In order to legitimately transfer or donate assets, funds or immovable property from one person or legal entity to another in Cyprus, a valid and legally biding contract must be established. In order for the contract to be hold its own in a court of law, each party to the contract has to be of sound mind and health as a basic requirement.
There are people who cannot legitimately enter into a contract or manage their affairs due to their mental health or age. Under these circumstances, a court must appoint a suitable person to administer their estate called an Administrator.
The administrator of an estate acts gratuitously, and may only dispose of any the property after a court order has been obtained. Elderly people in Cyprus are often most vulnerable to illegal acts by manipulators using various methods to acquire any estate or assets in bad faith.
The most common method of abuse is to obtain a Power of Attorney through which they believe are free to acquire the property. Although this is incorrect, scammers also use this method in order to transfer the assets into their name. Any property transferal is illegal, as in some cases elderly homeowners had no contractual ability and did not fully comprehend the authorisation/donation supplied.
The following defenses are available to anyone who wrongly entered into a PoA contract regarding the transferal of property with a party not considered to be of sound mind:
- Undue influence.
- Misrepresentation or mistake.
By using the above defenses, such transferals can be effectively declared null and void. The relevant provisions of the law state that a contract is said to be induced by “undue influence” where the relations between the parties where one party is in a position to control the will of the other and uses that position to obtain an unfair advantage over the other.
Specifically, a person is deemed to be in a position of control over the party where:
- One party holds a level of authority over the other.
- One party has a fiduciary relationship to the other.
- One party creates a contract with a person whose mental capacity is affected on a temporary or permanent basis.
The Supreme Court in Cyprus dealt with the above issue giving emphasis to the principle of undue influence and preventing scammers from retaining any benefits of a fraudulent or unlawful contract. Once the court is satisfied that a transferal or donation was the result of undue influence or where the relations between the doneé and the donor are such as to create the presumption that the donor was influenced by the doneé, the court declares any donation or signed contract to that effect null and void.
For a transfer or a donation to be declared valid and legally binding, it must be considered to be an act of freewill by the donor who has to be fully aware of his actions. The best way to prove that a transferal or donation was not the result of undue influence is to provide evidence that it was made after independent legal advice was taken on behalf of the elderly.
Eltoma Property have legal experts on hand to provide assistance with any property or land matters in Cyprus. Contact us for more information.