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Property auction process may get harder for banks

Opposition parties trying to introduce legislation designed to slow down the property auction process by introducing twelve points, but have yet to get the required majority for it to pass.

Cyprus property auction process may get harderONLY a year after the legal framework behind red loans and the speeding up of the auction process by banks was strengthened and opposition parties are now pushing forward legislation aiming to do just the opposite.

On Friday, a draft bill will be tabled providing that the auction process gets slowed down. In other words, the opposition will now try to get back the weapons granted to banks last year.

Behind the draft bill are centre Diko, the Greens and the Solidarity Movement. But because the proposal does not get the required majority to be approved with the support of only these three parties behind the scenes talks are ongoing. These aim to get main opposition Akel and socialist Edek on board.

The draft bill seeks to change twelve points of the auction process, including the following:

  • Extending the due date from that of the notice of delivery from 30 to 45 days.
  • The appointment of two appraisers should be made from a predefined list at the office of the Land Registry Department’s Director so as to ensure the objectivity of the reports on a property’s market value.
  •  The mortgagee should be able to inform interested buyers over the mortgaged property instead of merely providing information if he/she so wishes.
  • Extending the time that the reserved selling price is maintained at 80% of the market value from 3 months to 6 months.
  • Prolonging the period after the notice that a mortgaged property will be auctioned from 30 to 45 days, so that there is sufficient time from the mortgaged borrower’s side to respond and for the best possibility of securing a sale at reserved prices.
  • Safeguarding the constitutional housing right within the context of an auction in proportion to provisions of basic law.
  • Deletion of the provision for the aggregation of interest and legal expenses as secured by the initial mortgage of a property prior to its breaking up into distinct new mortgages.

At the same time, the three parties argue that the proposed bill aims to eliminate the injustice created by the law and defuse the power of a prohibitive court order. In order to put the break on an auction today, it is necessary not only to issue a relevant court decree but also to register a new application procedure.

© In-Cyprus.com

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