Bill which proposed the amendment of the Transfer and Mortgage of Property Law of 1965 (N.9/1965)
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The Transfer and Mortgage of Property (Amended) (No. 5) Law of 2023 (the Bill) was introduced in the House of Representatives on 25/5/2023. The purpose of the Bill is to safeguard the mortgagor’s and other interested persons’ right to take legal action before the Court in order to suspend the sale of a mortgaged property in certain circumstances which include disputing the amount due, challenging the lawful registration of the mortgage and questioning the existence of abusive clauses in the loan or in the mortgage agreements.
The Bill amends some of the provisions of Part VIA of the Transfer and Mortgage of Property Law N. 9/1965, regarding the sale of a mortgaged property by the mortgagee.
The main amendment of the Bill is the addition of a new ground of appeal which replaces the issuing of an interim order prohibiting the sale of the mortgaged property [44C (3)(d)]. According to the Bill, the mortgagor or any other interested person could file an application appeal against notice IA in case a lawsuit, or an appeal or an application to set aside a judgment issued in favour of a bank or a credit acquiring company is pending and the amount due or the outstanding balance is disputed and in the event that there are abusive clauses in the loan or mortgage agreements or for any other reasons which affects the validity of the loan or mortgage agreements.
In that case, notice IA could not be served to the mortgagor until the issuance of a final decision between the parties regarding the aforementioned remedies. In addition, the Bill gives the right to the mortgagor to set aside a Court decision to the extent that it was the result of the abusive clauses in the loan or mortgage agreement.
We note that the Bill shall apply even in cases where foreclosure notices have already been sent to the mortgagor or other interested persons.
The proposed amendments will be to the mortgagor’s benefit and strengthens the mortgagor’s rights to challenge the foreclosure process in order to achieve the suspension of the intended sale. Those amendments may cause delay to the auction process or even discourage the mortgagee to begin the procedure. Finally, the suggested amendments may lead to an abusive behaviour of the mortagors by filing several number of lawsuits claiming that there are abusive clauses or challenging the amount due.
By Margarita Avraam
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