Cyprus Lenders Proceed with New Foreclosures Bill
Some light at the end of the tunnel appears for the 60,000 trapped property buyers in Cyprus still waiting to receive title deeds for their properties as lenders promised not to oppose a disputed legislation, however officials are doubting the logistics of how it will work pragmatically speaking.
Last week, after passing several bills giving banks more power to foreclose on property owners with stagnant outstanding amounts on their mortgages, the Cyprus Bank Association has assured Members of Parliament that banks would accept the requirements of the 2015 legislation.
The law sought to help property owners on the island who had fully paid for their homes without being issued with their title deeds because the developers already had mortgages on the properties.
Problems have since arisen because developers’ land and buildings are classed as assets to be offset against their debt to banks; giving rise to a claim to lenders on properties that had been mortgaged by developers.
Depending on the case and under certain conditions, employees have been told that in order to expedite applications to:
- Cancel mortgages or other encumbrances.
Confusion has arisen whereby an appeal previously rejected was allowed; suggesting that the indecision could make lawmakers pass the decision to the Cyprus Supreme Court for a final ruling; effectively spelling the end of the effort initiative to resolve matters as quickly as possible.
Such cases had to go to court and prove that all the procedures were above board. If the court was convinced then it issued an order for the department to accept the contract, which it did for a small number of cases.
What we Know so Far
- The land registry has so far received 16,000 applications from trapped buyers after the law was put in place in 2015.
- Around 8,000 of those developments already had title deeds and 5,000 of them have since been resolved, i.e. transferred to the buyers of individual properties.
- For the remaining 8,000, title deeds must be issued first before they can be transferred.
Eltoma Property have legal experts on hand to provide assistance with any property-related loans in Cyprus. Contact us for more information.