Judicare, a legal services company set up by former professional footballer Neal Heaney to help Britons who have purchased properties overseas but have since come into difficulties, said since January this year the Cypriot banks, of which Alpha Bank is the main lender, has been serving writs of summons on their clients and their UK homes.
The buyers had largely bought the properties as investments during the height of the island’s recent and now-ended property boom.
The main point of contention is that many owners were advised to and took out loans denominated in Swiss francs, which, following the property price crash and wider financial crisis in Europe, meant the worth of their investments went down, while the value of the loans shot up.
There have been some recent cases brought within the UK, after a High Court judge ruled in November 2012 that investors could have their cases heard in a UK court.
The result of some of this action is that an out of court settlement has been agreed between some parties which will see a “middle ground” taken.
The agreements, which are dependent on the borrower’s financial statement, will see a lump sum paid to the bank or a revised repayment strategy put in place, in exchange for the removal of any charges against the UK property and other obligations.
However Judicare’s Heaney warns these agreements could be very costly for the investors, with those over 60, for example, being asked to ensure payment before their seventieth birthday or to ask a family member to take on responsibility for the loan.
Void loans
Judicare meanwhile, which has around 250 clients involved in this particular situation, said it will continue to fight the cases in the Cypriot courts with its team of local barristers on the basis that the original Swiss franc loan agreements are void. As well as removing any obligation for its clients to pay, Judicare also hopes to recoup some of the money paid to the banks by its clients.
In the meantime however, Heaney is also warning investors which do not already have legal representation, not to ignore letters sent by the banks as, if these are ignored, the Cypriot banks will have legal grounds to put a charge against their UK homes or other property.
“A few years ago the idea that Cypriot banks could pursue UK buyers and their assets in the UK concerning issues related to a property purchase in Cyprus was perhaps a hypothetical scenario,” said Heaney.
“However, it is now very real and we are seeing more and more examples of the Cyprus banks seeking enforcement of judgements in the UK which have been obtained in the Cyprus courts. Mainly due to the fact that clients have ignored (for whatever reason) the service of the writs of summons to them in the UK. A frightening scenario.”
Judicare and its Cypriot barristers will be holding a free seminar for all concerned purchasers of properties in Cyprus on 12 July at Birmingham City Football Club 1pm to 5pm.
