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Cyprus

Supreme Court won’t vote on contentious bills until next year

The supreme court

The supreme court on Tuesday set March 3, 2020 as the date on which it will hear arguments for and against the president’s veto of three bills passed by parliament – two of them relating to bank repossessions.

On that date, lawyers representing the state and parliament, respectively, will submit their written arguments. The court will then adjourn to consider and deliver its judgment subsequently.

Two of the bills – the third relates to unfair contract clauses – relate to foreclosures proceedings. They were passed by opposition parties earlier this year in a bid, as they said, to introduce additional safeguards for homeowners with mortgages they are unable to service, and to restore the negotiating balance between lenders and borrowers.

President Nicos Anastasiades refused to sign off on the two items, saying they rendered foreclosures legislation ineffective, hampering banks’ ability to collect delinquent loans and thus raising the risk of downgrades for the island’s banks and the economy.

The first bill allows a debtor to set aside a repo notice by filing a complaint to the financial ombudsman. Should the latter determine that the lender breached Central Bank guidelines on loan restructurings, the debtor would be able to take recourse with a court, which in turn would immediately issue an injunction, stopping the repossession (of a primary home or business premises) in its tracks.

In the second bill vetoed by the president, its clauses provide for a temporary halt on the commencement and/or continuation of repossession proceedings on primary homes, where the debtor is potentially eligible for a mortgage debt-relief scheme known as ‘Estia’.

It ensures that no primary home can be repossessed from the date on which the law entered into force until October 1, 2019 – a month after the ‘Estia’ programme went live at the beginning of this September, accepting applications from debtors in distress.

The contentious bills featured amendments to the main foreclosures law including: extending to 45 days from 30 days the payment due date following a notice and the auction of a property following a notice; and preventing the sale of a property at below 80 per cent of its market value for six months, from three months previously, while maintaining a floor of 50 per cent of the market value for any potential sale.

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