In what appears to be a deeply troubling development, a Vulture Fund is demanding more than €625,000 from an elderly British woman, despite the fact that she no longer owns the property in question. This outrageous demand raises serious legal, ethical, and moral questions.
The woman had received the Title Deed to her property through Cyprus’ “Trapped Buyers” law, before the Court of Appeal ruled it unconstitutional last year.
The law was designed to protect innocent buyers who had paid for their homes in full but could not secure legal ownership due to their developer’s unpaid debts. Importantly, she sold the property four years ago, and it is now fully registered under the name of a new owner.
Yet, a Vulture Fund has come knocking, claiming a right to money tied to a property she no longer owns, under a legal scheme that was valid and upheld at the time of issuance. She now fears she may be forced to sell her UK home to settle a debt that was never hers to begin with. How is this justice?
Not an isolated case
Worryingly, this appears to be far from an isolated incident. Several former buyers who received their Title Deeds under the same 2015 law have also reported receiving demand letters from the same Vulture Fund.
Strangely, instead of pursuing the current property owners, this Vulture Fund is targeting former buyers – individuals who complied fully with the law, sold their properties, and moved on with their lives. Is this strategy a legal loophole – or a deliberate intimidation tactic?
Legal grey zones and government silence
Following the June 2024 ruling by the Court of Appeal, which found the Trapped Buyers law unconstitutional, Cyprus’ Interior Minister publicly reassured buyers that Title Deeds already issued could not be taken back. However, he failed to clarify whether those same buyers might still be pursued for their developer’s debts.
That omission has left thousands in legal limbo.
In April this year, Nicos Tornaritis, Chairman of the Parliamentary Legal Affairs Committee, sent a strongly worded letter to the Association of Credit Acquiring and Credit Servicing Companies (ACACS), urging Vulture Funds to pause auctions, sales, and repossessions until legal clarity is reached.
But has this appeal been ignored?
A question of legitimacy and morality
So let’s ask the critical questions:
- Is this Vulture Fund demanding money under false pretences?
- How can it be legal to pursue former property owners for debts tied to a developer’s loan?
- What protections are in place for the 11,000 buyers who obtained Title Deeds before the law was overturned?
And most worryingly, what about those who purchased these properties second-hand? These new buyers, and even their lawyers, likely have no idea they may be sitting on a property burdened with legacy debt claims.
Time for urgent action
This situation is not just a legal mess, it is a moral failure. Vulture Funds, with no connection to the original transactions, are exploiting the confusion left behind by incomplete legal reforms and weak political will.
The Cypriot government and parliament must act immediately to clarify the legal status of these claims, shield innocent buyers, and hold these predatory Vulture Funds to account.
Otherwise, thousands of homeowners – past and present – may be forced to pay the price for someone else’s debt, all while being misled into thinking their ownership was secure.
Have you been affected by a similar issue? Share your story in the comments below or get in touch.
Hi Nigel, as you know, following the 2013 Cyprus financial collapse around 2015-2016 I wrote a couple of Risk Watch articles in Financial Mirror that spoke favourably about how the then newish government of Anastasiades had made rapid strides under the Troika bailout conditions against fraud and corruption and even the Cyprus Property Scandal swamp, with all its non-performing loans, bank incompetence, multiple selling fraud, title-deed non-issuance etc etc. Remedial actions were looking promising.
Nevertheless, I also warned of what I referred to as the curse on Cyprus of potential recidivism or back-sliding, of which there were already worrying signs.
This latest grotesque parasitic try-on example by a ‘vulture fund’ regrettably vindicates my forewarning.
Of course, it is NOT the ORIGINAL LENDER who has sent these cruel letters, but an “Asset Manager”, better known as a Debt Collector, in more accurate parlance.
The Lender, knew or should have known that the Borrower would construct and sell “houses” and to do so would enter into legally binding contracts to do certain things, observe certain laws and to transfer individual legal title to the Buyers, who paid up in full when the house was ready for occupation. So, The Buyer has paid in advance for the title and legal compliance with the Purchase Contract. There is thus LIEN on the title and the subject land has already been purchased by the Buyer, there is only an outstanding condition to be fulfilled…but it has not been in most of these cases, actually.
So, how is it possible for a Debt Collector to even identify a debt, of the levels referred to because in the full knowledge of the Lender, the “Collateral” was going to diminish in value over time, bit by bit AND the Lender should have managed the loan to the Developer accordingly, as the collateral diminished in value, but the sale to and giving of obligations to the BUYERS.
The Lenders did not do this, so when the Developers failed or made themselves fail, there was NOT adequate collateral to cover the loan, because much of that value, had, with the full knowledge of the Bank, been sold off.
What we are now seeing is the belated attempt by an agent of or successor to the Bank, seeking to repossess that value that was sold quite legally and with the Lenders full knowledge and concurrence, quite a while ago in many cases. TOO LATE, MATE. NO LEGAL SYSTEM BASED on COMMON LAW should ignore the movement of value caused by legally binding contracts being in place between Buyer and Seller (With the Lenders Knowledge and Consent) and then seek to recover that value from a remote party that didn’t borrow that money / was not lent that money in the first place, trying to argue that it is based on an asset that is contracted to be passed to the Buyer, but due to the Borrowers default, has not been.
In any event, what can be recovered from that asset now can only be a token sum. So Government of Cyprus wake up to this fact and clear up your laws and practices accordingly. The Nations greedy bankers were irresponsible and have screwed royally, YOU CANNOT IN ALL CONSCIENCE SIT BACK AND ALLOW THIS CRIME to run on unrestrained.