Τhe Supreme Court of Cyprus issued a very important judgement on the 23/12/2015 in relation to the validity of Powers of Attorney used, among others, in transactions relating to the purchase of immovable properties in Cyprus.
A Power of Attorney, in order to be valid, has to comply with specific legal requirements set out in the relevant Law. If these requirements are satisfied or appear – on the “face” of the Power of Attorney – to be satisfied then the transaction is legal and binding on all the parties concerned.
The importance of the above mentioned judgement lies in the opinion expressed by the Court that even if the requirements of the Law seem to be satisfied, a Court would be prepared to accept evidence that these requirements are not in reality satisfied. And if this is done, then the Power of Attorney is illegal and the transaction in which this was used is not legally binding.
In conclusion the said judgement of the Supreme Court – acting as an Appeal Court – is very important in view of the fact that in the large majority of cases involving loans and purchase agreements of immovable property in Cyprus, Powers of Attorney were used and in most cases these were not legally drafted.
These illegalities can now be proved in court with the appropriate evidence.