What will happen to Cyprus real property recovered by banks for debts?

Now the Government Committee discusses amendments to the law on banks’ right to take ownership of any Cyprus property recovered from defaulted clients. One of the provisions concerns the right to allow  the property for rent, maintain its due condition as well as making contributions to complete its construction.

According to the current regulations, Cyprus banks have no right to recognise recovered real property within a period of 3 years, which implies the commitment to sell it within this period. Some legislators have requested to extend this period to 5 years in view of the fact that the property market overflow might cause prices to crash. Nevertheless, Cyprus as the EU member is bound to accord these amendments as per EU instruction.

One of regulations prohibits Cyprus banks to put the property up for auction at a discount over 20% of its market value. The rebate might be increased to 50% in the event that no bidder expresses interest in the object.