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On April 4th, 2024, a bill was submitted to the Cyprus Parliament aiming to relief thousands of borrowers and guarantors whose assets are encumbered by MEMOs.

MEMOs represent tangible encumbrances on real estate in favor of a creditor. When a court issues a judgment in favor of the creditor, ordering the debtor to pay a specific or liquidated amount, the creditor may register a charge with the Land Registry Department against any immovable property owned by the debtor as security for recovering the debt. MEMOs are registered by submitting a certified copy of the court judgment to the Land Registry Department where the debtor's properties are located. They remain valid for ten (10) years from the date of their initial registration, with the possibility of extension by the court for successive ten-year periods. All MEMOs are recorded in a special book kept at each District Lands Office.

The bill seeks to amend the Civil Procedure Law (CAP 6) to regulate that real estate properties serving as security for debt payments under court judgments shall not exceed twice the amount of the debt owed.

Moreover, the proposed regulation aims to provide relief to borrowers and guarantors whose entire properties are encumbered, even for debts relatively low compared to the property's encumbrance. Additionally, it offers incentives for resolving non-performing loans, releasing some guarantors' assets, and supporting entrepreneurship and households in advancing their plans. Specifically, it allows individuals to sell their property or use it as collateral to secure additional funding.


By Martinos Kyriakou

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