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The New Auction Law - Cyprus Property Owners

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Amendment Act 87 (I) / 2018 - The Transfer and Mortgage of Immovable Properties Law of 1965 (9/1965)

The procedure for the sale of a mortgaged property is governed by Part V1 A of the Transfer and Mortgage of Immovable properties Law, 9/1965 along with the Sale of Mortgaged Property Act, in accordance with Part V1 A of the Law on Transfer and Mortgage of Immovable Property, Regulations of 2015.

The process of selling a mortgaged property may start, in the event of default, as a result of which, the entire mortgage debt becomes payable and the delay occurs for a period not less than one hundred and twenty (120) days from the date on which it becomes payable under the terms of the contract or the provisions of the Law.

The process of selling a mortgaged property by the Bank through an auction, starts with the sending of the Type I Notice accompanied by the Type Θ notification to the mortgageAuction gavel debtor. By means of this Notice the debtor is required to repay the amount due within 30 days of the date of its delivery and at the same time it is informed that in the event of non-payment the Bank may exercise its right to sell the mortgaged property.

If the borrower or the mortgage debtor fails to comply with the requirements of the Type I notification, ie if they fail to repay the outstanding amount of the loan, the Bank may proceed and provide the mortgage debtor with a second written notice referred to as notice Type IA which states that the mortgage property is to be sold by auction.

In accordance with Law the reasons through which a mortgage debtor may apply/ appeal for the cancellation of the Auction Notice, the debtor within 30 days from the date of receipt of the Type IA Notice, is entitled to file an Application / Appeal to the District Court for the cancellation of the Announcement of the auction of the property and therefore to cancel the auction on the basis of the reasons explicitly mentioned in the Law and are as follows:

(a) the notice served does not fulfil the conditions according to the required type and content, conditions;

(b) the notice has not been duly served;

(c) the notice was sent before the expiration of the deadline for the payment to the mortgage lender;

(d) an injunctive prohibition order has been issued in favour of the mortgage debtor in accordance with Article 32 of the Court's Law;

(e) a protective decree has been issued in favour of the mortgage debtor under the provisions of Insolvency of Natural Persons (Personal Repayment Schemes and Debt Relief Orders) Law

(f) the mortgagor whose participation is approved in the "ESTIA for the treatment of non-performing loans and support to vulnerable social groups" or any other government grant credit facility, provided that he accepts and complies with his agreement and credit obligations as they result from that plan.

One of the reasons why the mortgage debtor previously had the right to register an application / appeal for the purpose of cancelling the Auction Notice was in the case that a lawsuit was brought before the Court and concerned the notice.

However, today the mortgagor has no right to register an appeal / appeal in the event that a lawsuit is pending before the Court of Justice, since Amendment Law 87 (I) / 2018 has deleted Article 44IV and amended Article 44C by providing the right to the mortgage lender to proceed with the opening of procedure for the auction of the mortgaged property pending lawsuit.

As a result of the above we draw the attention of all individuals who have properties in Cyprus, and in particular those having Housing Loans in the Swiss Franc denomination (CHF) that should they receive a Notice as above to contact us immediately in order to indicate the new proceedings for the protection of the property and the existing claim before the Court.