Foreclosure in Cyprus: the notices, and the 45 days to challenge them

Most borrowers meet the foreclosure procedure for the first time when a letter arrives naming a date for the auction of their home. By then a clock has usually been running for months, and the question is no longer whether the debt is owed but whether the steps that led here were taken correctly. Part VIA of the Transfer and Mortgage of Immovable Property Law, Law 9/1965, sets out those steps, and it is precise about them, which is what makes them worth checking.

Two notices, in that order

Nothing can be sold until the mortgagee has served a first notice and the borrower has failed to answer it. Section 44C(1) requires the mortgagee to serve on the mortgagor, and on any other interested person, a written notice in Type «I» of the Second Schedule, accompanied by a statement of account of the mortgage debt claimed, the interest and all the costs of recovering it, calling for payment and allowing a period of not less than forty five days from service. The notice must tell the mortgagor that if the sum is not paid the mortgagee may exercise its right of sale under that Part.

Where the mortgagee is a licensed institution the Type «I» notice may only be sent at least thirty days after the notice in Type «TH» of the same Schedule. A second effect of service is administrative and useful: once the Type «I» notice has been served, any competent authority must supply the mortgagee, on request, with all the information about the taxes, fees and charges burdening the property, within fifteen days.

Only if the first notice goes unanswered does the second follow. Under section 44C(2) the mortgagee may then serve a second written notice, in Type «IA», stating that the property is to be sold by auction. That notice must be served not less than forty five days before the day and hour fixed for the sale.

Law 76(I)/2026, published on 21 April 2026, replaced the Type «I» notice form itself in the Second Schedule. Where a notice on the old form is produced for a debt called in after that date, the form is a thing to check rather than assume.

The forty five days to apply to set it aside

The Type «IA» notice is challengeable, and the window is short. Section 44C(3) allows the mortgagor, and any interested party, to file an appeal in the District Court to set aside the notice of intended sale within forty five days of the date of receipt of that notice. The period runs from receipt, not from the date on the notice, and not from the auction date.

The grounds are closed. The subsection allows the application only on the following:

• the notice served does not meet the requirements of the prescribed form and content;
• the notice has not been duly served;
• the notice was sent before the period for payment to the mortgagee had expired;
• an interim prohibitory order has been issued in the mortgagor's favour under section 32 of the Courts of Justice Law;
• the mortgagor is an eligible debtor and the licensed institution, though obliged to under Part VIA of the Establishment and Operation of a Single Agency for the Out-of-Court Settlement of Financial Disputes Law, has not come to mediation;
• a protective order has been issued in the mortgagor's favour under the Insolvency of Natural Persons (Personal Repayment Plans and Debt Relief Orders) Law, or an application for one is pending before a court;
• the mortgagor's participation has been approved in the ESTIA scheme for non-performing loans and support of vulnerable social groups, or in any other government credit facility subsidy scheme, provided the mortgagor accepts and keeps to the agreement and the credit obligations arising from it, or an application is pending;
• the notice concerns a property that is a primary residence as defined in the Rent for Instalment scheme, approved by Council of Ministers Decision 95.054 of 12 July 2023, in respect of which an application to join the scheme has been approved, or an application or objection has been filed and is pending where the applicant or a family member meets the conditions in term 2.2.2 or the applicant meets those in term 2.5 of that scheme.

A ground that is not on the list is not a ground, however unfair the underlying position feels. That is why the useful work on a foreclosure file is done on the documents and the dates rather than on the merits of the debt, and why the file should reach a lawyer while the forty five days are still running.

What the court must now do, and how quickly

Since May 2026 the application has a court that must decide it on a timetable. Law 116(I)/2026, published on 12 May 2026, replaced section 22C(1) of the Courts of Justice Law, Law 14/1960, so that every District Court Judge with jurisdiction to try disputes between a borrower, guarantor or security provider and the creditor about the debit balance of a terminated credit facility, including overcharges and unfair terms, and disputes about the sale of a mortgaged dwelling under Part VIA of Law 9/1965, has power to hear the appeal and to set the Type «IA» notice aside.

The new section 22C(2) fixes the pace. The hearing must be completed and judgment on the merits given within twelve months from the referral of the case to the trying judge, unless the court orders otherwise, and that includes any decision on the appeal or on the setting-aside application. A fresh Type «IA» notice may be served again only after that twelve month period has passed from the setting aside, or after a final judgment in the pending proceedings.

Section 22C(3) keeps a second door open. If no final judgment has been given and a new Type «IA» notice is received, the mortgagor may bring a further application to set that one aside, where special reasons exist as the court determines.

Section 22C(4) closes the whole of it in one situation. Where the mortgagor has at any material time acted in bad faith, subsections (1) to (3) and the setting-aside ground do not apply, to the original notice, to a new one, or to any later notice under Part VIA. Conduct during the arrears, and in the correspondence, is therefore part of the case rather than background to it.

There is a transitional rule worth knowing if a notice is already in hand. Where the Type «IA» notice had already been sent when Law 116(I)/2026 came into force, the forty five days run from the date that Law came into force rather than from receipt of the notice.

The thirty days to take the figure to the Financial Ombudsman

A borrower who disputes the amount rather than the process has a separate and earlier route. Section 44C(4) allows an eligible debtor to file a complaint with the Financial Ombudsman under the Establishment and Operation of a Single Agency for the Out-of-Court Settlement of Financial Disputes Law within thirty days of receiving the Type «I» notice, about the sum the licensed institution states in that notice as due. Law 76(I)/2026 set that period at thirty days, from the date of receipt of the notice; it had been twenty one.

The Ombudsman must examine the complaint and give a final written decision within forty five days of its submission, and must serve the complaint on the institution at once. The institution may not proceed with the intended sale before the forty five days have passed, or before the tenth working day after the decision issues, whichever is later.

What happens next depends on acceptance. Both the institution and the debtor must declare within ten working days of the decision whether they accept it as binding. If the decision is not accepted as binding, whether because they disagree or because the institution does not agree, the intended sale procedure is suspended until a competent court decides the amount lawfully due, that decision being a first instance judgment in a civil action, pending or to be filed, which has the amount claimed as an issue in it.

If it goes to auction anyway

Two provisions decide what the property can be sold for. Under section 44IA(1), where the mortgagee has not sold within six months of completing the first auction procedure, it has the option of buying the property itself at market value, on the last valuation carried out under that Part or on a fresh valuation under section 44D. Under section 44IA(2) it may instead continue its attempts to sell under sections 44Z and 44H, and since Law 101(I)/2026, published on 22 April 2026, it must do so at a reserve price of not less than fifty per cent of the market value of the property. That subsection previously allowed those later attempts to be made with no reserve at all.

After the sale, section 44IB requires the mortgagee to apply to the District Lands Office within thirty days for transfer into the buyer's name, supported by an affidavit of the mortgagee or the auctioneer confirming faithful compliance with Part VIA. That affidavit is the document a buyer, and a challenging borrower, both have an interest in.

What to send us

The notice you received, with its envelope, because the date of receipt is what the forty five days run from. The statement of account that came with it. The mortgage deed and the facility agreement with any restructuring of it. And tell us whether you have applied to any scheme, whether there is an insolvency application, and whether the bank has been to mediation, because five of the eight grounds turn on facts of that kind rather than on the notice itself. Do not send confidential documents before we confirm we can act.

Questions we are asked

Sources

• The Transfer and Mortgage of Immovable Property Law, Law 9/1965, Part VIA
• The Courts (Amending) Law of 2026, Law 116(I)/2026
• The Transfer and Mortgage of Immovable Property (Amending) Law of 2026, Law 76(I)/2026
• The Transfer and Mortgage of Immovable Property (Amending) (No. 2) Law of 2026, Law 101(I)/2026