Statute of Limitation on loan default

[Sunlover1972]

Hello, Is it possible in Cyprus to understand a persons position regarding loan default. My partner had SFR housing loan which the bank had ill advised her to take a 12 month holiday period on the repayments,which just compounded the interest to a ridiculous amount, she wrote to the bank through a lawyer stating she is returning the property to them as it's not possible to continue (property cost was EUR250k loan became EUR 650k (after conversion to Eur), also in the letter it stated the current value was 150K so she offered them the current value to keep the house...the bank acknowledged receiving the letter but have never been in contact since. This has been more than 6 years. is my understanding correct that housing loans fall under contract breach with Statute of limitation 6 years instead of Mortgage with seems it's 12 years - there is no title deed on this property, so not sure when the date starts from breach of contract? Am happy to engage with a lawyer just wanted to understand if anyone else had experience in this area - she doesn't know where she stands and what if she has an Cyprus assets in the future can the bank take them from her? Many Thanks

[Nigel Howarth]

Hi Sunlover and welcome to the forum.

I suggest you seek legal advice on this. Since her firm has grown over the years, Louise no longer has the time to answer questions here. You can contact the firm via its website.

There is a description of the Statute of Limitations Law at Litigation and Enforcement in Cyprus: Overview Limitation Periods. In there it states:

"Claims brought in respect of loan agreements: six years from the date of service of the written demand from the lender to the debtor."

(You have a loan as a mortgage relies on the value of the property and is used as collateral, and that requires a Title Deed.)


Regards

[Sunlover1972]

Many thanks Nigel, I will seek legal advise as the bank didn't make contact after she sent them the letter other than to acknowledge it so we actually have no way of knowing if the bank did issue any demand - I assume they would have, or at least tried to reach out since she offered a sensible amount. Many Thanks again

[Tasmaniandevil]

Sunlover1972, I would be cautious in assuming 6 years is the limitation period when it comes to property loans/mortgages. 6 years seems to apply to cases involving credit card debt, negligence/personal injury cases etc, but as far as i can see, it’s 12 years for housing loans. Google ‘statute of limitations in Cyprus’ - various legal firms state what the rules are but it doesn’t seem to be very clear when the limitation period begins - from when you defaulted, from when the Bank obtained a judgment against you?
So, it may be a bit tricky/unwise to assume that you would be ‘safe’ (ie the Bank would be unable to make a claim against any of your assets), when in reality they have a much longer period to do so, than you had believed to be the case!
Some of the firms I referenced above even state 10 years, one stated 15 years…quite confusing.Also, I think the Banks have the option to seek an extension to the 6 (or 12) year period, whichever of those is the applicable period, again this option can only be exercised when it involves housing loan debt. This makes the whole system even more difficult to figure out.
Did you find out anything definitive? I’m in a similar situation - the Bank obtained a judgement against me (in Cyprus), in 2015 but it’s been just over 6 years since the last communication with the bank. Although the link Nigel referenced stated 6 years, I’m thinking that the Bank would know they actually have 12 years (if not longer) to take any follow up action they deem necessary. So, at least another 6 years of worry/uncertainty! Grateful if you would share any information, thank you.
Regards , TD

[Nigel Howarth]

Hi TD

I expect Sunlover1972 may have resolved his/her problem as they've not been active on this forum for more than six months.

As for the Statute of Limitation Law, you can find a machine translation at Statute of Limitations Law (Law 66(I)/2012).

Regards,