The bill is intended to address the historical problems of so-called “trapped buyers”.
Many clients who either purchased a majority share of a property or bought it outright were unaware that the developer had already mortgaged the land to the banks in order to raise funds.
This means the banks would class the property as an asset of the developer and could seize the property if the developer does not meet its repayment obligations, leaving many property owners trapped.
If the bill becomes law, it will allow these investors to apply for the title deeds to homes they bought in Cyprus.
Glimmer of hope
International legal services firm Judicare Group, which currently represents over 300 investors, said this bill offers a “glimmer of hope” for thousands of UK property buyers.
Neil Heaney, chief executive of Judicare, said the parliamentary meeting will hopefully restore some confidence to the Cyprus property market and some trust in the authorities to protect investors who choose to buy or who have bought property on the island.
“The Cyprus Government is realising it needs to be more protective of buyers. If this bill goes through, it would be a huge move in the property sector in Cyprus.”
The Cyprus Parliament will vote on the bill on 3 September during an out-of-session conference. The bill needs to become law before 5 September in order for Cyprus to comply with the terms of its bail-out program.
From June last year, the Cyprus banks began stepping up their legal activity by serving writs of summons on UK buyers for defaulting on their obligations against foreign currency loan agreements, linked to the purchase of immoveable properties on the island.
Most of the buyers who are defaulting claim they were mis-sold loans denominated in Swiss Francs by the Cypriot banks during the island’s property boom from 2005 onwards.
The Swiss currency surged shortly after this, therefore causing the value of their investments to nosedive, while the value of the loans soared.
The vast majority of buyers failed to seek independent legal advice and claimed they were misled by solicitors in Cyprus. Many now face demands for huge mortgage payments, threats of UK litigation, and could even lose their UK homes.
UK debt collection companies and UK law firms, employed by Cyprus banks, also continue to pursue UK clients.
According to Judicare, many clients are being offered early out-of-court settlement agreements by the banks in Cyprus which seek to restructure the terms of the loans and attempt to find a ‘middle-way’ solution acceptable to both sides to prevent any form of litigation.
Judicare advised its clients not to accept this agreement because it would still leave them at a loss.
The legal firm estimates there are over 20,000 UK investors in similar circumstances.
In April, new foreclosure laws were passed which protect the offshore buyers from having their property seized by the Cypriot banks.
Judicare and its Cypriot barristers will be holding two free seminars for all concerned purchasers of properties in Cyprus on 24 October at Birmingham City Football club and 25 October at Arsenal Football club.