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11 April 2017
Under the Civil Procedure Law,(1) a judgment creditor has the right to make any immovable property in which his or her judgment debtor is beneficially interested – and which is registered with the Department of Lands and Surveys in the debtor's name – security for payment of the judgment debt. This is done by registering the judgment at the Department of Lands and Surveys (by filing an office copy of the judgment) together with a memorandum describing the property and claiming that the debtor's interest in it should remain answerable for the payment of the judgment debt.
In Demetra Georghiadou v Alpha Bank Cyprus Limited,(2) the Supreme Court considered for the first time the right of a judgment creditor to register a judgment on a debtor's immovable property by way of a memorandum of judgment in circumstances in which the value of the property was much higher than the judgment debt. The Supreme Court affirmed that a judgment creditor is entitled to register a memorandum of judgment and establish a lien against immovable property regardless of the relationship between the value of the property and the amount of the judgment debt; indeed, a judgment creditor is entitled to register a memorandum of judgment against all of a debtor's immovable property.
The debtor in Demetra complained that the registration of a memorandum of judgment for a comparatively small debt (approximately €40,000) against immovable property valued at approximately €700,000 was a violation of her private property rights, since it disproportionately restricted her right to dispose of and use her property.
The Supreme Court dismissed the debtor's appeal and reaffirmed the following points:
This case is of great importance, not only because it concerns the right to enforce a judgment and achieve justice at the final stage of the proceedings, but also because there is a legislative proposal pending, which has been strongly criticised by the Cyprus Bar Association, to amend the Civil Procedure Law(3) to introduce a limitation on the right to register a judgment on land based on a correlation between the value of the property and the size of the debt.
For further information on this topic please contact Christia Middleton at Elias Neocleous & Co LLC by telephone (+357 25 110110) or email (email@example.com). The Elias Neocleous & Co LLC website can be accessed at www.neo.law.
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