THE COMMERCE Ministry’s Competition and Consumer Protection Service (CCPS) has deemed the terms of a contract signed between land developers Alpha Panareti Public Ltd and a Scottish individual over the sale of a one-bedroom flat abusive, following complaints filed by the buyer.

The contract, signed in September 2009, stipulated that the Scottish woman agreed to buy the flat at a price of €215,577, payable in four instalments, but included clauses that were ruled unjustly favourable to the sellers.

In a May 2011 letter to the ministry’s Consumer Protection Service, the plaintiff first raised her claim of having been misled into accepting the terms of the contract and asked that it be nullified.

Following initial investigations, in November 2011 the service denied her request, claiming it could not conclusively establish Alpha Panareti’s responsibility for the buyer being misled.

Also, the service said, it emerged from its investigation that the transaction fell outside its remit as the buyer had bought the flat not for her own use – in which case she would be classed as a consumer – but as an investment vehicle.

Subsequent back-and-forth between the buyer and the service, which included the intervention of the European Commission in June 2013, prompted the service to re-examine the case in light of relevant European regulations, forcing the re-evaluation of the plaintiff’s claims.

The final decision, issued on September 10, 2014, vindicated the buyer’s arguments as it found the contract to contain terms that were abusive and unjustly favourable to the seller.

Specifically, one clause stipulated that the buyer was responsible for full payment in instalments, the last of which payable “on possession of the property by the purchaser,” expected to be effected in September 2011.

Another allowed the seller a six-month “grace period” – or extension – for completion, as well as listing a host of uncontrollables as possible reasons for delay in completing construction, such as acts of God and local authority requirements, which would not burden the seller with any penalty.

The terms of the contract also allowed the seller a five per cent “variance” between the precise area and size of the property delivered compared to the architectural plans, with no provision for price adjustment.

Further imbalances allowed the seller the right to cancel the contract and retain any monies paid, while restricting the buyer’s right to cancellation and refund requests.

Another distortion identified by the service was the omission of a hard date relating to the seller’s obligation to furnish the buyer with title deeds, thus allowing the seller to indefinitely restrict the buyer’s right to ownership.

Finally, the Service found that a clause in the contract failed to offer “clear and detailed” explanation of the buyer’s rights, with a vague reference to the “provisions of the Sale of Land Law.”

Editor’s comments

The decision by the CCPS results from breaches to the Unfair Terms in Consumer Contracts – Law 93(I)/1996, in which Cyprus transposed European Directive 93/13/EEC into its national law.

The CCPS is further investigating whether the complainant’s contract with Alpha Panareti and the Alpha Bank breaches the provisions of the Unfair Business to Consumer Commercial Practices – Law 103(I)/2007 , in which Cyprus transposed European Directive 2005/29/EC into its national law and which became effective 7 December 2007.

The Director of the CCPS has advised the complainant to proceed with court proceedings against Alpha Panareti.

Three years ago the Cyprus Property Action Group (CPAG) encouraged those who had purchased property in in Cyprus and who were experiencing problems to complain to the CCPS.

This is the first reported case in which a complainant’s case has been decided favourably by the CCPS.

THE arrest last week of property developer Theodoros Aristodemou sent shockwaves through the island’s business community and may signal that a clique of businessmen with the ‘right connections’ once considered to be immune from prosecution may now be vulnerable.

Aristodemou was released from the Paphos General Hospital on Sunday and has now been transferred to a private clinic in Nicosia with high blood pressure. An officer from the Paphos Municipality who was also remanded in custody for eight days on Saturday in connection with the same case is being treated at the Limassol hospital psychiatric ward.

According to reports, the Police investigation into Aristodemou and his company Aristo Properties has widened to include other Aristo developments as part of an investigation initiated by the Cyprus attorney-general’s office in July.

Police seized more than 150 project files and computer hard discs when they recently raided the company’s headquarters in Paphos. One of the projects being probed is the Kings Avenue Mall in Paphos, but some of the documents have been reported as being ‘missing’ from the file. Other reports say that some data has been erased from the hard discs.

The Registrar of Companies has written to the Paphos Municipality listing the names of companies in which Aristodimou has interests, either as a director or shareholder.

The Municipality has already handed over 179 files to the police and it is anticipated that the files of these companies will be handed over tomorrow.

A document leaked to the press in May showed that Dolphin Capital Investors Two Limited was one of the Bank of Cyprus’ largest debtors owing €300 million. At that time DCI Holdings 1 Ltd had a 49.75% share in the company, while Theodoros Aristodemou held the remaining 50.25% of the shares.

Aristodemou is also under investigation in connection with collapse of the island’s economy, which includes probes into loans granted by former bank officials; arrests are expected by the end of the year.

While Aristodemou was serving on the Board of the Bank of Cyprus and later as its chairman, Aristo’s debt grew from €25 million in 2006 to €200 in 2011 according to a BoC official.

Aristodemou suddenly stepped down as chairman in 2012 citing ‘health reasons’, which occurred at the time when the BoC decided to seek €675 million in emergency aid after suffering heavy losses.

In December last year the Greek language newspaper Politis reported that Aristo Developers had failed to pay the Inland Revenue €2,376,356.10 Immovable Property Tax by the deadline of 30th November.

Meanwhile it has emerged that complaints have been received about another property developer in the Paphos area for building a specific development without planning permission. This developer has not been named and the municipal engineer is looking into the matter to see if the allegations are justified.

Fifth arrest

On Tuesday, the police arrested a fifth suspect in connection with the Aristo case who is being detained at the Paphos Central Police station and is expected to be brought before the Paphos District Court later today (Wednesday).

Police believe that the 39-year-old, an employee of Aristo Developers, forged the Land Registry plan related to the case.