Nicosia, Cyprus. President Nikos Christodoulides has referred five laws concerning foreclosures back to parliament, saying they were unconstitutional, legally vague and could adversely affect the economy and the banking system. The laws were passed by the House of Representatives in a rushed plenary session on April 6.
Parliamentary review ahead of dissolution
The parliament’s finance committee is set to convene on Thursday to examine the presidential referrals before they are sent to the plenum later in the day. The House is expected to vote on them before parliament dissolves ahead of the May 24 parliamentary elections.
The House will also have to examine five additional referrals concerning the social cohesion fund, the provision of state land, the supervision of children and renewable energy sources.
Referral on courts law and mortgage appeals
On foreclosures, the president referred the amended law on courts, which allowed a district court judge to examine appeals concerning mortgages. He said the law contained ambiguities, contradicted existing legislation and involved legislative intervention in the authorities of the judiciary.
Referral on consumer credit for housing-linked immovable assets
Christodoulides also referred the amended law on credit for consumers regarding immovable assets earmarked for housing. The measure barred banks, credit acquisition companies and administrators from demanding additional guarantees when the housing loan was fully covered by the mortgage and the borrower’s creditworthiness. The referral cited ambiguities and said the text should be reworded.
Referral on interest rate liberalisation and proposed ceiling
The president referred the amended law on the liberalisation of interest rates, which introduced a ceiling on interest rates. He said the law was unclear on its scope, could raise issues of retrospective implementation and could violate the constitutional right of freedom of contract.
Referral on transfers and mortgages and suspension of foreclosures
The fourth referral concerned the amended law on transfers and mortgages, under which exercising a legal remedy—such as challenging the amount of the debt or invoking unfair terms—would suspend the foreclosure process until a final decision was issued. The president argued this could lead to mass delays, as borrowers could cite unfounded claims and overload the courts.
Christodoulides also said the measure risked encouraging a culture of non-repayment, increasing the cost of loans and restricting new credit.
Referral on individual insolvency and guarantees
The fifth referred law concerned the insolvency of individuals, intended to balance lenders’ and borrowers’ interests. The president said there were serious weaknesses, particularly regarding the exemption of debtors from obligations arising from guarantees.
Other referrals include social cohesion fund and state land provisions
On the social cohesion fund, Christodoulides cited problematic clauses extending exemptions from the obligation to pay employer contributions, particularly in shipping and for non-Cyprus residents. He said this would require refunding contributions, burden public finances and could contradict European legislation.
A separate referral concerns the provision of state land valued above €500,000, which the president said limited the discretion of the executive power in managing state property.
What changes, if any, should parliament make to address the president’s concerns before the laws are put to a vote?
