Cyprus President Nikos Christodoulides has referred five of the 12 foreclosure-related laws recently approved by the House of Representatives back to Parliament, while sending four others to the Supreme Court of Cyprus for constitutional review.
The move highlights growing tensions over how Cyprus balances borrower protection with financial stability in its property market.
According to Presidential Press Office Director Viktoras Papadopoulos, the president approved two government-backed bills and one proposal submitted by the Greens. The law keeps in place a rule preventing repossessed properties from being sold at auction for less than 50% of their market value.
The two government bills strengthen protections for borrowers. One makes decisions by the Financial Ombudsman binding for disputes involving up to €20,000, although financial institutions can still challenge rulings in court. The second gives homeowners the right to seek earlier verification of their debt through the Ombudsman when facing foreclosure proceedings, offering greater protection for primary residences.
Five foreclosure laws referred back to parliament
The five laws referred to parliament raised concerns over constitutional conflicts, retrospective application and legislative overlaps.
One proposal from DIKO would require district courts to hear foreclosure-related cases within 12 months. President Christodoulides argued this interferes with judicial independence.
Another proposal from AKEL and the Greens would allow borrowers to challenge unfair loan terms and debt calculations in court. Officials warned this could overload the legal system and delay repossessions.
A separate bill aimed to stop banks charging additional interest once debt reaches twice the original loan amount. The president said lawmakers must clarify whether this applies to existing or future contracts.
Two additional laws covering extra collateral requirements and personal insolvency arrangements were also returned for amendments.
Four laws sent to Supreme Court
Four other measures were sent directly to the Supreme Court over concerns they may breach the constitution.
These include a proposal from Democratic Alignment to suspend foreclosures on primary homes worth up to €350,000 until year-end.
Other measures would limit guarantors’ liabilities, require lenders to exhaust all recovery options before pursuing guarantors and write off remaining debt after repossessed properties are sold.
The laws will now return to Parliament for further debate, with the outcome expected to have major implications for Cyprus’ housing market, lenders and homeowners.
