LEGAL
ANY QUESTIONS?: LEGAL
WHAT HAPPENS IF I CAN NO LONGER AFFORD TO PAY FOR MY HOME IN CYPRUS?
D
ue to the current economic situation and the fall in sterling against the euro in the past couple of years, more
and more people from the UK who bought property in Cyprus fi nd themselves unable to pay either the balance of the purchase price on a new-build home or their mortgage loan instalments on their property. Developers and banks are worried
as this situation adversely affects their own credit/cash fl ow, leaving them no alternative but to give the purchasers time to raise the money. However, as the fi nancial position
of purchasers does not seem to be improving, many are trying to sell their properties at a lower price in order to try and recoup some of their money. As time limits given by the banks
and developers on owed monies can be tight sooner or later they will proceed to offi cially demand payment. They will terminate sale contracts/loan agreements and ask for delivery of the properties. One remedy of charging interest or default interest will not be adequate as it worsens the purchasers’ position and increases their liabilities to such an extent that they will not receive their deposit back. The question now is what is the legal position for the purchaser in default. As they are in breach of the sale or loan
agreement, the vendor and the bank are entitled to give them notice for payment of any money due. A purchaser who fails to respond to this can expect to receive a notice of termination of the agreement/s and a demand for the delivery of the property, either to the vendor or to the bank. If the contract of sale has been assigned to the bank then a purchaser who fails to deliver the property is therefore responsible for the loss of the use of the property equal to its rental value.
The bank can also claim payment
of the loan as well as the total interest due, delivery of the property and the withdrawal of the sale contract from the Land Registry. The vendor can normally claim
the money due to him with interest, delivery of the property back to him and the withdrawal of the sale contract from the Land Registry. Some purchasers will comply and agree a solution to the issue without
This month Savvas Savvides of Michael Kyprianou & Co. reports on another of the Cypriot market’s big issues
court proceedings, but those who do not comply will face legal action. As a result the property will be sold
and any net proceeds will be used against the debts of the purchaser. If there is any balance remaining this surplus will be returned to the buyer. If there is a shortfall, however, then this will remain the purchaser’s to pay. It is evident therefore that a prudent
purchaser unable to pay the funds to the vendor or repay his bank loan should fi nd an amicable solution, thus minimising his loss. However, if this is not possible, the purchaser should seek intervention and proper advice from a professional in order to fi nd the best possible solution for them keeping the subsequent loss and damage to a minimum. It is a diffi cult time everywhere
but with the right approach/ advice hopefully the impact can be contained.
www.kyprianou.com.cy
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aplaceinthesun.com
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