Borrowers now have new legal tools to protect themselves from foreclosures following a decision by the House of Representatives to accept, with amendments, four of the five laws referred back by President Nikos Christodoulides.
However, the final outcome will depend on whether the Presidency signs the legislation into law.
During its final session before self-dissolution, the plenary approved four of the five referred laws and rejected one. Amendments were introduced to the texts before their approval.
The amended legislation includes changes to the framework on insolvency, personal repayment plans and debt relief, offering support to thousands of households burdened by non-performing loans, particularly those with a primary residence valued up to €400,000.
The revised law on credit agreements for residential property strengthens legal safeguards, allowing courts to examine potentially unfair terms in loan contracts, regardless of when they were signed.
Meanwhile, amendments to the law on interest rates prohibit banks from charging additional interest once the total loan amount, including interest, doubles the original debt.
New legal avenue for borrowers
Chair of the House Finance Committee, Christiana Erotokritou, said the changes introduce a new legal avenue for borrowers. Individuals with loans secured against their primary residence will be able to apply directly to court upon receiving a foreclosure notice and seek a suspension order, regardless of other procedures under existing mortgage law.
She described the measure as a new legal tool aimed at strengthening borrower protection.
Political reactions
DISY MP Onoufrios Koulla said the party seeks to protect the majority of borrowers who are not at fault, arguing that previous schemes such as Estia and Rent-to-Mortgage provided real relief, rather than legislation.
He added that a more balanced foreclosure framework in earlier years could have prevented the current situation, warning that delays carry economic costs for depositors and consistent borrowers.
DISY MP Averof Neophytou said he would vote against the President’s referral, stressing that his position should not be interpreted as disagreement with his parliamentary group. He questioned the referral of what he described as a constitutionally sound law.
AKEL MP Aristos Damianou said the right to seek justice is protected under multiple legal frameworks, warning of a significant transfer of wealth away from Cypriot citizens.
Leader of the Greens, Stavros Papadouris, expressed surprise at the reasoning behind one of the referrals, noting that concerns raised related more to government policy than constitutional issues.
DIKO MP Zacharias Koulias described the President’s criticism of the laws as unfortunate, while EDEK leader Marinos Sizopoulos welcomed the fact that Parliament was finally taking action, acknowledging shared responsibility for the current situation.
DIIPA MP Alekos Tryfonides reiterated a proposal to suspend foreclosures until the end of the year, arguing this would not pose risks to banks or the wider economy while awaiting new government bills.
Independent MP Alexandra Attalides said banks bear responsibility for failing to distinguish between strategic defaulters and vulnerable borrowers, warning that many citizens remain at risk of losing their primary homes.
ELAM MP Sotiris Ioannou noted that his party has opposed foreclosures since 2016.