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In a landmark ruling, the Nicosia District Court has suspended the sale of mortgaged properties, citing illegalities in mortgage agreements. This is the first such decision in Cypriot legal history, raising concerns for the wider property market.
The case involved owners of two flats and a shop, who argued their mortgage agreements were flawed. The bank had added commissions, insurance premiums, and other payments not required by law, rendering the contracts invalid. Lawyers representing the plaintiffs pointed to violations of key provisions in Law 9/65, specifically issues of vague debt definitions and unfair additional costs.
After reviewing the case, the Court sided with the borrowers, emphasizing the uncertainty in the terms and the risk of property loss before legal proceedings were concluded. The decision freezes foreclosure proceedings and may open the door for borrowers to renegotiate similar mortgage terms.
This ruling may have far-reaching implications, urging banks to reconsider their lending practices. As Cyprus continues to face challenges with mortgaged properties, this case sets a crucial precedent for those struggling with unfavorable mortgage conditions.
With information from Dom.cy Digest.
