In pursuit of an alternative to selling property during economic uncertainty, many homeowners are now turning to rental as a viable option whilst waiting for the housing market to stabilize. Louise Zambartis has some advice for all of us.
With horror stories rife about non-payment of rent, sitting tenants and neglected property maintenance it can be a difficult decision for a potential landlord as to whether the risks of potentially protracted tenancy disputes are worth the benefits of rental. However, I believe that an understanding of the law is a strong weapon and that if a landlord enters into his tenancy arrangement armed with basic knowledge of his rights he can avoid most, if not all, of the problems associated with rental and enjoy a sizable income from his property.
Here are just some of the facts of which you should be aware if you are thinking about renting.
Tenancies of furnished properties for periods of less than 30 days officially require the permission of the Cyprus Tourism Organization which licenses such activities. That said, the authorities do presently seem to be powerless or loath to enforce this provision as contravention appears wide spread.
Longer term tenancies are divided into two distinct categories:
The Rent Control law seeks to protect tenants from dominant landlords and, although the law does not unduly interfere with written agreements between the parties, it does place limitations which serve to shield the tenant in certain circumstances.
As a result of the advantages given to the tenant under the Rent Control Law a “statutory tenant” can in some cases, on expiration of the term of the first tenancy, remain in possession and be granted the right to a new tenancy by the Court. Advice ought to be taken prior to entering a tenancy agreement as to whether there is potential in your case for this to occur. On average it has been calculated that a successful eviction takes 360 days in Cyprus.
There are now three Rent Control Courts in Cyprus which have jurisdiction to decide all matters regarding re-possession of rental property and other incidental matters. Each Rent Control Court comprises a President (a member of the Judiciary) and two lay members (one from the landlord’s side and one from the tenant’s side).
A tenancy agreement must be made in writing and signed by both parties as well as by two independent witnesses.
As an absolute minimum the agreement should cover such matters as:
Attaching a full inventory to the tenancy agreement will prevent misunderstandings in the future. Most preferable is to include photographs in your inventory which will show the exact state of repair of furniture prior to rental.
Apart from ensuring you have a suitable tenancy agreement in place (which includes an inventory) you may wish to take additional steps to ensure that the rental runs smoothly. Your lawyer may advise some or all of the following:
A tenancy of more than 15 years can be registered with the Land Registry within 3 months of signing a valid agreement executed in accordance with the Contract Law. Registration will provide the tenant with certain benefits (for example the right to trade the lease).
Rent from letting your property will (according to your circumstances) need to be declared to the Cyprus Inland Revenue or to the Inland Revenue of your country of origin as an income to be taxed.
The decision to rent out your property can be a difficult one, made even more so against a background of complex legal rights and a system which traditionally serves to protect the tenant. The solution to protecting yourself is simple: carry out the proper checks before you enter into a tenancy agreement and ALWAYS have a tenancy agreement drawn up which is made in accordance with Cypriot Law and which fully protects your interests as a landlord. In this way you will be best placed to avoid the headaches (and reap the benefits) associated with being a landlord in Cyprus.