Trapped buyers still saddled with developers’ debts

This week, the Cyprus Borrowers Association (Syprodat) expressed “disappointment, discouragement, and a sense of failure” on behalf of trapped buyers who find themselves paying off the debts of property developers from whom they purchased their homes.

Despite fulfilling their financial obligations and paying the full purchase price, these buyers have not received ownership of their properties due to delays in acquiring title deeds. Without these deeds, they remain at risk, as developers’ outstanding loans could lead to the foreclosure of the properties in question.

Syprodat noted that many buyers, even those who have fully repaid their loans, continue to be burdened by the developers’ unresolved financial obligations. In a statement, the association suggested that banks have “turned a blind eye” to the loan agreements they were supposed to enforce with developers.

Rather than ensuring that developers used funds from property sales to repay construction loans, banks allowed them to divert the money for other purposes, according to Syprodat. This, the association claimed, raises serious concerns about the accountability of the banks involved.

Syprodat also questioned whether the predicament of nearly 10,000 trapped buyers could have been avoided if banks had not been complicit in the developers’ actions. Many buyers have fully paid off their loans but remain trapped due to the developers’ unpaid debts.

The association urged the government, along with banks and credit acquisition companies, to urgently address the issue through new legislation. In July, Syprodat began discussions with various political parties to explore the possibility of introducing laws to resolve the issue of trapped buyers.

Syprodat stressed the gravity of the situation and called for immediate action from both the government and political leaders. This followed statements from Interior Minister Constantinos Ioannou, who affirmed the government’s commitment to finding a legislative solution.

Ioannou had stated that the government is “determined to make every effort to find a solution for trapped property buyers, who are now at risk of losing their properties.” These efforts gained further urgency after a recent court of appeal ruling declared certain provisions, which allowed trapped buyers to obtain ownership titles, unconstitutional.

The government has since announced plans to introduce a new bill, expected to be submitted to parliament later this month.