British buyers with homes in Cyprus looking to sue a developer and a British-based sales agent for fraud can pursue their legal challenge in the High Court, a judge has ruled.
The judgement was handed down in the jurisdiction case involving Alpha Panareti Limited, Andrea Ioannou and UK business Roseberry Overseas Property Developments (ROPUK).
The case was heard in June, and in the judgement it was announced that the High Court in London will hear their cases in certain circumstances.
Alpha Panareti says it will appeal the decision.
The case is seen as a test for buyers seeking redress in one European Union state claiming they have been defrauded by a property investment scheme in another EU nation.
Hundreds of buyers affected
Lawyers for the property owners say they want to take the case to court in London to save costs from British investors and to speed up the case as Cypriot courts are bogged down with other litigation cases.
Lawyers believe several hundred UK buyers invested their savings in Cyprus property after following advice from Roseberry, which offered help in buying ‘off-plan’ villas.
Prospective buyers were shown pictures complete with architect drawings and were allegedly told they could cover any mortgage repayments by renting out the homes to holidaymakers.
The advisers explained the mortgage was with Alpha Bank, based in Cyprus, but would be in Swiss Francs because the currency was stable.
Investors claim they never saw details of the mortgage and no-one explained the risks involved.
Alarmed investors then received bank statements showing that the developer had drawn down their money without completing their properties. The bank also failed to check how work was progressing.
Homes at risk
Roseberry went on to create a network of agencies around the UK selling villas in Cyprus – now many buyers have seen mortgages increase, few properties are complete and Alpha Bank is issuing writs for non-payment of the loans. Many investors could lose their UK homes as a result of the action.
After questions in the European Parliament about the developers, the European Commission has sent a letter to the Cypriot government asking for an explanation of what has happened – and whether consumers have been adequately informed about the Cypriot law regarding ‘Unfair Commercial Practices’.
The commission has threatened to step if the Cypriot government cannot offer a reasonable explanation.
Meanwhile, many unsatisfied buyers are gearing up for their High Court showdown in London.
This is an English disease. Get rich quick by buying off plan then selling for a quick profit or renting out then selling for a quick profit. I dont disagree that these people might have been pursuaded by realtors to invest, but these people were looking for a way to make quick money, much the same as in Spain. If they were lied to, then they should get refunds. If they just walked in blinded by greed, tough luck. I feel that all the Brits lined up to buy Greek property from distressed homeowners should lose their shirts. They are no better than vultures.
I for one bought a one bed apartment as a second family home in a country which I loved… The way that we have all been misled and lied to by the developer, the bank and the acting solicitors is on quite a scale unimaginable. The distress that this has caused my family is untold, so before judging people please get the facts… The majority of the people who purchased from these unscrupulous rouges are hard working people looking for an investment/holiday home for when they get older or for their family to enjoy!!!