Cyprus Mail

Developer slapped by consumer protection body over unfair contract

Alpha Panareti Owners Group members outside an overseas property exhibition in London

By Angelos Anastasiou

The commerce ministry’s consumer protection service has deemed the terms of a contract signed between land developers Alpha Panareti Public Ltd and a Scottish individual over the sale of a one-bedroom flat abusive, following complaints filed by the buyer.

The contract, signed in September 2009, stipulated that the Scottish woman agreed to buy the flat at a price of €215,577, payable in four instalments, but included clauses that were ruled unjustly favourable to the sellers.

In a May 2011 letter to the ministry’s consumer protection service, the plaintiff first raised her claim of having been misled into accepting the terms of the contract and asked that it be nullified.

Following initial investigations, in November 2011 the service denied her request, claiming it could not conclusively establish Alpha Panareti’s responsibility for the buyer being misled.

Also, the service said, it emerged from its investigation that the transaction fell outside its remit as the buyer had bought the flat not for her own use – in which case she would be classed as a consumer – but as an investment vehicle.

Subsequent back-and-forth between the buyer and the service, which included the intervention of the European Commission in June 2013, prompted the service to re-examine the case in light of relevant European regulations, forcing the re-evaluation of the plaintiff’s claims.

The final decision, issued on September 10, 2014, vindicated the buyer’s arguments as it found the contract to contain terms that were abusive and unjustly favourable to the seller.

Specifically, one clause stipulated that the buyer was responsible for full payment in instalments, the last of which payable “on possession of the property by the purchaser,” expected to be effected in September 2011.

Another allowed the seller a six-month “grace period” – or extension – for completion, as well as listing a host of uncontrollables as possible reasons for delay in completing construction, such as acts of God and local authority requirements, which would not burden the seller with any penalty.

The terms of the contract also allowed the seller a five per cent “variance” between the precise area and size of the property delivered compared to the architectural plans, with no provision for price adjustment.

Further imbalances allowed the seller the right to cancel the contract and retain any monies paid, while restricting the buyer’s right to cancellation and refund requests.

Another distortion identified by the service was the omission of a hard date relating to the seller’s obligation to furnish the buyer with title deeds, thus allowing the seller to indefinitely restrict the buyer’s right to ownership.

Finally, the Service found that a clause in the contract failed to offer “clear and detailed” explanation of the buyer’s rights, with a vague reference to the “provisions of the Sale of Land Law.”

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