questions raised in the european parliament relating to...

QuestionsraisedintheEuropeanParliamentrelatingtoPropertyinCyprus

4 December 2008 E‐6513/08

WRITTEN QUESTION by Caroline Jackson (PPE‑DE) to the Commission

Subject: Property rights in Cyprus

The Government in Cyprus currently permits property developers to retain the title deeds to land that they develop, even after properties are built. Subsequently, property developers can use these title deeds as collateral to gain mortgages. However, should a property developer go bankrupt and have to surrender any title deed owned to their bank, homeowners living on that land risk losing their property.

This current situation appears to be in contravention of the constitution of Cyprus and possibly EC law. Does the Commission believe that it has any standing to intervene in any way in this situation, given that the interests of many citizens from EU countries other than Cyprus are being damaged by this practice?

19 December 2008 E‐6793/08

WRITTEN QUESTION by Mary Honeyball (PSE) to the Commission

Subject: Title deeds in Cyprus

I have been receiving correspondence from constituents regarding title deeds in Cyprus. My constituents have legitimately bought properties in Cyprus, but the Cypriot Government has allowed the property developers to retain the title deeds to the property after the purchase. Property developers can then use these deeds as collateral to obtain mortgages during the time that it takes for the Land Registry to issue the deeds to the buyer. If the developer goes bankrupt in this period the buyer stands to lose the property, despite having paid in full.

The Cyprus Property Action Group estimates that up to 40000 non‐Cypriot citizens risk losing their homes due to this.

Is the Commission aware of this situation?

Is the Cypriot Government breaching any EU directives by allowing this practice to take place?

20 January 2009 E‐0110/09

WRITTEN QUESTION by Syed Kamall (PPE‑DE) to the Commission

Subject: Property laws in Cyprus

A number of constituents have contacted me regarding the property laws of Cyprus. My constituents are among thousands of UK citizens who fear they have bought properties in the country and risk losing their homes.

My constituents are concerned that the Cypriot Government is not following EU and UN Charters on the protection of property rights by allowing property developers to retain title deeds to the properties. My constituents inform me that these developers can use deeds as collateral to obtain mortgages and if developers go bankrupt, buyers, who have already paid in full, can lose their homes. Some of my constituents tell me that they have been waiting seven years for the title deed to their property.

My constituents inform me that it is the situation in Cyprus that deeds do not come automatically. They tell me that there can be many problems such as mortgages on the land, antiquated property laws and builds without permits. My constituents add that buyers are fooled by claims that the Cypriot legal system, with regard to property law, is based on British law and that this is not the case.

I would like to ask the Commission if Cyprus, by allowing developers to retain title deeds even after full payment, is acting in accordance with EU/UN Charters and its own Constitution (Article 23) regarding property rights.

Does the Commission have any plans to take action against the Cypriot Government? If so, what action does it plan to take?

Joint answer given by Mr McCreevy on behalf of the Commission 26 February 2009

Written questions: E‐6513/08, E‐6793/08 , E‐0110/09

The Commission cannot make an assessment of the situation based on the information included in the question.

Therefore, and in order to collect all the necessary and relevant information, the Commission has addressed a request to the Cypriot authorities asking for detailed information on the legal provisions and practices regulating and operating in this sector. The Commission will take the necessary measures if it can establish the existence of infringement of EC law.

18 February 2009 E‐1022/09

WRITTEN QUESTION by Alyn Smith (Verts/ALE) to the Commission

Some of my constituents have brought to my attention the severe problems they are having with regard to obtaining the title deeds for properties they have bought in Cyprus. It appears that, in some cases, it is taking as long as 10 years to issue title deeds.

Even more worrying are reports that in some cases Cypriot banks are allowing developers to take out mortgages against property which has been paid for in full. As the developers still hold the title deeds, this puts the owners of the property in a very vulnerable position. If the developer goes bankrupt, the bank can sell the land and property on it to recoup their losses, leaving the owners with nothing.

Can the Commission state whether it is aware of this problem in Cyprus? Can the Commission also state whether the Cypriot government could be breaching any EU directives by failing to ensure the timely issue of title deeds to property owners?

20 March 2009 E‐1022/2009

Answer given by Mr McCreevy on behalf of the Commission

The Commission would refer the Honourable Member to its joint answer to Written Questions E‑6513/08 by Ms Jackson, E‑6793/08 by Ms Honeyball and E‑110/09 by MrKamall(1). As mentioned in these replies the Commission has already addressed a request to the Cypriot authorities asking for detailed information on the legal provisions and practices regulating operations in this sector.

7 June 2010 P‐4114/2010

Question for written answer to the Commission Rule 117 Daniel Hannan (ECR)

Subject: Cypriot developer mortgages

With reference to previous Parliamentary Written Questions E‐0110/09 by Syed Kamall, E‐6793/08 by Mary Honeyball and E‐6513/08 by Caroline Jackson, and with a view to the new legislation that is about to be put in place by the Cypriot Government to address the problem of withheld title deeds, would the Commission answer the following questions:

How many individual properties whose sales contracts are lodged at the Land Registry in Cyprus are encumbered with developer mortgages? How many of these have been sold to Cypriots and how many to non‐Cypriots?

What is the current balance of the total mortgage debt of Cypriot developers and the percentage increase, year on year, over the last three years?

Answer given by Mr Barnier on behalf of the Commission 28 June 2010

The Commission would like to draw the attention of the Honourable Member to the fact that it does not dispose of the statistical information required. The Commission believes that the questions at issue should be addressed to the competent national authorities in Cyprus.

11 June 2010 E‐4116/2010


Subject: Cypriot title deeds legislation

With reference to previous parliamentary Written Questions E‑0110/09 by Syed Kamall, E‑6793/08 by Mary Honeyball and E‑6513/08 by Caroline Jackson, and with a view to the new legislation about to be put in place by the Cypriot Government to address the problem of withheld title deeds, several questions arise.

Does the Commission agree that the new legislation will not address the main problem cited in numerous buyer petitions or indeed in the abovementioned parliamentary questions, since it will not help buyers whose properties are encumbered with developer mortgages?

Does the Commission agree that the sale of mortgaged property without full disclosure at point‐of‐sale is practised systematically by Cypriot developers and that it should be prevented in all EU countries, with stringent penalties for transgressions?

How can a prospective buyer find out whether there is a developer mortgage on a given property? Do any developers’ websites or brochures mention this possibility or indicate how to carry out searches to uncover the risk before purchase? Historically, buyers’ own lawyers have not alerted them to this risk in the majority of cases.

Finally, will the Commission send a fact‐finding mission to Cyprus to investigate these problems in more detail?

13 August 2010 E‐4116/2010

Answer given by Mrs Reding on behalf of the Commission

The Commission is aware of the difficulties faced by buyers of immovable property in Cyprus in relation to developer mortgages and withheld title deeds. Under the Treaty on European Union and the Treaty on the Functioning of the European Union, the Commission can only intervene if an issue of European Union law is involved. As explained in the answer to Written Questions E‑6513/08, E‑6793/08 and E‑0110/09 given by Commissioner McCreevy(1), the Commission contacted the Cypriot authorities in 2009 asking for detailed information on the situation. Based on the analysis of the reply received, the Commission concluded that the matter falls outside Union law as it concerns the establishment and application of the legal framework governing the acquisition and transfer of immovable

properties in Cyprus covered by Article 345 TFEU. Since the provisions of the TFEU shall in no way prejudice the rules governing the system of property ownership in a Member State, the Commission has no powers to intervene in this matter. For this reason, the Commission is not in a position to organise a fact‐finding mission. The Commission believes that the questions raised by the Honourable Member should be addressed to the competent national authorities in Cyprus.

The draft legislation which is said to address and regulate the issue of title deeds is still under negotiation in the Cypriot Parliament. The Commission trusts that the Cypriot authorities will adopt legislation on this specific matter in conformity with their international obligations, and in particular, the European Convention of Human Rights.

16 June 2010 E‐4279/2010

Question for written answer to the Commission Rule 117 Syed Kamall (ECR)

Subject: Land development in Cyprus

I have been contacted by a constituent who, in 2004, was introduced to Aristo Developers, one of Cyprus' biggest land developers, about an off‐plan development in Southern Cyprus, Limassol Star.

Following this introduction, my constituent, along with a number of others, bought a property off‐plan in the Limassol Star development. The plans also detailed a range of communal facilities which my constituent understood would be provided as set out in the development plans. As the development of the site proceeded, it became clear that the communal facilities and layout had been significantly altered from the plans.

My constituent claims that Aristo Developers reduced the size of the swimming pool and surrounding grounds and that they also replaced the communal clubhouse with a small kiosk, so that they could make room for two more villas in what had been designated as a communal area.

My constituent believes that Aristo Developers changed the development plans without consulting property owners. He has since established a legal action group with fellow property owners to pursue this matter in the courts. The group have obtained an engineer's report that confirms the changes to the site after they agreed the plans and an independent surveyor's report outlining the effect these changes may have had on both the resale value and rental potential of their properties.

Could the Commission confirm if it can provide any support to my constituent with this matter or if it can advise him on whom to approach for support, given that the legal action group have met considerable resistance in progressing their case in the court in Cyprus.

9 July 2010 E‐4279/2010


The Commission regrets to inform the Honourable Member that it has no general competence to intervene in or give legal advice to citizens on questions relating to individual court cases. Such cases must be determined in accordance with national procedural and substantive law. Therefore, in the absence of any apparent link with requirements laid down by the EU legal order, it is, therefore, for the competent Cypriot

court to determine whether the property owners can claim damages from the developer on the basis of national law.

The Honourable Member does not detail whether the problems encountered by the claimants are linked to the fact that they pursue their action collectively. The Commission is aware that groups of claimants may have difficulties to institute proceedings for damages against unlawful trading practices because not all Member States have introduced efficient procedures which allow for collective action. The Commission has been working for several years on European standards for collective redress and will launch, in the second half of 2010, a public consultation on the European approach to collective redress in order to identify whether and how additional forms of collective redress could fit into the EU legal system and into the legal order of Member States. To date, however, there is no EU legislation in place which would oblige a Member State to allow groups of claimants to introduce a court action or which would regulate the rights of the parties in such proceedings.

2 July 2010 E‐4966/2010

Question for written answer to the Commission Rule 117 Roger Helmer (ECR)

Subject: MRI Overseas Property

Is the Commission aware that a company operating under the name ‘MRI Overseas Property’ has been the source of numerous complaints by customers all over the European Union? Is the Commission further aware that under the allegations that they have broken several property management and furniture contracts they continue to operate, presumably under the impression that international clientele may be unaware of their dubious reputation?

Is the Commission prepared to take steps in order to alert potential customers of ‘MRI Overseas Property’ to the risks they may be taking by entering into a contract over international borders — particularly in the newer EU Member States Bulgaria, Cyprus and Romania?

17 August 2010 E‐4966/2010


The Commission is aware of repeated problems experienced by foreign nationals with property purchases in some Member States.

The remit of the European Union, and consequently of the Commission on matters of real estate property ownership, including planning consents, is very limited. These matters are within the competence of the Member States. The same applies to the performance of contracts in this area.

It is for the authorities and courts of the Member States concerned to enforce the relevant provisions and make sure consumers are adequately protected against fraudulent property schemes and other unfair commercial practices in their territory. Complainants would, therefore, have to seek redress through the competent administrative or judicial authorities in the relevant Member States and obtain appropriate advice, including legal advice. The European Consumer Centre in the United Kingdom may provide further guidance (Webpage: www.ukecc.net ; e‐mail: [email protected]).

26 July 2010 E‐6037/2010

Question for written answer to the Commission Rule 117 Ashley Fox (ECR)

Subject: Property in Cyprus

I have been approached by constituents in the southwest of England angry and disappointed by the building and planning regulations in Cyprus. British families seeking to retire abroad are being caught by unscrupulous builders who are selling properties without planning permission, without access and without utilities. It seems that once this happens there is little protection for expatriate residents caught in the system. Please could the Commission answer the following questions:

1. Is the Commission monitoring the problems in the planning and building regulations in Cyprus?

2. What measures is the Commission proposing to help Cyprus tighten up its building and planning legislation?

3. What redress do expatriates living in Cyprus have after being sold an illegal construction?

2 September 2010 E‐6037/2010

Answer given by Mr Tajani on behalf of the Commission

Building and planning regulations fall within the competence of the authorities of the Member State which should ensure their appropriate application and enforcement (monitoring and control of application and inspection).

The EU’s intervention is only justified in cases of potential discrepancy regarding the conformity of the national practices with the principles of the Treaty and EU secondary law, in particular in the domains of the internal market of construction products, energy efficiency and renewable energy sources, natural resources and environmental protection as well as health and safety at work.

According to the principles of the Treaty, all the provisions of building and planning regulations should be applied in an impartial, transparent and proportionate manner on the territory of competence of the authorities, whatever undertaking or citizen is concerned by these provisions.

As to the possibilities of judicial redress which expatriates living in Cyprus might have after being sold an illegal construction, the type of action available and the way to introduce it are governed by the national procedural law of the Member State where the competent court is located. European Union legislation only intervenes to determine which court is competent in a dispute involving two or more Member States and ensures that a judgment rendered in one Member State can be recognised and declared enforceable in another Member State. More specifically, Regulation (EC) No 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters(1), provides that a claimant can bring an action for damages against the other party either at his place of domicile or at the place where the damage occurred unless the parties have agreed that a specific court should have jurisdiction to settle their dispute. Where the dispute concerns rights in immoveable property, e.g. the transfer of ownership, only the courts at the place where the immoveable property is located are competent to hear the case. From the limited facts submitted to the Commission, it would seem that where British nationals residing in Cyprus are seeking redress against the seller of an illegal construction, an action for damages would have to be brought in the Cypriot courts unless the parties have agreed in the contract of sale or otherwise that their dispute should be settled in the courts of another Member State.

Directive 2005/29/EC(2) provides a legal framework applicable against unfair business‐to‐consumer practices, including those for immovable property. Claiming that a planning or a building approval has been authorised by a public or private body when this is not the case, or not complying with the terms of such an approval, endorsement or authorisation is considered an unfair commercial practice. According to the directive, Member States shall ensure that adequate and effective means exists to combat unfair commercial practices. However, the directive leaves to Member States the choice of the concrete legal and administrative measures to be put in place. Cyprus has adopted such transposition measures by the Law on the Control of Misleading and Comparative Advertising of 2007 and the Law on the Unfair Commercial Practices from Businesses to Consumers of 2007.

28 October 2010 P‐9137/2010


Subject: Developer mortgages in Cyprus

The Commission has already responded to Questions E‑6513/08, E‑6793/08 and E‑0110/09, among others, regarding the practice among Cypriot developers of retaining title deeds.

In a written response, Commissioner Charlie McCreevy has previously stated that: ‘The Commission will take the necessary measures if it can establish the existence of infringement of EC law.’

I have recently been informed by the Cyprus Property Action Group that, based on their extensive member input, there is evidence of continuing, systematic and habitual infringement of EC law by developers, estate agents, lawyers and banks.

The Unfair Commercial Practices Directive (29/2005/EC(1)) was introduced into Cypriot law on 18 July 2007, under Law 103(I), with the Cyprus Commerce Ministry being designated as the enforcement agency.

The law states that it constitutes a violation if a business omits — or hides from buyers — material facts which, if they had been made known, would have influenced the buyer’s purchasing decision. It is clearly a material fact that the property being purchased has a developer’s mortgage on it, and that in the event of the developer being forced into liquidation buyers could potentially lose their homes. This fact is systematically hidden from potential buyers by developers.

Cypriot banks even grant mortgages to buyers without informing them that the developer may also have a prior mortgage of his own on the property.

The balance of this spiralling developer debt is now thought to be in excess of EUR 7 billion; tens of thousands of buyers’ homes may consequently be at risk, entirely as a result of the lack of enforcement of this EU directive.

Given that an infringement of EC law can be proved through the simplest investigation, what action will the Commission take against Cyprus in order to protect EU nationals’ rights?

13 December 2010 P‐9137/2010


The Commission is aware that the purchase of immovable property in Cyprus has generated some degree of concern amongst a number of consumers.

With respect to the reply given by the Member of the Commission responsible for the internal market and services to Written Questions E‑6513/08, E‑6793/08 and E‑0110/09, as quoted by the Honourable Member, the Commission would like to recall also its reply to Written Question E‑6569/09(1) and its comments on Petition 0525/2009. Since the Commission's analysis has shown that the issuance of title deeds in Cyprus is one of the characteristics included in the system of property ownership established in Cyprus, its regulation falls within the scope of Article 345 TFEU. Furthermore, the Commission has no evidence that the competence of Cyprus’ authorities to establish and apply rules governing the system of property ownership, including the acquisition and transfer of immovable property and specifically the issuance of title deeds, is exercised in such a way that it could infringe Article 63 TFEU.

In relation to the alleged infringements of Union legislation by real estate market operators in Cyprus, please note that these problems may be addressed by the Unfair Commercial Practices Directive 2005/29/EC(2) which was transposed in Cyprus in July 2007(3), and has been in force in that State since December 2007.

Its provisions require that traders, including property developers, operate according to the requirements of professional diligence and that they display in a clear, intelligible and timely manner material information that consumers need to make informed choices.

However, only national authorities and courts are competent to assess, on a case by case basis, whether not informing consumers that there are title deeds on the property which is being offered constitutes a misleading omission in the sense of the directive.

In addition, it should be noted that in the area of real estate Member States can adopt national legislation which provides for stricter requirements than those set out in the directive, to enhance the level of consumer protection, and to the extent that these are compatible with other Union legislation.

At this stage, the Commission has no evidence that there is lack of adequate enforcement or administrative/judicial practice which is recurrent and incompatible with Union law in Cyprus.

Therefore consumers who feel affected by these practices should seek redress at national level and address competent national authorities. Consumers who are not resident in Cyprus may also seek further advice by addressing the European Consumer Centre

network, set up by the Commission and the Member States to help citizens facing cross‐border consumer problems. The relevant national contact points can be found on the ECC‐Net website(4).

16 February 2011 E‐001031/2011

Question for written answer to the Commission Rule 117 Derek Roland Clark (EFD)

Subject: Properties in Cyprus

I have received a complaint about alleged misrepresentation and fraudulent dealings concerning new properties on Cyprus. A constituent of mine stands to lose very significant amounts of money and he quotes the dealings of an agent and a major Greek and Cypriot bank.

It would seem that other people are involved in this affair and are losing money. I wish to enquire as to whether this matter is known to the Commission and, if so, whether any action is being taken.

23 March 2011 E‐001031/2011


On the basis of the information provided by the Honourable Member it has not been possible to identify the case in question.

18 February 2011 E‐001470/2011

Question for written answer to the Commission Rule 117 Arlene McCarthy (S&D)

Subject: European Standard for swimming pools and its application in the municipality of Paphos

On 25 July 2008, the European Committee for Standardisation approved a European Standard for swimming pools (Swimming Pools — Part 2: Safety Requirements for Design and Operation, EN 15288‐2.) This European Standard was to be given the status of a national standard, and all conflicting national regulations should have been withdrawn by March 2009 at the latest.

I represent a constituent who owns a property in a holiday complex in Cyprus. The complex has a shared pool, for the use of the property owners and their families and guests. Therefore, under European Standard EN 15288‐2 it would be classed as a Type 3 swimming pool, making it subject to different standards than a public swimming pool.

However, the municipality of Paphos in Cyprus has recently taken legal action against several local holiday complexes, including my constituent's, because they have not applied for a swimming pool licence. Under a 1994 Cypriot law, any pool which is used by more than one property is classified as a public swimming pool, and is subject to the same regulations, in contradiction of the European Standard.

What action will the Commission take to ensure that such unfair legal proceedings are immediately halted, and the correct European standards enforced? What aid and advice will the Commission provide to those residents who have already been taken to court regarding this wrongful application of Cypriot law, and paid fines?

23 March 2011 E‐001470/2011

Answer given by Mr Tajani on behalf of the Commission

The question concerns a conflict between national regulations and a European standard. The European Standard for swimming pools, EN 15288‐2, appears to conflict with Cypriot law on swimming pools.

European standard EN 15288‐2 was developed and adopted by the European Committee for Standardisation (CEN). Each CEN national member, which includes the national standardisation body of Cyprus, must implement the European standard by giving it the status of a national standard and withdrawing any conflicting national standard(s).

However, a CEN member may be confronted with the situation where it has to implement a European standard that does not comply with its national legislation. As the application of European standards is generally voluntary (unlike legislation), in these circumstances the CEN member is entitled to request a derogation from the mandatory replacement of the national standard by the European standard. This derogation is effected through the application of a so called ‘A‐deviation’, to be included in the informative annex to the European standard.

It is not clear whether the national standardisation body of Cyprus has requested an A‐deviation with respect to the European standard EN 15288‐2. However, even if this was not the case, national legislation would prevail over the European standard in the event of conflict. In the absence of EU legislation applicable to the safety of swimming pools, the obligation to seek a swimming pool licence will have to be assessed by the Cypriot courts.

30 March 2011 E‐002885/2011

Question for written answer to the Commission Rule 117 George Lyon (ALDE)

Subject: Recourse and redress for citizens defrauded by property investment schemes in other Member States

With reference to the ongoing problems being faced by European citizens who have bought into property investment schemes in other Member States, Cyprus in particular, and have then found that the property developers have allegedly acted unlawfully and have been unable to recover their investments:

— Is the Commission aware of the problem?

— To what degree can the Commission assist the affected consumers?

— Is the Commission taking any action already against the Paphos‐based developer ‘Alpha Panareti’ or any other major Greek or Cypriot agents or banks?

2 May 2011 E‐002885/2011


The European Commission is aware of a practical case within the context of the written question. It has already answered a written question on a comparable case by Mr Higgins(1). Concerning the second question, the Commission would refer the Honourable Member to its answer to Written Question E‑10188/10.

Concerning the third question, the Commission has in the circumstances described by the Honourable Member no possibility to directly take action against private companies.

7 April 2011 E‐003397/2011

Question for written answer to the Commission Rule 117 David Martin (S&D)

Subject: Property problems in Cyprus: Alpha Panareti

The Commission will be aware of the ongoing property problems in Cyprus in relation to the property development company Alpha Panareti. This fraudulent property scheme continues to affect thousands of EU citizens.

Can the Commission confirm whether Alpha Panareti is acting in violation of the Unfair Commercial Practices Directive (Directive 2005/29/EC) and of EU consumer protection legislation on contracts of sale (Directive 1999/44/EC)? If so what action does it intend to take?

27 May 2010 E‐003397/2011


The Commission would refer the Honourable Member to the replies given to Written Questions E‑003443/2009 and E‑003253/2009(1).

The remit of the European Union, and consequently of the Commission, regarding real estate property and planning law is limited. These matters are primarily within the competence of the Member States, provided of course that they exercise such competence in compliance with EC law, in particular with the freedom of establishment provided for in Article 49 TFUE. The existing EU consumer protection legislation on contracts of sale, Directive 99/44/EC(2), does not apply to the purchase and construction of immovable property.

The Unfair Commercial Practices Directive(3) (‘the directive’) protects consumers against misleading and aggressive commercial practices by traders, including traders marketing real estate to consumers. The directive has been transposed in Cyprus by the Law on the Unfair Commercial Practices from Businesses to Consumers of 18 July 2007. It is for the national authorities and courts to ensure that the provisions of the law transposing the directive are properly enforced. Infringement proceedings against a Member State for inadequate enforcement of the directive could only be considered if there is evidence of a systemic failure to enforce its provisions, which deprives consumers of adequate and effective means of redress against unfair commercial practices.

The Commission has been made aware of certain problems related to the sale of real estate in Cyprus. Thus, the Commission has decided to contact the relevant authorities in order to investigate this matter more closely.

19 July 2011 E‐007067/2011

Question for written answer to the Commission Rule 117 Seán Kelly (PPE)

Subject: Cypriot property developers and unfair commercial practices

Pursuant to Directive 2005/29/EC on unfair commercial practices and Cyprus Law 103 (I)/2007, which states that many buyers in Cyprus are without the title deeds to their homes, the current legal provisions in Cyprus to protect buyers’ rights are totally inadequate, despite assurances to the EU by the Republic of Cyprus. The head of the Cyprus Consumers Association recently admitted to the media that he had not heard of the law, despite Article 17 of the directive mandating that the state inform consumers.

Can the Commission confirm that the failure to transfer legal ownership of immovable properties immediately after purchase is an unfair practice in all circumstances, regardless of what contract was signed?

16 September 2011 E‐007067/2011


In reply to the question of the Honourable Member, it should be underlined that the failure to transfer legal ownership of immovable property following the conclusion of a contract cannot, in itself, be regarded as unfair in the sense of Directive 2005/29/EC on Unfair Commercial Practices(1) (the ‘UCPD’).

Indeed, matters of real estate property ownership are primarily within the remit of the Member States and are regulated by their national laws.

However, the Commission considers that the lack of pre‐contractual information to property buyers about the existence of developers' mortgages on the Cypriot properties offered for sale, which is the crucial fact having led to the subsequent lack of delivery of the title deeds, is an aspect to be assessed in the light of Article 7 of the UCPD concerning misleading omissions.

The Commission has therefore contacted the Cypriot authorities to further investigate this matter. In particular, the Commission has requested from them explanations on the Law on Sales of Immovable Properties that the Cypriot authorities have adopted last April and the concrete impact of which is still unclear.

The reply of the Cypriot authorities is currently being thoroughly analysed. Should the information received be unsatisfactory, the Commission will act, as appropriate, to ensure compliance with Union legislation and the protection of European citizens and consumers.

24 July 2012 E‐007403/2012

Question for written answer to the Commission Rule 117 Ian Hudghton (Verts/ALE)

Subject: Alleged corruption in Cyprus property industry

A significant number of constituents have complained to the Commission and MEPs about the incidence of alleged corruption in the Cyprus property industry.

Is the Commission aware of such breaches of the law, and what action has it taken in relation to complaints about property transactions in Cyprus?

27 September 2012 E‐007403/2012


As regards the problems faced by a number of immovable property buyers in Cyprus who failed to receive their title deed, the Commission has already initiated measures to ensure both an effective protection of EU consumers and a correct application of EU legislation.

As an example, the Commission sent an administrative letter to the Cypriot authorities enquiring about the actions carried out at national level to address the reported problems, in particular to ensure that buyers are provided with all necessary information in order to be able to take an informed purchase decision, such as on the pre‐existence of a mortgage on the property offered for sale, as required by Directive 2005/29/EC on Unfair Commercial Practices(1).

The Vice‐President and Member of the Commission responsible for Justice, Fundamental rights and Citizenship also met the Cypriot Interior Minister to raise this issue.

As regards the question related to the alleged corruption in the Cypriot property industry, the Commission has not conducted any particular analysis regarding this specific matter. If the Honourable Member has specific information regarding the extent and nature of alleged corruption within this sector in Cyprus, he can provide it to the Commission. The Commission is currently working on an EU anti‐corruption reporting mechanism through which all Member States' efforts against corruption will be assessed. The first such report shall be published by the Commission in 2013, making country‐specific recommendations for each Member State.

24 September 2012 E‐008346‐12

Question for written answer to the Commission Rule 117 Sir Graham Watson (ALDE)

Subject: Access to documents in EU‐Cypriot case concerning immovable property in Cyprus

Person X applied to the Secretary‐General of the Commission on 16 July 2012 for access to certain documents related to the correspondence that has taken place between the Commission and the Cypriot authorities since 2011 concerning immovable property in Cyprus.

He had previously requested these documents from Vice‐President Reding, but had been informed that her DG could not supply these documents because pre‐infringement proceedings had been initiated against Cyprus: however, Person X could apply to the Secretary‐General of the Commission for them.

However, in response to his application to the Secretary‐General, Person X has now received a letter refusing his application and stating that disclosure of the documents could jeopardise the ongoing search for an amicable solution to the dispute.

Can the Commission provide fuller information as to why Person X is unable to access the requested documents?

5 November 2012 E‐008346/2012


Regulation No 1049/2001(1) lays down the rules for granting (public) access to European Parliament, Council and Commission documents.

Article 4 of the regulation states the grounds for refusing to grant access to these documents. In particular, Article 4(2) clarifies that the access can be refused where such disclosure would undermine the protection of the purpose of inspections, investigations and audits, unless there is an overriding public interest in disclosure.

Considering that the disclosure, even partial, of the documents mentioned by the Honourable Member, which have been sent in the context of an ongoing pre‐infringement procedure, might jeopardise an amicable solution of the dispute and thus the whole process of investigation and inspection, the European Commission has decided to refuse access to the documents related to the EU‐Cypriot case concerning immovable property in Cyprus.

13 November 2012 E‐010363‐12

Question for written answer to the Commission Rule 117 David Martin (S&D)

Subject: Commission report on property development in Cyprus

The Commission will be aware that in January 2012 it received a reply to a letter it had sent to Cyprus. The Commission’s initial letter was an enquiry into the actions carried out at a national level to address the practices of property developers and the measures taken to ensure that consumers are adequately informed about the Cypriot law on unfair commercial practices.

In April 2012 the Commission finalised its report on the Cypriot response.

Could the Commission outline the conclusions of this report and provide an update on the situation regarding consumer protection in dealings with property developers (this question is with regard to Alpha Panareti Limited specifically)?

18 December 2012 E‐010363/2012


The Commission cannot communicate on the content of the Cypriot letter mentioned by the Honourable Member. Indeed, this document has been received in the context of an ongoing pre‐infringement procedure and its disclosure, even partial, might jeopardise the process of investigation and inspection of the dispute and its resolution.

Answers to written questions E‐8121/2012, E‐6765/2012 and E‐9932/2012(1) provide an update on the various actions initiated by the Commission in order to address the problems faced by many immovable property buyers in Cyprus and ensure that consumers are adequately protected.

17 December 2012 E‐011456‐12

Question for written answer to the Commission Rule 117

Edward McMillan‐Scott (ALDE)

Subject: Payment of developers' debts in Cypriot property cases

Purchasers of property in the Elena Gardens development in Xylofagou, Cyprus, have recently been told by the Cypriot Government that they will, in effect, have to pay off the debts of developers who have gone into liquidation without completing building work.

SNK Venus Homes Exclusive Ltd went into liquidation after taking GBP 840 000 from a purchaser without completing the construction of his villa, and leaving some four or five other buildings incomplete as well. The property purchasers had been assured, by both lawyers and the Cypriot Government, that they were covered by something called ‘specific performance’, which protects the purchaser in all circumstances and ensures that they are registered as the legal owner of the property to which their contract refers.

The Cypriot Government has allowed banks to lend large amounts of money to developers using, as security, properties already sold to unsuspecting purchasers and registered with the land registry. The developers have since defaulted on these loans and, in the case of SNK Venus Homes Exclusive Ltd, gone into liquidation as a result.

Property owners who refuse to pay back the developers’ debt to the banks risk having any properties they may own in other EU countries repossessed to cover monies the banks recklessly lent developers against properties they did not own in the first place.

Whilst national property rights are indeed a matter of subsidiarity, could the Commission:

1. Explain what can be done at EU level in such cases to protect innocent property buyers from across the EU?

2. State whether Cyprus, in this particular case, has contravened the Unfair Commercial Practices Directive (2005/29/EC), specifically Article 7 on ‘misleading omissions’, which states that a commercial practice shall be regarded as misleading if ‘in its factual context, taking account of all its features and circumstances and the limitations of the communication medium, it omits material information that the average consumer needs, according to the context, to take an informed transactional decision and thereby causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise’?

12 February 2013 E‐011456/2012

Answer given by Ms Reding on behalf of the Commission

The Commission is well aware of the problems faced by purchasers of immovable properties in Cyprus, because of the practices of developers and banks.

The Commission, indeed, agrees with the Honourable Member that the lack of pre‐contractual information to property buyers about the existence of developers' mortgages on the Cypriot properties offered for sale, is an aspect which can be assessed in the light of Article 7 of the Unfair Commercial Practices Directive concerning misleading omissions. It is however the primary competence of the national authorities and courts to investigate any potentially misleading practices of individual companies operating on their territory.

Answers to written questions 8121/2012, E‐6765/2012, E‐9932/2012 and 10363/2012 provide an update on the various actions initiated by the Commission in order to address the problems reported and ensure that EU consumers are adequately protected.

Nigel Howarth Cyprus Property News 14

th March 2013

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