There are two primary types of rental relationships that exist in Cyprus: the "statutory" tenancy and the "contractual" tenancy.
Determining the nature of a tenancy is pivotal in ascertaining the competent Court with the authority to adjudicate on the issue.
Statutory tenancy comes into effect when an initial tenancy ends or is terminated and yet the tenant still retains possession of the property. This is applicable to both residential and commercial properties located within the areas covered by the Rent Control Law (1983) and its subsequent modifications and provided that such properties have been completed no later than December 31st, 1999. The Rent Control Law covers the EU and Cyprus citizens who reside in Cyprus.
The Rent Control Law of 1983 protects "statutory tenants," preventing eviction except under predetermined circumstances. To reclaim their property from such a tenant, a landlord must undertake legal actions.
The primary conditions permitting eviction of a statutory tenant include:
- Tenant's constant failure to pay rent; and whereas the rent is outstanding for a period exceeding 21 days after the initial notice, and the tenant does not address the overdue amount within 14 days of receiving the formal claim.
- The property owner can prove to the court a genuine need for the property for personal use, or for the use of immediate family or dependent parents.
- In order to demolish the existing property and build something new or make extensive modifications that will increase the value of the property.
Contractual tenancies on the other hand, as well as all other tenancies that are not classified as "statutory tenancies" are not governed by the Rent Control law but rather by the mutual agreement between involved parties. Unless there is a lease extension or renewal, the tenant typically only has possession of the property during the term of the agreement. Additionally, regardless of the property's completion date or location, any tenancy lasting no longer than six months is recognized as a contractual tenancy. Legal disputes concerning contractual tenancies are adjudicated by the District Court.
Landlord's rights and obligations
- At the beginning of the tenancy, landlords must ensure that tenants can take possession at the tenancy's commencement.
- Landlords are required to respect the tenant's right to use the property. There are exceptions, as such in situations where prompt landlord intervention is required. However, situations that were predictable or brought on by the landlord's irresponsibility are not considered as emergencies.
- Residential or commercial landlords must provide properties that are secure and appropriate no matter the property's intended use. Any hazardous defects must be rectified within a reasonable timeframe.
Tenant's rights and obligations
- Tenants should avoid causing intentional or negligent damage to the property beyond normal wear and tear. They mustn't commit acts leading to damage, neglect, or unauthorized alterations. Typically, a security deposit ensures the property is returned in its initial condition. If damages or unauthorized changes occur, landlords can claim monetary compensation.
- Rent must be promptly paid by tenants. Any delays can result in eviction and claims for unpaid amounts.
- In commercial leases, there might be a stipulation that tenants must actively use the rented space for its intended business purpose. Leaving the property unused could invalidate the lease, especially if rent is contingent on business performance or goodwill.
- Tenants must ensure they're using the property for legal activities. Any unlawful activities or nuisances can lead to eviction and potential claims for damages.
A Landlord's Right to a Rent Increase
Rent increase currently poses a significant challenge for tenants in Cyprus.
If a property falls under the regulations of the Rent Control Law of 1983, then the matter of rent increase is imposed by this Law, irrespective of stipulations within any lease agreement, if it is valid, expired, or nullified. Disagreements concerning rent are adjudicated by the Rent Control Court. The Rent Control Court has jurisdiction to determine matters regarding recovery of possession of controlled rented property and the determination of fair rent, as well as any other incidental matter.
According to a new regulation from the Ministry of Justice, landlords of properties covered by the Rent Control Law of 1983 would only be permitted to increase rent for their tenants by a maximum of 6% between 2023 and 2025.
If a landlord seeks a rent increase exceeding 6%, tenants have the right to decline, and the landlord can then approach the Rent Control Court to determine a fair rent. This also applies if the tenant believes the rent surpasses the market rate. The Court, considering factors like location, size, and age of the building, will then decide on an appropriate rent.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
