Parliament adopts EU legislation on bank contracts for the purchase of property

The House of Representatives plenary unanimously voted on Friday two bills into law, thus transposing EU rules into national law on contracts with credit institutions for the purchase of property.

The new legislation regulates mortgages which relate to property which will be the residence of the consumer, as well as credit contracts without collateral for amounts over Euros 75,000 on the renovation of property which is used as a residence.

The two bills had to be voted today, because as House President Demetris Syllouris explained addressing the plenary, the Republic of Cyprus is in danger of getting fined by the European Commission.

The new legislation creates a high level of consumer protection in the area of credit contracts by making it mandatory to review the credit capability of the consumer before offering the loan.

Such assessment should take into account factors such as the prospects the consumer has of keeping up with payments.

It also defines the licencing terms and preventative oversight relating to the establishment and monitoring of credit brokers and non credit institutions.

The legislation passed by Parliament also stipulates the information which should be included in advertising relating to the provision of consumer loans for the purchase of property, the provision of pre-contractual information to the consumer, by way of a standardised European information bulletin, the calculation of the total annual charge rate for comparative purposes, loans in foreign currency, the right of early repayment of loans and penalties for not abiding with the legislation.

Source: Cyprus News Agency