Cyprus banks demand clarification on building permit revocations

The Cyprus Banks Association has sent a formal letter to the five District Local Government Organisations (DLGOs) requesting information regarding the revocation of planning permits. Banks are concerned about credit risks associated with loans secured against buildings that may never be legalized due to planning irregularities. Recent inspections by the Nicosia DLGO between March and August 2025 revealed that only 15% of 13 checked applications were fully valid. Approximately 54% of these applications contained serious irregularities, including breaches of development coefficients and parking requirements. The Association expressed concern that the newly introduced fast-track licensing process could lead to higher rates of permit revocation. Banks are requesting clarification on the legal grounds for revocation and demanding to know if lenders will be notified when a permit is withdrawn. Lenders highlighted that failing to receive such notification leads to the continued, risky disbursement of loan installments. The crisis is reportedly most pronounced in Nicosia and Limassol due to a reliance on paper-based reviews rather than on-site inspections.