Cypriot home dream turns into a nightmare

British buyers seek redress as mortgage payments on their island properties double, deeds fail to materialise and bailiffs threaten. By Cheryl Markosky

When Steve Noonan, a legal adviser for Cleveland Police, bought his two-bedroom apartment off-plan at the Cypriot development of St Nicolas in the town of Chloraka, near Paphos for only £160,000 in 2008, it seemed too good to be true.

"And the problem is, it was too good to be true," he says, particularly when a debt collection agency in the UK started sending him letters, texts and phone calls demanding mortgage repayments on his Cypriot property, or his family home in Skelton, Yorkshire and other assets would be repossessed by bailiffs.

The deal involved a UK-based agent, the major Greek and Cypriot Alpha Bank, and the Cypriot developer Alpha Panareti. Mr Noonan and his wife Eugenie say they were told that repayments to Alpha Bank would be only £560 a month through a 25-year interest-only loan.

"I didn't have the full amount, so this suited me. The plan was to use the apartment for about six weeks of the year for holidays, renting it out the rest of the time to pay the mortgage. I thought that if, in 25 years' time, its value had risen, it would benefit our three children, now aged from 18 to 37," Mr Noonan explains.

Alarm bells rang when his mortgage repayments more than doubled from £560 to £1,200 a month after the bank insisted on Mr Noonan taking out his mortgage in Swiss francs, deemed to be a stable currency at the time. He's now paying more than £300,000 for his £160,000 apartment that's thought to be worth only £65,000 today. In total, Mr Noonan estimates he's £82,000 out of pocket to date and he's yet to hold a title deed in his hands.

He also says that the bank was signing off payments before his apartment reached the appropriate stages of build. "The developer would say the building is now at foundation level, so it needs the next tranche of money, without the bank going and checking that was the reality," says Neil Heaney, an ex-Premier League footballer, who now helps overseas investors through his property investment recovery company Judicare (www.judicaregroup.com). "In some cases I've come across, loans were drawn down by 90 per cent and ground hadn't even been broken."

In a claim, which could also be the trump card to extricate some British investors from crippling loan agreements, it has been alleged that Cypriot lawyers may not have complied with crucial legal formalities.

According to a Cypriot barrister Christos Triantafyllides, who has been employed by Judicare: "For power of attorney to be legally valid by Cypriot law, signatures must be ratified by the certifying officer to make sure he knows the person or sees identification that proves who he is. If this is declared to be illegal, then all other documents signed through the use of power of attorney are also illegal. This would make the loan agreement invalid."

It's very important that British buyers are released from these loan agreements such as the one in Mr Noonan's name, adds Mr Triantafyllides, with claims believed to be running into the millions. "It's not good for Cyprus or the property industry," he adds. "But it is good that the legal mechanism to safeguard the rights of people is in place."

British buyers in Cyprus often suffer from a false sense of security, says Richard Way, the editor of Overseas GuidesCompany.com. "You drive on the left there, English is practically the Republic's second language, you can shop in Marks & Spencer, and most significantly, much of the English legal system introduced there before independence in 1960 remains.

"It's easy to see why Brits felt at ease buying on the island and weren't as wary about legal representation or finer details of mortgage contracts as they should have been."

Mr Way urges people thinking of buying in Cyprus to seek truly independent advice. This will strike a note with restaurateur Paul Sutton, who's part of a class action with 19 other Britons in a case also involving Alpha Bank which is progressing through the courts. In 2006, he bought two properties from developer Solterra at Sinoro (a hotel turned into a luxury apartment complex) near Paphos, and at Polyxenia in Pernera, eight miles from Ayia Napa.

Mr Sutton bought his two-bedroom apartment at Sinoro for £175,000 and his beach townhouse at Polyxenia for £255,000. Similarly, his Swiss franc loans repayments have doubled, and debt collectors seeking to confiscate his home and assets in Cottingham, East Yorkshire have also plagued him after he stopped paying his Cypriot mortgages on the advice of lawyer Stefano Lucatello from Kobalt Law.

"The statements sent by the bank, listing extra charges that I and my accountant didn't understand, claim I still owe £179,695 on the Sinoro apartment, which is more than I paid for it in the first place.

"Equally, after regularly paying £800 a month mortgage for two years, I'm being told I owe double the amount I paid for my townhouse at Polyxenia as well," says Mr Sutton, 60.

An added issue in Mr Sutton's story is claims that Eastern European workers (including some of Solterra's builders) are living in the unsold Sinoro apartments, which has allegedly led to damages.

Sinoro homeowners have reported the "destruction" of the gardens, pool and some apartments and claim their homes have been illegally inhabited by workers.

"This means that I've had no rental income for two years, as no one wants to rent there," adds Mr Sutton, who says the developer, when confronted about the unwelcome guests in the development, has dismissed his concerns

Mr Lucatello says the wider implications across Cyprus of alleged mis-selling of mortgages and potentially negligent legal work "could bring down the (Cypriot) banks".

He also hopes bringing these issues to the forefront will prompt the government to sort the problem of title deeds in Cyprus, which can take 10 to 15 years to obtain and in some parts of the island there are major land disputes taking place.

Alpha Bank, Alpha Panareti and Solterra were all approached for comment but failed to respond.

Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
Sport
Steven Gerrard had to be talked into adopting a deeper role by his manager, Brendan Rodgers
sportThe city’s fight for justice after Hillsborough is embodied in Steven Gerrard, who's poised to lead his club to a remarkable triumph
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
News
Waitrose will be bringing in more manned tills
newsOverheard in Waitrose: documenting the chatter in 'Britain's poshest supermarket'
VIDEO
News
The energy drink MosKa was banned for containing a heavy dose of the popular erectile dysfunction Levitra
news
Environment
People are buying increasing numbers of plants such as lavender to aid the insects
environmentGardeners rally round the endangered bumblebee
Sport
Australia's Dylan Tombides competes for the ball with Adal Matar of Kuwait during the AFC U-22 Championship Group C match in January
sportDylan Tombides was diagnosed with testicular cancer in 2011
News
Ida Beate Loken has been living at the foot of a mountain since May
newsNorwegian gives up home comforts for a cave
Extras
indybest10 best gardening gloves
Arts & Entertainment
tvIt might all be getting a bit much, but this is still the some of the finest TV ever made, says Grace Dent
News
Posted at the end of March, this tweeted photo was a week off the end of their Broadway shows
people
News
peopleStar to remain in hospital for up to 27 days to get over allergic reaction
Arts & Entertainment
The Honesty Policy is a group of anonymous Muslims who believe that the community needs a space to express itself without shame or judgement
music
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Life & Style
life
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Helpdesk Engineer Apprentice

    £150.00 per week: QA Apprenticeships: This company has been providing on site ...

    Telesales & Sales Support Apprentice

    £221.25 per week: QA Apprenticeships: This company is a well established Inter...

    Client Relationship Manager - SQL, Python

    £40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

    **Financial Services Tax**

    £35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

    Day In a Page

    How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

    How I brokered a peace deal with Robert Mugabe

    Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
    Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

    British Muslims's Happy video attacked as 'sinful'

    The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
    Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

    Michael Williams: Do as I do, not as I pray

    Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
    A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

    A History of the First World War in 100 moments

    A visit to the Front Line by the Prime Minister's wife
    Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

    Jenny Collier: 'Sexism on stand-up circuit should be extinct'

    The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
    Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

    Cannes Film Festival

    Ken Loach and Mike Leigh to fight it out for the Palme d'Or
    The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

    The concept album makes surprise top ten return

    Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
    Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

    Lichen is surprise new ingredient on fine-dining menus

    Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
    10 best baking books

    10 best baking books

    Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
    Jury still out on Manchester City boss Manuel Pellegrini

    Jury still out on Pellegrini

    Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
    Ben Stokes: 'Punching lockers isn't way forward'

    Ben Stokes: 'Punching lockers isn't way forward'

    The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
    Mark Johnston: First £1 million jackpot spurs him on

    Mark Johnston: First £1 million jackpot spurs him on

    The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
    Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

    Ricky Gervais: 'People are waiting for me to fail'

    As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
    Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

    Mad Men returns for a final fling

    The suits are still sharp, but Don Draper has lost his edge
    Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

    Google finds a lift into space will never get off the ground

    Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit