Following many discussions, the House of Representatives, recently passed with many amendments, a government bill regarding rents.
It is expected that tenants of residential as well as commercial properties are now facing financial problems caused by the pandemic, and this may continue in the future.
Part of these tenants have always been consistent with their rent payments but the lockdown due to the pandemic has now pushed them into liquidity difficulties.
Another group of tenants, taking advantage of the situation have stepped forward asking for huge rent reductions or even a suspension of payments without actually being hurt by the pandemic.
Rights and Obligations
The aim of the article is to inform the public of the legal status quo and the rights and obligations of landlords and tenants.
The first part of the amended legislation deals with tax breaks to the benefit of owners.
The State, bearing in mind that a general rent reduction would be both unfair as well as unconstitutional, decided to urge owners to reach an understanding with tenants facing financial difficulties and where the landlord can handle the cost.
If an owner decides to give a rent discount the State undertakes to offer a 50% tax credit on the reduction implemented.
In order to enjoy the tax break the rent discount has to be between 30%-50% of the monthly rent, and for a maximum of 3 months.
It is also vital that for the owner to reap this tax break the income tax payable must cover the credit enjoyed.
The second provision is focused on properties under the Rent Control law.
The House of Representatives passed in December 2019 an amendment of the law aiming for swifter eviction procedures in cases of late rent payments.
The burden of proof of rent payments now lies with the tenant, who is led into a court procedure and if he cannot be prove that the rent has been paid, a swift court procedure is initiated without the tenant’s presence.
The recent amendment revokes the right of the owner to initiate eviction procedures for the months of April-September 2020.
Simply put, if the tenant does not pay any or some rents during this period, the owner cannot demand an eviction.
What the owner can do is to seek a court decision for delaying rent payments.
It is certain that sensible owners will be able to work out a solution with well-meaning tenants who really need a financial gift.
It goes without saying that none of the two parties will benefit from a confrontation which will end up in court.
Written by: George Mouskides
Director FOX Smart Estate Agency
Chairman Cyprus Property Owners Association (ΚΣΙΑ)
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