliament, then what are the options for a party to lodge a complaint? Is it sufficient to raise directly with the bank in writing or must it be submitted via a lawyer?

    (Editor’s comment: Your lawyer will have to prepare and then file a claim against the bank at court.)

Comments are closed.

Sign up to receive our free Cyprus property newsletter

We guarantee that we do not spam and will not divulge your email address to any third party.

Read our privacy policy for more information.

Cyprus property transfer fees

Property capital gains tax (CGT) calculator

EUR - Euro Member Countries

Top Stories