Suspension of the foreclosure process and Laws adopted by the House of Representatives on 06.07.2023
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The article refers to the suspension of the foreclosure process until 31.10.2023 and the amendments to the Transfer and Mortgage of Property Law which has been introduced by the House of Representatives.
The Banks and the Credit Acquisition Companies decided to suspend the foreclosure process until the 31st October 2023. Τhe temporary suspension of the foreclosure process will apply to the primary residence of the debtors that do not exceed the total value of €350.000. The purpose of the decision is to support the efforts and initiatives taken by the Cypriot Government and the Central Bank of Cyprus in relation to foreclosure matters. Τhis temporary suspension will provide a safety net to all mortgagors given the already harsh economic and social circumstances that they face due to the ongoing and intensifying impact of Ukrainian war, as well as the COVID-19 pandemic.
Furthermore, the Transfer and Mortgage of Property (Amended) (No. 7) Law of 2022 was adopted by the House of Representatives on 06.07.2023. The aforementioned bill amends article 44B (2) and provides that any notice for arrears sent by the mortgagee to the mortgagor or to the guarantors accompanied with notice type Θ shall include more information for the borrower’s account such as: borrower’s name, account number, the purpose of the loan agreement, the amount of the loan agreement, the interest rate, the termination date and etc. The above amendments are placing an excessive burden on the Banks and Credit Acquisition Companies which they should include various details of the borrower and enhance the risk of making mistakes or omissions to the notices.
In addition, the Transfer and Mortgage of Property (Amended) (No. 8) Law of 2022 was adopted by the House of Representatives on 06.07.2023. The aforementioned bill provides that in case the mortgagor wishes to transfer to the Bank or to the Credit Acquisition Company the mortgaged property to satisfy a debt and the mortgaged property constitutes a primary resident or the business premises of the Borrower, the exchange value shall be the open market value of the mortgaged property as indicated in the part VIA of the Transfer and Mortgage of Property Law. The provisions of the bill do not apply in cases where the property will be transferred to KEDIPES or its subsidiary company in the context of the "Rent Against Installment Scheme" in case the transfer intends to satisfy credit facilities which granted to the borrowers from the mortgagees.
Finally, the bill which aims to create a special jurisdiction Court to adjudicate foreclosure cases will be examined on 13.07.2023 by the House of Representatives accompanying with the proposed bill which grants the right to the mortgagor and other interested parties to suspend the foreclosure process in certain circumstances which include disputing the amount due and questioning the existence of abusive clauses in the loan or in the mortgage agreements. The proposed amendments will strengthen the mortgagor’s right to challenge the foreclosure process and may lead to an abusive behaviour of the mortgagors by filing several number of lawsuits in relation to the above matter.
By Margarita Avraam
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