Cypriot property mis – selling cases in UK court

Cypriot property mis – selling cases in UK court

UK victims of alleged mortgage and property mis-selling in Cyprus are anxiously awaiting an imminent decision of the High Court as to whether their cases can be determined in the English Courts.

The cases are being brought by hundreds of UK mis-selling victims against Alpha Bank Cyprus and numerous Cypriot property developers, agents and lawyers.

The issue is whether the English Courts have jurisdiction to determine such claims. The challenge is brought by Alpha Bank, one of the banks accused of mis-selling mortgages.

Alpha Bank and other Cypriot banks have a substantial interest in the cases being heard in Cyprus for various legal and tactical reasons.  Alpha Bank’s application is to be heard in the High Court in London, starting today.

An estimated 15,000 UK residents have succumbed to glossy advertising and sales talk, buying Cypriot properties off-plan.

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Large loans were eagerly provided by Cypriot banks, frequently in Swiss Francs for their low and supposedly stable interest rates, against overvalued properties, often never adequately built out.

But since the Swiss Franc’s strengthened value and relentless interest rate hikes, investors have paid a heavy price: unsaleable and unlettable apartments, enormous loan obligations and huge negative equity, all aggravated by the property crash.

Duncan McNair, a lawyer based at Cubism Law in London, is instructed by around 100 UK victims of mortgage and property mis-selling in Cyprus.

He has been asked to help the victims to fight the Alpha Bank application.
 ”Commonplace features of such cases are a failure to advise on the risks of foreign currency mortgages, serious misrepresentations as to the property itself and dubious powers of attorney held by Cypriot lawyers, as are unhealthily close relationships between the banks, developers and selling agents,” said McNair.
“These parties have profiteered like Croesus, and, like him, they must face the consequences.”
 With approaching €2 billion of lending to UK nationals on their books, of which two-thirds is non-performing, local banks are under pressure, intensified by claims such as those brought by McNair’s clients.
“The situation for victims in the UK is grave and they await the outcome of this decision with acute anticipation,” said McNair.
“Regrettably the Cypriot system can be ponderous, uncertain and unreliable.  Those familiar with the respective systems in England and Cyprus have moved fast to position their clients to be best placed under EU law to assert that their claims should be determined in the English Courts.”

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