People who were sold property in Cyprus and advised to take out a mortgage in Swiss Francs are being urged to pursue their rights in the Cypriot courts rather than in the UK.
The deadline of 31 December 2013 to lodge a legal claim against lenders and property developers in Cyprus has been suspended for a year in a recent ruling by the Cyprus Parliament. The deadline is now 31 December 2014.
Neil Heaney, CEO at Judicare represeting some 250 clients, said last year’s deadline may have created too many cases coming to court at once so the extension allows more time.
He explained: “Many UK buyers of Cypriot property who bought between 2003 and 2008 are facing demands for huge mortgage payments, threats of litigation from the Cyprus banks and the very real chance of losing their UK homes.
“Many have found their monthly mortgage repayments more than doubled after the banks and selling agents in Cyprus advised that clients take out a loan in Swiss Francs as this currency was perceived as stable at the time and provided a low interest loan.
“However, we believe that the swiftest and most cost effective route for clients is to take action in Cyprus and not in the UK where the need to establish jurisdiction adds an unnecessary timely, risky and costly step in the process.
“If litigation is successful in the UK courts it will still require the Cyprus courts to enforce the ruling so we maintain that the correct forum for these cases is the Cyprus courts in first instance, thus saving time and money.
Court cases suspended
The first court cases were due to start in Cyprus in last October but have been suspended until April. Judicare will be representing 40 claimants in the first batch of court cases another 200 will follow later.
Heaney commented: “Even though the Limitation Act has been suspended, people shouldn’t wait for the banks to threaten action against them before lodging a legal claim if they think that they have a case to investigate regarding a property purchase in Cyprus; they should move first.”
Banks escalating action
He added: “There appears to be an escalation in action by the Cypriot banks. We have received seven new appointments from clients in the first four days of this year where the banks’ are pursuing people who defaulted on the loan agreement.
“Banks are also reducing the time frame for borrowers to file an appearance in court from 60 days to between 10 and 30 days. Borrowers can either appear themselves or appoint an advocate to act on their behalf.
“It’s really important that borrowers don’t bury their heads in the sand. They cannot afford to leave the case undefended in Cyprus. This doesn’t have to be a doomsday scenario but it could become one if people don’t act.”
Heaney added that Judicare is in negotiations behind the scenes with lawyers in the banks to try to come to some arrangements: “Talks are ongoing but obviously the outcome has to be acceptable to our clients.”
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