The battle to free nearly 10,000 “trapped buyers” in Cyprus is heating up, as banks and credit institutions voiced strong opposition to a new law proposal discussed on Wednesday in Parliament.

The controversial bill, aimed at unblocking long-stalled title deeds for thousands of homeowners, drew sharp criticism from the association of banks of Cyprus and Kedipes during the House legal committee meeting. Both bodies said they were concerned about the proposal’s provision granting affected buyers access to the courts, citing serious legal and practical complications.

But Interior Minister Konstantinos Ioannou, who attended the session, defended the bill. “Under the circumstances, and based on the legal tools at our disposal, this is the best possible solution,” he said, calling the effort an “extremely difficult undertaking”.

Official figures show that 9,497 buyers remain trapped in limbo. Of these, 5,417 have no title deeds at all, largely due to missing final town planning or building permits. Most of the remaining 4,080 cases involve buyers who have paid in full but cannot obtain title deeds because developers have outstanding mortgages on the land the properties were built on.

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The proposal gives homeowners eight months to submit the necessary paperwork, followed by two years for the land registry to process and issue the title deeds. Despite support from the interior ministry, the central bank, the finance ministry, and the Cyprus bar association, all of which said they welcomed the effort, key stakeholders raised red flags. Kedipes representative Georgia Ioannides and bank association spokesperson Elena Frixou both rejected the bill’s court access clause.

Frixou warned of “legal and practical issues”, while others pointed to a lack of clear timelines and gaps in coverage for many trapped buyers. Anthi Exadaktylou of the credit acquisitions companies association said the proposal fails to solve the core problem for most buyers.

“It concerns us in three main areas: court access, unclear timeframes and insufficient solutions,” she said.

Committee chair Nikos Tornaritis of Disy acknowledged the scale of the issue.

“We are working on a law that touches the core of the problem,” he said, vowing to take the proposal to a full parliamentary vote before the summer recess.

During the session, MPs from all parties offered mixed views. Diko’s Christiana Erotokritou warned that previous efforts collapsed due to poor planning.

“We must not repeat the mistakes of the past,” she said.

Akel’s Aristos Damianou said while some owners will benefit, others risk being left out.

“Unless the proposal is improved, many will not be vindicated,” he said.

Syprodat’s Jenny Papacharalambous suggested freezing foreclosure proceedings for those with non-performing loans at least four months and relaxing rules on redemption fees. On behalf of small business owners, Loukas Stylianou expressed support for the bill.

Meanwhile, financial commissioner Valentina Georgiadou stressed the need for out-of-court settlements and called on all sides to show good faith. But Akel MP Andreas Pasiourtides replied bluntly:

“Goodwill has long since been lost. How will a fully paid buyer get their title?”

As tensions rose, Tornaritis confirmed that the legal committee would seek guidance from the Supreme Court on judicial timelines. A final article-by-article review is expected next week. The stakes are high. Cyprus has faced repeated criticism from EU institutions over the unresolved title deed saga, which has left thousands unable to sell or transfer their homes.

Previous attempts to cut banks out of the process failed in court, after financial institutions argued that they couldn’t issue title deeds while developers still owed money on the land or buildings.