Cyprus: Unfair Terms of Consumer Contracts and Unfair Commercial Practices of Businesses to Consumers examined by the Consumer Protection Service Authority
The Consumer Protection Service (CCPS) issue administrative decisions according to the legislation which relate to (i) unfair commercial practices;(ii) protecting consumers against unfair terms in contracts;(iii) product safety: general rules and (iv) products’ basic requirements.
Recently the said Authority has issued an administrative fine in the amount of €200.000 against a land development company for breaching the Unfair Commercial Practices of Businesses to Consumers Law. Particularly the said company had built homes without first obtaining the necessary licenses from authorities. Consequently, the CCPS concluded that contracts for the sale of property without disclosing the actual situation of the properties to their purchasers and the consequences that arise in relation to transferring absolute ownership and title deeds the buyers, are in breach of the Law. In that case the consumer would have not entered into the agreement had he or she known the real situation as it stands. In the said decision it was further stated that undergoing construction without a building permit is forbidden, and therefore a company who signed a sale and contract agreement prior to obtaining such a permission, would render the contract illegal during the time of entering into same (Levy v. Yates (1838)).
Another decision was also issued against another land development company which had included abusive contract terms in the contract for sale and purchase of the property holding that the following clauses were in fact abusive:
(i) Clause that required consumers to fulfil their payments before the company had transferred the title deeds;
(ii) Clause that imposed a high interest on late payments;
(iii) Clause that burdened consumers with taxes and expenses which should be paid after the property is transferred;
(iv) Clause that required consumers to sign a management agreement for the common areas which was not attached to the sales contract, thereby committing them to conditions they could not have known.
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