Most European countries had adopted in the past, various measures in order to protect tenants from the landlord’s unreasonable demands for rental increases and eviction for repossession. These Rent Control laws have been abolished in most countries, but, Cyprus still adopts these rather archaic requirements.

Basically, what the Cyprus Rent Control laws state, is that buildings which were completed before 31.12.1999 fall within the Rent Control. The law applies basically in all Municipalities with most of the rural areas been excluded. So in order for the law to apply, the property must fall within the Rent Controlled areas.

Basically the law states that a sitting tenant may be evicted from a rent controlled property only subject to certain conditions (including non payment of rent etc). Rental increases may not increase more than 14% every 2 years (as a maxiimum) whereas for shops this is reduced to 8% every 2 years. In addition each party (tenant/landlord) may apply to the court if he feels that he is overpaying/under paying and the measure of judgement is the average rentals payable at the time of application in the immediate area. So there are cases that because the local rents are low (e.g. historic), the tenant can apply to have the rent reduced and vice-versa i.e. if the landlord feels that he is not getting enough, he can ask for an increase in the rent based on the local average rents (but to the maximum of 90% of the average). In case that an eviction order is issued the court may order the payment of compensation to the tenant amounting 18 times the monthly rent payable. However the monthly rent has been recently decided by a district court as being not the rental paid but the current rent. This is a very recent decision which has been appealed to and we are awaiting the results. Bear in mind that only E.U. members and Cos are protected by this law and as such 3rd countries Cos/persons are not.

The rent control provisos come into effect once the contract of lease ends and in the meantime each party must abide by the contract. Once the contract period ends the tenant might choose not to vacate the premises, ask for lowering of rent etc since he will become a controlled tenant.

Deciding the legal route, it is a long distance procedure which might take 1-2 years and legal cost of around €2.000-€3.000. What happens in most cases is that the landlord offers a higher compensation more than the 18 months rent, in order to save time and trouble. So the tenants in such occasions (i.e. property must be in the rent controlled areas, the building must have been completed before 12/2009 etc) one should bear in mind when he is letting/renting (the law does not apply for vacant land and hotels).

If you are considering a property to let and you are concerned about the tenant staying more than what period you wish, you may have a contract with say €500 p.m. for the period that the tenant/yourself agree (say 2 years), but in your contract you state that the lease is for 4 years. For the first 2 years the rent of €500 p.m. and for the second 2 years the rent is agreed to be increased to €1.000 p.m. (unless the tenant gives notice of termination at the end of the second year). So if the tenant wishes to stay, he will have to pay double the rent (or more it depends on the agreement or he can vacate the premises at his cost). The situation regarding holiday/short lets property is not clear and so far we have not had any problems on this count, but care is required since it might happen i.e. letting your villa for 2 months and then find out that you may not be able to get the tenant out.

A well known solicitor in Cyprus has told us that the rent control laws create such an animosity between the parties that it equals the ferocity of divorcers. It is not unknown that a family buys an apartment for future use by the children and lets it out until the apartment is needed, only, when the time comes to find out that this is not possible.

We believe that the Rent Control laws should apply for commercial property (shops etc) since a long standing tenant has built up his goodwill and “suddenly” the landlord in a blackmail approach is asking him say an unreasonable increase. In this case, we believe, and provided the tenant has runned his business in hat shop for more than 5 years, he must be entitled for protection. But in the case of residential accommodation there is so much abundance of units to let and when the location is not so directly related to the tenant (except for schools etc) the tenants must not be protected.

It is also notable that property which is let subject to the rent control laws and are let with somewhat low rentals (or not) have a much lower value from their free from the rent control laws (counterparts). So when buying/renting a property bear the Rent Control provisions in mind and make your own decisions.

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