Lawyers take up case of British property buyers in Cyprus

by Ray Clancy on July 7, 2016

Up to 20,000 British people who bought homes in Cyprus using what has been revealed as a bad deal could be closer to getting some kind of recompense.

A legal test case involving 250 owners is underway involving loans totalling £100 million. They are currently waiting on a date for a court hearing in Cyprus.

cyprusBANKThey are among thousands who were encouraged to take out loans in Swiss francs to buy their properties in Cyprus, but due to the financial crash in 2007 they found themselves paying up to 50% more for their loans when the Swiss currency increased sharply against the euro and the pound.

The legal case surrounds the legitimacy of whether they had been given good financial and legal advice. The majority were buying properties off-plan from developers and were told that once Cyprus adopted the Euro at the start of 2008 prices would soar and properties would be easy to rent out or sell for a vast profit.

Most used a mortgage taken out in Cyprus. But they were not made aware that the loans would be in Swiss francs until near completion. Lenders claimed that the Swiss franc was the best option as interest rates were lower and it was deemed to be a very stable currency.

It also became clear that the way that the power of attorney, which buyers agreed to so that the deal could be completed without having to travel to Cyprus, was not enacted correctly. Documents should have either been signed in Cyprus in front of lawyers or at the Cyprus Embassy in London but they were not and legal experts now argue that this make the sales contract invalid.

Over the years many have struggled to keep up with payments on the loans and risk legal action being taken against them. Those who have defaulted have been served with lawsuits from courts in Cyprus. One was Kevin Sperling, a sales director from Camberley in the UK, who saw his original loan of £235,000 more than double to £500,000 due to rising interest rates and negative currency exchange rates.

Legal firm Judicare Group is now acting for a group of 250 owners working through TCA Law in Cyprus. The firm’s chief executive officer Neil Heaney believes things can only get worse unless they take action.

‘Regrettably the issue isn’t going to go away if people simply ignore it, though I certainly understand the desire to do so. The truth is that a wait and see approach will at best mean a delayed resolution and a continued struggle to make repayments,’ he said.

‘At worst, it could be all of the above, with the added trauma of a potential appearance in an overseas court which at that stage will minimise the chance of success. Dependent on individual objectives owners can try and re-structure their loan with their bank in Cyprus to make it more affordable, whatever happens, seeking impartial and expert legal advice is strongly advised, even if it’s just an initial consultation,’ he added.

The legal experts are hopeful of a positive outcome. ‘This whole affair has been appalling, but the end is edging closer for those who acted early. We’ve been working towards getting a set court date in Cyprus and are increasingly confident of our success in annulling the extortionate loan agreements,’ Heaney explained.

{ 6 comments… read them below or add one }

Janet Hanmer July 8, 2016 at 8:30 pm

We were advised to take out a loan in Swiss francs and struggled but eventually managed to raise the finance to pay it off. Unfortunately because of circumstances we are now having serious consequences and certainly could no longer afford lawyers.
These are compounded by the fact that due to health issues we need to return to England. However although our title deeds have been ready almost 2 years and despite the ruling made by troika when Cyprus needed the bail out we have been told by someone close to our developer that he has no intention of releasing them. This means that we cannot sell and are trapped here with dwindling funds.
I am sure we are not the only ones in this situation, especially with the fall in the pound.
Just getting desperate as to what we can do. Any advice welcome.

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Veronica August 5, 2016 at 6:29 am

If your title deeds are ready it is illegal for your developer to refuse to release them. You need to see a lawyer.

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nick February 9, 2017 at 1:31 pm

Title deeds in Cyprus is a big subject and unfortunately for those who paid their homes and haven’t received the deeds they need to add an additional expense for lawyers. However many developers have sold many properties and they took them money and they’re gone. Take in consideration property lawyers in cyprus are not cheap.

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Syrius December 15, 2018 at 4:53 pm

Stay away from S.A.N. Holding. A lawyer, Stanislav Tikhonov, was our adviser on property acquisition, we gave up when noticed signs of incompetence and got negative feedback about this lawyer. Just FYI: watch out!

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laura Smith November 29, 2017 at 5:02 pm

with over 400 others led by a fantastic Brit I settled with in my case Alpha Bank but Bank of Cyprus was also involved over 3 years ago. It is possible keep going and good luck.

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Michelle March 16, 2018 at 3:38 pm

We should buy the property in Limassol, but now we are very afraid about money keeping…

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