The Nicosia District Court has issued a landmark ruling that could affect tens of thousands of mortgages after blocking a foreclosure due to potentially illegal additional charges in the mortgage contract.
The court granted an interim injunction halting the foreclosure of two apartments and a shop, marking the first time a Cypriot court has blocked a foreclosure based on the terms of the mortgage agreement itself.
The case challenged the legality of additional bank charges, commissions, and insurance premiums added to the mortgage beyond the principal, interest, and legal costs permitted by law.
Lawyers Andreas Mathikolonis and Chryso Papachristodoulou, representing the mortgage holders, successfully argued that the mortgage terms violated Articles 5, 8, 21(1)(c), and 21(2) of Law 9/65.
The court found that the plaintiffs demonstrated “more than a mere probability” of succeeding in their claim, noting that the mortgage agreement contained terms making the secured amount, interest, and related expenses indefinite and undeterminable.
The ruling’s significance stems from its potential impact on thousands of similar mortgage agreements held by banks and credit institutions containing identical terms.
The court determined that allowing the foreclosure to proceed would cause irreparable damage to the property owners, as they would lose ownership while their legal challenge regarding the mortgage’s validity remained pending.
