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The Minister for Europe (Mr David Lidington)
It is, as always, a pleasure to serve under your chairmanship, Mr Gray. Let me start by congratulating the hon. Member for Denton and Reddish (Andrew Gwynne) on securing this debate and paying tribute to the work of the all-party group under the chairmanship of my hon. Friend the Member for Stone (Sir William Cash).
From the large number of items of correspondence that I get from Members from all parts of the House on property disputes, I am certainly aware of the kind of problems that the hon. Member for Denton and Reddish described and of the traumatic impact that property disputes often have not only on the finances, but on the mental wellbeing of the people we represent. Officials in our consular directorate in London are in regular contact with our high commission in Nicosia. Together they brief me and the Foreign Secretary on the scale of the property problems in Cyprus and the impact they are having on individuals.
While today’s debate has focused on the difficulties in Cyprus and the case of the hon. Gentleman’s constituent in particular, it is a sad reality that property disputes are common in other parts of the world. I have to be frank with the House: the ability of our consular staff overseas to help in individual cases is very limited. That is partly because millions of British citizens live overseas and many thousands of others visit foreign countries every year. It is simply not possible for the Foreign Office to become involved in private legal disputes to which British citizens overseas are party, whether they are related to property, commercial interests or family disputes.
Another issue is that property laws are the competence of individual sovereign states. We have no more authority to intervene in matters concerning Cypriot domestic legislation than the Governments of Cyprus, Spain, Greece, Turkey or Bulgaria—or any other nation where there are numerous property disputes—do to intervene in United Kingdom domestic legislation. Our position on property disputes is consistent with the approach taken by the US, Canadian, Australian and New Zealand diplomatic services. We will, however, do two things. We will continue to try to provide as accurate and up-to-date information as we can to our citizens about the risks involved in buying property overseas and about what they might do to manage those risks, and we will continue to lobby hard the Cypriot and other Governments to try to persuade them to address some of the generic problems that these distressing individual cases highlight.
Sir William Cash
Again, I just want to put something on the record. The Bill to which I referred, which was passed on 3 September in the Parliament of the Republic of Cyprus, is not yet available in English. I know the high commissioner has requested it, but it is taking some time. We are now almost in November. I am told that until it is provided, the general information—for the sake of those who read transcripts—can be found on the website of Nigel Howarth of Cyprus Property News. However, the Bill does not apply to mortgages that were dealt with in Swiss francs.
Mr Lidington
What my hon. Friend says is right. I want to refer to that Bill later, but we continue to urge the Cypriot authorities to publish an English-language version of the new law as soon as possible and to make available any guidance that might need to be issued in association with the statute itself. I am sure that the forthcoming meeting of the all-party group with the high commissioner for Cyprus to the United Kingdom will provide a further opportunity for such persuasion to be offered.
We publish information on the high commission’s gov.uk website and, more generally, the FCO publishes a guide entitled “Support for British Nationals Abroad”, which also provides general advice for British citizens who are thinking about buying a property in another country. Last month our consular officials attended “A Place in the Sun”, an exhibition in Birmingham, to talk directly to people considering going to live abroad. The purpose of these initiatives is to help to ensure that our citizens are better informed of the risks and challenges before they take the plunge. For example, we always urge people to take proper professional advice, including legal advice, before buying property.
In some cases, such as the one that the hon. Member for Denton and Reddish has described, part of the problem seems to derive from an alleged failure of the legal adviser to provide advice of a sufficiently high standard. In other cases, sadly, we have come across British citizens who have simply not taken adequate legal advice in the first place. Of course, there are others who, on the face of things, would seem to have been the victims of deliberate misrepresentation. Every case is different, which is why it is difficult to provide a template that will apply equally to every individual case.
Jim Shannon
I congratulate the hon. Member for Denton and Reddish (Andrew Gwynne) on securing this debate. Those who take legal advice perhaps anticipate that it will be correct, but sometimes it turns out not to be. Is it possible for the British consulate, in whatever country they are in, to have a list of legal minds—solicitors and barristers—who would have enough knowledge to be able to give advice to people?
Mr Lidington
We do keep and make available lists of solicitors and other legal advisers in all the countries where we have posts, and we usually know whether the practices have people who speak English. What we cannot do is give an assurance about the quality of the legal advice. We can say that somebody has been duly qualified to practise law in a particular jurisdiction, but it would simply not be possible for our consular staff to grade the relative performance of solicitors in a foreign country.
There are cases—if I may address one of the points raised by the hon. Member for Denton and Reddish—where the British courts have declined to enforce a European enforcement order because they have found, after scrutiny, that the documents had not been satisfactorily completed. Again, looking at the detail of a particular case is of key importance. Other options—this is all on the website—include contacting the various property action groups to share experience, contacting the Competition and Consumer Protection Service, the CCPS, in Cyprus, or considering financial arbitration, which has worked in some cases, although it is not suitable for all.
Although we have not been able to intervene in individual disputes, our high commission continues to be active. In March 2014, we organised a familiarisation visit to London for members of the Cypriot land registry to share our experience in e-applications, insolvency, alternative dispute resolution and complaint handling. The purpose of that is to try to make it possible for the Cypriot land registry to modernise and speed up its procedures, because one of the chief complaints is that it takes people a very long time to obtain the relevant deeds and documents.
The Cypriot land registry has now computerised its land information system in relation to the existence of encumbrances, and the Foreign Ministry in Nicosia has confirmed that land officers must now inform buyers in writing of any outstanding encumbrances on the property. Our high commission part-sponsored an alternative dispute resolution forum conference in October last year, and it organised two visits for the Cypriot financial ombudsman to this country to learn best practice from his UK counterpart. We continue to be active in helping with public sector reform, particularly with the Ministry of Justice and local government, which we believe will ultimately have a beneficial impact on the way in which property issues are dealt with.
We also lobby the politicians. During the past year—in 2014 and 2015—our high commissioner, Ric Todd, has raised the issue of non-performing loans with the Cypriot Finance Minister and property-related issues with the Attorney General. Both my right hon. Friend the Foreign Secretary and I have raised property issues experienced by British nationals with the Cypriot Government. I did so with Foreign Minister Kasoulides on 12 March this year, and the Foreign Secretary raised property issues again with him when he visited Cyprus on 17 July.
We have seen an effect. There is now a definite will on the part of the Cypriot Government to try to find ways to tackle property issues. As my hon. Friend the Member for Stone said, on 3 September this year the Cypriot Parliament passed a Bill that will help many British nationals and others affected by these issues. The impact of the Bill will be that purchasers who have met their contractual obligations should now be able to obtain their title deeds, although purchasers who have failed to comply with their contractual obligations will not be able to make use of the new law. Our high commission will of course continue to work with the authorities, and they and Ministers will continue to raise property issues whenever the opportunity arises.
The new legislation does not cover the issue of Swiss franc mortgages, which is an entirely separate issue and one that we advise is a private legal matter. We know that some purchasers have managed to renegotiate their mortgage terms. Some have taken legal action in the UK and other claims have been made to the Central Bank of Cyprus and to the Competition and Consumer Protection Service in Cyprus. Last month, Cypriot MPs asked their central bank to review how Swiss franc mortgages were sold, but it is not yet clear how the central bank proposes to take this forward. Our high commission will monitor developments.
Although there has been progress, we recognise the impact that property disputes have had on many families in Cyprus and the United Kingdom, and that many of the families risk losing their life savings. Those affected should continue to pursue their cases through the Cypriot and, if appropriate, UK courts, although we accept that this can be challenging and that good legal advice does not come cheap. In parallel, we remain committed to lobbying at high level to encourage the Cypriot Government to take effective action to resolve existing problems and to reform the property sector to prevent such problems from occurring in future.
Question put and agreed to.
Resolved,
That this House has considered the matter of British property owners in Cyprus.