On 08/07/2021, the House of Representatives passed a bill to extend the moratorium on foreclosures until 31/10/2021 due to the intensifying social and economic consequences of the outbreak of the pandemic. The suspension of foreclosures in Cyprus expired at the end of July 2021.
The first suspension of foreclosure in Cyprus took place for the period from March to June 2020, then it was extended until August 2020, the next suspension was for the period from December to March 2021, and the last moratorium was introduced from April to July 2021.
It is worth noting that with the latest amendment, the House of Representatives decided to suspend the sale of the property, which is used as the main place of residence and the value of which does not exceed €350,000. Additionally, under the moratorium, were the commercial premises of companies whose annual turnover does not exceed €750,000. Finally, the government froze the sale of agricultural land worth up to € 100,000.
The President of the Republic of Cyprus, exercising the right vested on him by article 51.1 of the Constitution, decided not to sign the bill, which was approved by the majority of the Members of the House on 08/07/2021 and referred the bill back to the House of Representatives for reconsideration. President’s reasoning for referring the bill on suspension of foreclosures, was, inter alia
, based on the fact that the current bill conflicts with the article 26 of the Constitution in relation to the right to enter freely into any contract, and in particular interferes with the right of the mortgage creditor and mortgage debtor.
In a special plenary session, the House of Representatives rejected by majority the President’s refusal to sign the bill that would extend the suspension of foreclosures.
As expected, the President of the Republic of Cyprus, by exercising his right derives from article 140 of the Constitution referred the bill to the Supreme Court, seeking to obtain its opinion as to the whether the bill or any specified provision thereof is repugnant to or inconsistent with any of the provisions of the Constitution. Until the issuance of the ruling of the Supreme Court on the matter, the bank institutions and credit purchase companies (investment funds), taking into consideration that the law on foreclosures applies as it stands since 31/07/2021, have the right to initiate the mortgage foreclosure process.