Pissouri landslide victims offered no compensation

Bejay Browne
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Pissouri landslide victims offered no compensation

INTERIOR minister Constantinos Petrides visited the area of Pissouri on Thursday morning where an ongoing landslide has destroyed dozens of properties but underlined that no compensation from the government would be forthcoming to affected owners whose homes have been deemed too dangerous to live in.

Elina Zoi, a lawyer representing a group of the affected homeowners, confirmed that Petrides said that the only way for compensation would be through litigation.

“The minister said that unless the courts decided compensation was due, there is no chance of this for homeowners. I explained that they wanted to try a political solution first, many are elderly and they know they may not be around when a decision is made if they take court action,” she told the Cyprus Mail.

She added that when a minister is so clear there is ‘no other choice’ and legal action is now something to be seriously considered. The lawyer said she will now discuss with her clients who wants to start this procedure.

No insurance company will insure against landslide damage and the properties were all built by different developers.

According to Zoi, Petrides and members of the geological survey department, members of Pissouri council and other ministry employees, got a panoramic view of the area from a hilltop. This was followed by a meeting held at a taverna in the square.

The minister said that a survey would be undertaken of the area, with initial results in March or April 2020, but before that, work would be undertaken to prevent progression of the phenomenon.

“The minister did not wish to share the measures just yet, as the relevant parties had only held their first meeting earlier this morning and no decisions have been made,” she said.

However, these preventive measures will aim to ‘support the area’, ie. a hill, which as yet is unaffected.

She added that officials will examine documents from a tender and decide if they will proceed with the company in September/October. This company will then have four months to prepare a preliminary report as to what measures can be taken and propose two or three possible solutions, she said.

“I find this very strange to take measures before a study is done. First the investigation should take place and then the measures introduced,” said Andreas Evlavis of the Paphos Green party.

Many of the affected homes have virtually collapsed; the result of a continuous and accelerating landslide and many homes are now deemed unfit for habitation. Homes and gardens are ripped apart, walls and pools are collapsing and roads split, buckled and impassable.

Desperate homeowners have long pleaded with the government for help, but to no avail. In 2015, the then minister, Socratis Hasikos, said it was the government’s duty to intervene, but since his resignation in May 2017, no action has been taken

Petrides said that he will request financial help for those who have been forced to abandon their homes when the cabinet reconvenes in September, she said.

“He stressed that this is not compensation and no amount was mentioned, but it would be towards rent,” she said.

Evlavis said that the government has done nothing to help homeowners who are both Cypriots and non-Cypriots in the last seven years since the problems were first encountered.

In addition, Evlavis said that the minister was angry that the situation has had media coverage both in Cyprus and the UK.

“He blamed British residents who are complaining to the press here in Cyprus and in the UK, this is a kind of racism. What they have done is normal and I don’t think that this was the right reaction, it shouldn’t have been mentioned,” he said.

Zoi added that a few people argued that the situation is damaging for Pissouri which angered the minister who said that the government doesn’t accept blackmail (going to the press).

The minister didn’t greet waiting residents with the exception of one of the affected homeowners, Peter Field, when Zoi introduced him.

“The minister didn’t greet any of us and he could have, as some are Cypriot; he said hello to me when I was introduced, before moving on. I had opened the gate of our house in the hope that he would take a look, but he didn’t. As far as I know, he didn’t go to any of the homes,” Field told the Cyprus Mail.

In April, the auditor-general Odysseas Michaelides announced that the government should not essentially assume responsibly and compensate as it would set a precedent.

Blunt warning on foreclosures law changes

George Psyllides
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Blunt warning on foreclosures law changes

THE EUROPEAN Central Bank (ECB) has warned that changing the foreclosures law would have a significant negative impact on the island’s banking system, MPs heard on Wednesday.

The ECB, together with the Single Supervisory Mechanism (SSM), want to give a legal opinion regarding the opposition’s insistence on amending the foreclosures framework, MPs were told.

“If such adjustments are finally approved, we expect a significant negative impact on loan loss that banks have to allocate under IFRS 9, extended recovery periods might have to be considered, reliance on the repossession of collateral might have to be reduced and the inflows of new NPLs might be accelerated, as the incentives to improve of payment culture and avoid strategic defaulters might be hindered,” the ECB said in an email to central bank governor (CBC) Constantinos  Herodotou, a copy of which was distributed to the members of the House finance committee.

Speaking before the committee, Herodotou told MPs that the ECB and SSM want to give a legal opinion on the matter since the changes proposed by opposition parties affected banks under their direct supervision.

MPs were debating a presidential veto to a bill passed on July 12 that effectively renders the foreclosures legislation ineffective and will very likely lead to a need for fresh capital as the value of collateral would be affected.

Herodotou told MPs that on Tuesday he received phone calls from the ECB and the SSM asking to give their legal opinion on the matter since the matter concerned banks under their supervision.

“We cannot do anything we want in important systemic lenders, the SSM is the supervisor,” Herodotou said. “That is why we have objections.”

MPs were discussing whether to accept the president’s veto, which would put the matter to bed, or reject it and leave it to the Supreme Court to have the final say.

The attorney-general has already said the bill contains unconstitutional provisions and opposition MPs want to find a compromise that the president would accept.

Diko proposed affording the financial ombudsman the power to decide whether a bank had complied with the CBC’s code of ethics on loan restructuring, one of the issues raised by opposition MPs who claimed borrowers were at the banks’ mercy.

Herodotou said this was considered a temporary solution, adding that the CBC would try and find a permanent way to resolve the matter.

“We want a mechanism to be found that will work but also be in line with our obligations towards the ECB and the SSM. We promise to run an analysis and come up with a mechanism,” he told MPs.

The CBC suggested enabling the ombudsman to halt a foreclosure during the period between the time he decided the code of ethics had been violated until the CBC issued its own decision.

However, opposition parties objected because the CBC’s proposal limited the scope of the bill to loans that have a primary residence as collateral.

“Let us cover the most sensitive, the primary residence that is, until we have the final proposal,” Herodotou said.

The bill in question had been passed by opposition parties on July 12. They said they wanted to introduce additional safeguards for homeowners with mortgages they are unable to service, and to restore the negotiating balance between lenders and borrowers.

A week later President Nicos Anastasiades refused to sign off on it saying it rendered foreclosures legislation ineffective, raising the risk of downgrades for the island’s banks and the economy.

Foreclosures play important role in the Cypriot financial system

“Foreclosures play an important role in the Cypriot financial system,” the ECB said in the email, affecting the very high non-performing loans in the Cypriot banking system that amount to 30 per cent compared with the 5 per cent of the average of the banks supervised by the SSM.

Foreclosures the ECB added, affect the coverage ratio of such defaulted assets via loan loss provisions, which relies heavily on the repossession of collateral to avoid a higher coverage associated to aged vintages, that is, older NPLs.

The ECB said that the amendments to the framework on foreclosures will potentially obstruct future NPL sales by the Cypriot banks.

“Given the key role of asset sales in the strategic NPL resolution plans of the main Cypriot banks, we are very concerned that the envisaged amendments to the foreclosure framework will weigh on the prospects for successfully concluding NPL portfolio sales,” the ECB said.

Noting that investors request a clear legal framework that would enable them to price properly the envisaged deals, the ECB added “that the significantly extended timeframe to dispose of collateral under the envisaged new foreclosure framework will have a perceptible impact on the price for such portfolio sales.”

The ECB said the amendment of the law on foreclosures would affect strategies to reduce NPLs, potentially impacting the bank profitability, solvency, quality of assets and rating.

“While an exact estimate of the impact is difficult at this point in time, it will be important part of our supervisory examination programme for 2020, which has to follow a risk-based approach for all institutions we supervise,” the ECB concluded.

Group challenges Limassol high rise towers

Nigel Howarth
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Group challenges Limassol high rise towers

THE LIMASSOL Municipality’s decision to grant a planning permit for the high rise NEO project is being challenged by the Ipatia Initiative Group, on grounds of the negative impact on their quality of life and the general environment.

The NEO development by Pafilia comprises four high rise towers of 40, 34, 34 and 29 storeys respectively, four shops and three cafe-restaurants and provide 353 residential apartments and parking for 1405 vehicles.

The group commissioned a study by experts to assess the impact of the high rise buildings on their quality of life, the impact of local amenities as well as the impact on the environment and the landscape. The experts concluded that:

  • The quality of life of residents living in the area will be adversely affected during construction works and the operation of the project. This was mainly due to a significant increase in noise, dust and air pollution, traffic congestion and volume and loss of privacy.
  • The general landscape will also suffer a significant degradation; most notably the public garden, the coast and a number of listed buildings, including the Limassol Historical Archive and the Limassol Municipal Gallery.
  • The inadequate management of bathing water at the local beach and the general Limassol Bay area and the anticipated dumping of large quantities of brackish water and mud directly into the sea during the construction of the high rise development.

The Ipatia group’s legal challenge included an application to suspend planning permission began in May and is on-going.

Minister to visit collapsing Pissouri homes

Bejay Browne
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Minister to visit collapsing Pissouri homes
Minister to visit collapsing Pissouri homes
Photo: Daily Mail’s Georgie Gillard – Peter & Kayt Field evicted from their devastated home in Pissouri

THE INTERIOR Minister is due to visit the area of Pissouri where an ongoing landslide has destroyed dozens of homes on Thursday morning.

Elina Zoi, the lawyer for a group of the affected homeowners, confirmed that Constantinos Petrides, the Minister of the Interior, would be visiting Pissouri to meet with the lawyer and local authorities, and view the crumbling homes for himself.

“The plan is to walk around the affected area with the local community leader and see the destruction of the homes ahead of a lunchtime meeting to discuss the problems,” she told the Cyprus Mail on Monday.

It is unclear if the Minister will actually meet with any of the homeowners, although this is something they are hoping for.

Petrides’ visit was originally scheduled for Monday and then pushed to Tuesday, before being rescheduled for Thursday at 11am, ‘to allow him to spend more time in Pissouri’, said Zoi.

The Minister will first meet with the community leader ahead of a site visit and lunch meeting, which will also be attended by the Limassol District Officer, the Director of the Geological Survey Department, the Community Leader, members of the Community Board and other staff of the Minister of the Interior, she said.

Many of the affected homes have virtually collapsed, the result of a continuous and accelerating landslip and many homes are now deemed unfit for habitation. Homes and gardens are ripped apart, walls and pools are collapsing and roads split, buckled and impassable.

Desperate homeowners have long pleaded with the government for help, but to no avail. In 2015 the then Minister of the Interior, Socratis Hasikos, said it was the government’s duty to intervene, but since his resignation in May 2017, no action has been taken.

In April, the Auditor-General Odysseas Michaelides announced that the government should not essentially assume responsibly and compensate as it would set a precedent.

No insurance company will insure against landslide damage and the properties were all built by different developers.

One of the affected homeowners, Peter Field, speaking to the Cyprus Mail on Monday, said that residents are concerned whether the site visit will take place at all and that the minster may only be shown specific areas where recent, hurried repairs were carried out on roads, which had become impassable.

“Some work has been done to try and make it ‘look good’ and patched up, but it’s impossible as the destruction of homes, gardens and walls is all too obvious. They are collapsing,” he said.

Field said that homeowners had not been given any details of the impending visit by the local council and only learned of it via the community boards’ Facebook page.

“We are not going to demonstrate as we would like to have the chance to meet the Minister, show him what the situation is, calmly talk and explain,” said Field, adding that he didn’t know if this would be possible.

“It’s a practical way to show him the humanitarian aspect of our situations. We were evicted from our home over four years ago. There has been no interaction, and no help, or concern at all,” he said.

MPs say no to foreclosures veto

Staff Reporter
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MPs say no to foreclosures veto

MPs say no to foreclosures vetoPARLIAMENT on Monday rejected one of two presidential vetoes relating to changes to foreclosures legislation, while voting to postpone voting on the other veto.

In an extraordinary session the House plenum voted by 35-17 to reject President Nicos Anastasiades’ veto on a bill that would freeze until October repossessions on primary residences which are potentially eligible for the Estia debt relief scheme.

As such, the bill will now be referred to the Supreme Court for adjudication.

At the same time, parliament decided to hold off voting on the second presidential veto, which related to amendments recently made to the foreclosures legislation.

MPs decided more time was needed to discuss the specific issue. The House will be reconvening this coming Friday to vote on the second veto.

In favour of postponing a vote on the second veto were ruling party Disy, as well as opposition Diko, Edek, the Citizens Alliance and the Greens.

The two bills in question had been passed by opposition parties on July 12. The parties said they wanted to introduce additional safeguards for home owners with mortgages they are unable to service, and to restore the negotiating balance between lenders and borrowers.

A week later President Anastasiades refused to sign off on the two items, saying they render foreclosures legislation ineffective, raising the risk of downgrades for the island’s banks and the economy.

The amendments to the main foreclosures law passed by the opposition parties would allow the defaulted borrower to obtain a court decision that stalls a foreclosures process if it is proved that a bank has not taken all necessary actions required by the central bank directive to restructure a non-performing loan (NPL).

At the same time, the amendments clearly state the reasons a defaulted borrower can cite to challenge the auction of the property.

Amendments also included, among others, extending to 45 days from 30 days the payment due date following a notice and the auction of a property following a notice; and preventing the sale of a property at below 80 per cent of its market value for six months, from three months previously, while maintaining a floor of 50 per cent of the market value for any potential sale.

Also on Monday, the House voted to accept the president’s veto on an amendment to the Aliens and Immigration Law.

Additionally, by a vote of 29-17 parliament accepted the president’s veto on a bill on the widowers’ pension. The bill sought to regulate men’s right to a widower’s pension and set beneficiaries as men who became widowers after January 1, 2018. It was vetoed by the president on the grounds that it disrupts the viability of the social insurance fund.

Lastly, the House postponed till Friday a vote on the president’s veto of a bill regarding unfair terms of business contracts.

Foreclosures row could end up in Supreme Court

Staff Reporter
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Foreclosures row could end up in Supreme Court

PRESIDENT Nicos Anastasiades on Tuesday informed parliament that the two bills recently passed amending foreclosures legislation have been found to be unconstitutional as both he and his finance minister again urged MPs to withdraw the bills as they could cause serious damage to the economy.

Armed with the legal opinion of the attorney-general, the president now has the prerogative – should parliament decide to not accept the president’s veto and nix the bills – to refer the matter to the Supreme Court for adjudication.

The attorney-general found that the two bills passed by opposition parties amending the foreclosures legislation are in breach of several articles of the constitution – including the right to freely enter into a contract, the right to enjoy one’s property, and equality before the law.

Assuming parliament doubles down and rejects the presidential veto, the case would be decided in court; until a final judgment is issued, the amending bills will have no effect.

Anastasiades had earlier refused to sign off on the bills, sending them back to parliament.

The president had said the changes made by opposition parties on July 12, the last session before the summer break, would defang banks’ ability to recoup loans that have gone bad by making it more difficult to repossess mortgaged properties.

The changes, he noted, would impact “the values of the collateral, straining bank balance sheets and leading to demands from supervisors for additional provisions and fresh capital.”

They were also a disincentive to attracting investors and increased the risk of credit downgrades for the banks and the country.

Cyprus’ sovereign bonds had spent six years in junk territory, finally reinstated to investment grade in September 2018, which allowed borrowing from international markets at low rates.

The amendments passed almost a year after improvements to the foreclosures framework were adopted in response to International Monetary Fund and European Union pressure that facilitated banks’ efforts to foreclose and which have started to yield results.

The changes introduced by opposition parties allow borrowers in default to obtain a court decision that stalls a foreclosure process if it is proved that a bank has not taken all necessary actions required by the central bank directive to restructure a nonperforming loan.

Amendments also include, among others, extending to 45 days from 30 days the payment due date following a notice and the auction of a property following a notice; and preventing the sale of a property at below 80 per cent of its market value for six months, from three months previously, while maintaining a floor of 50 per cent of the market value for any potential sale.

Weighing in, Finance Minister Harris Georgiades said the fact foreclosures regulations are now stuck in limbo causes uncertainty in the market, with potential adverse consequences on the entire economy.

“We need an effective legal framework, a stable one, precisely so that we may tackle the last remnant [of the financial crisis], that is, the non-performing loans,” Georgiades said during a joint news conference with Demetris Georgiades, head of the Fiscal Council.

He again appealed to parliament to withdraw the bills.

The minister said that although opposition parties might have had good intentions, their amendments would end up creating more problems rather than fixing them.

Similarly, Demetriades of the Fiscal Council warned that the longer the issue is up in the air, the more damage is suffered by lenders and borrowers alike.

He said borrowers whose property is being held as collateral by banks are on the one hand seeing the value of their property slide, while at the same time their loan balance is increasing due to accrued interest rate.

Although parliament is officially in recess, the body will convene extraordinarily on Monday to discuss and take a vote on the presidential veto.

Should all opposition MPs stick to their guns, they have enough votes to dismiss the veto – which would take the matter to the Supreme Court.

It all hinges on the Diko party, whose MPs appear to be split on the issue. Some Diko deputies had supported the idea of postponing the passage of the bills until after September, giving some time to the Estia debt relief scheme for homeowners to kick in.

But speaking on the public broadcaster on Tuesday morning, Diko vice chairman Alecos Tryfonides insisted the bills should stand.

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