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Finance watchdog queries foreclosures law

Former Financial ombudsman Pavlos Ioannou

The law passed last week by the House set to freeze foreclosures until the end of January 2023 has a slew of interpretive issues, financial ombudsman Pavlos Ioannou said on Monday.

Sending it back to parliament will grant lawmakers the opportunity to correct some of these issues, he told the state broadcaster.

For instance, how a primary property is to be determined is not clearly defined, he said. Though the legislation outlines a primary property is one in which the owners reside in for six months, there is no clarification on how this is to be proved, he noted.

The moratorium on foreclosures applies to a debtor’s primary residence valued at €350,000 or less, business premises where the business’ annual turnover does not exceed €750,000, and parcels of land with a value of €100,000 or less.

A similar issue exists with the interpretation of agricultural land – “if someone has land in a village that they cultivate is it classed as agricultural land?” said Ioannou.

“For parliament’s self-respect, this law should be well defined.”

Referring the law back to parliament would give lawmakers the opportunity to create a better safety net for truly vulnerable groups.

Ioannou’s latest comments follow calls to President Nicos Anastasiades by his Finance Minister Constantinos Petrides to send the law back to parliament. He warned it would bare consequences on interest rates, the possibility of obtaining loans and Cyprus’ credit score as well as non-performing loans.

On Sunday, Anastasiades said he would seek the opinion of the attorney general on the constitutionality of the law before making any decision.

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