No In Rent Reduction Through Legislative Regulation – Problematic Tenants

  Article By : Marinos Kineyirou|  Published at : Politis Newspaper| 16-06-2013

Marinos Kineyirou: President of the Cyprus Association of Estate Agent Entrepreneurs -President of the Real Estate Agent Entrepreneurs Association of Larnaca/ Famagusta and Property Auctioneer

Marinos Kineyirou Manager of Marinos Estate Agencies LTD

Marinos Kineyirou Manager of Marinos Kineyirou Estate Agencies LTD


 No In Rent Reduction Through Legislative Regulation – Problematic Tenants


The Cyprus Association of Estate Agents Entrepreneurs expresses its opposition to the bill for rent reduction through a legislative regulation. The Association stresses that it is not the appropriate time to proceed by law to reduce rents and such a move would be quite dangerous both for the Cypriot economy and the real estate market.

The text of the law proposal tabled by AKEL provides rent reduction for a year in residential premises and commercial premises – offices by 20 % starting from June 7, 2013. Specifically, the 20 % applies to the first 600 euro in residential rentals and 2000 euros in commercial real estates, while there will be no reduction beyond that amount. The decrease in residential rents will cover only the contracts which were concluded before 2013 and will also apply to those tenants who have done their obligations to the owner in the past two months while for the shops, even those that are in rent controls, the reduction is estimated to reach the amount of € 400 maximum.

The Cyprus Association of Estate Agents Entrepreneurs expresses its strong opposition to the Proposal Law, stressing that rents’ prices are regulated by the purchase depending on the supply and demand and any intervention will mess up its operation. Due to the economic crisis there are already several properties for rent with low prices. Many owners reduced rents for many months in order to avoid losing the existing tenants and therefore not to consider this regulation necessary. In individual cases, especially in shops and business premises, the prices have not decreased. The Association proposes the creation of a special committee composed of qualified appraisers of the Land Registry that will directly address these isolated incidents.

The Cyprus Association of Estate Agents Entrepreneurs stresses that not only the financial condition of tenants should be considered but the owners too. Unfortunately, the problem which homeowners are increasingly facing is the delay of rent payment, either by actual difficulty of the tenant and sometimes by systematic inconsistency to his obligations. In the first case there is always understanding and patience, in the second it depends on the way and time each interested owner would react to any rent that would lose.

Renting an immovable property in Cyprus is governed by the law (Law 23/83), which reproduces to a great extend the laws in force in the United Kingdom. The Rent Control Court oversees the implementation of the law and is composed of a judge and of two lay members. The philosophy of the law is to protect the owner and the tenant as well as to regulate the relationship between them. A tenant can be either a natural or legal person. An owner can be a natural or legal person entitled to possess the rented property. A rent is any amount paid for the property, and the use of furniture if the rented property is furnished. Renting like many other legal relations is essentially a contract between the owner and the tenant and generally the Legislation does not intervene in what has been agreed by the parties, but it raises some basic restrictions aiming to protect the tenant and the owner. Measures to protect the tenant are the increase of the rent which can only be determined by the court after 2 years from the date of the previous increase.

PROPERTY REPOSSESSION BY AN OWNER

An owner can repossess his property when

  1. The tenant delays to pay the rent – requires 21 days of notices.
  2. The owner provides evidence to the court that he requires the property for ownership.
  3. The tenant causes nuisance or damage, or sublease in violation to the agreement or receiving a disproportionate gain from selling air (goodwill).

The suspension of a decision issued by the court so that the owner recovers possession may last 1 year. Within this period the tenant may be complied so the owner – depending on the case- based on the decision loses the right to recover property possession.

Cyprus is unique in that according to the law, rent of any duration is not valid unless signed by the parties in the presence of two witnesses.

The Cyprus Association of Estate Agent Entrepreneurs with the excellent collaboration among its members and its experience through the years, know to a certain degree the problematic tenants and can easily protect you. In case of non-payment of rent, the real estate agent can intervene and help resolve the problem. The major concern of the association is that while there is legislation, in practice is not applied and it is both time consuming and expensive for an owner. Interested investors hesitate to buy properties to rent them as well. The negative disincentives of the legislation for problematic tenants perplex even more the investors and as a result the decision of buying a property becomes even more difficult with many consequences in the market that is weak due to the financial crisis. A proposal of the association is to change the existing legislation and problematic tenants should be evicted from the property in three to four months to protect property owners from the state.

This phenomenon extends throughout Cyprus and the legislation becomes a pure exploitation by problematic tenants. The relevant departments of the State in direct cooperation between them should give a solution to this serious phenomenon before we reach the point of having problematic tenants parade and be confronted with the worst from the desperate owners. The Association seeks to attentively study the proposal law by AKEL, which has been already criticized as unconstitutional, and adds that the tenant has now great variety of choices both in Cyprus apartments and commercial estates due to oversupply. Concluding, the Cyprus Association of Estate Agent Entrepreneurs emphasizes that the market today works for the benefit of the tenant.

Use our comprehensive online Cyprus property finder service to find properties to buy, to rent or to sell. Also, we provide property management services and the latest Cyprus real estate news in the news section of the website. Marinos Kineyirou real estate agents, specialize in the Cyprus property market with exclusive properties in the cities of Limassol, Nicosia, Pafos, Larnaca, Famagusta, Protaras and Ayia Napa.

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One Comment

  1. janice eastman says:

    Has this rent reduction law actually been passed? I was told by someone that it still had to be signed by the President and was not law until that point.

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