The insolvency framework, which comprises of five different bills, has been the subject of much debate in Cyprus recently. The laws govern how the island’s banks treat mortgage debtors. Despite some concern over a close call between those for and against, though, 33 MPs voted in favour of the bills during a plenary session of parliament this week, outnumbering the 23 against.
Part of the debate surrounded a bill that would indefinitely ban repossession of homes whose owners have no title deeds, which the president refused to sign after it was passed in March. His concerns were that the indefinite protection for buyers, who would suffer while developers took out loans that had not been repaid, would also have the potential to be abused by those who were not vulnerable.
The ban on repossessions was due to expire on 30th April, but has now been voted by MPs to be extended until 10th June, provided that owners have paid at least 80 per cent of the sale price.
“This will give the government sufficient time to fulfil its pledge to submit legislation to comprehensively regulate the matter of homes that have been paid for but whose purchasers are facing the prospect of repossession because of developer unpaid mortgages,” comments Nigel Howarth of Cyprus Property News .
The framework was required to be passed by the European Central Bank and European Commission in order to secure further bailout funding for the island, whose economy continues to struggle. The troika can now return to continue its appraisal of the island’s financial measures, which will be sorely needed following the withholding of €85 million in funds earlier this year.