WALKING around our cities and looking at their town center, but also their neighbourhoods, you feel that a lot needs to be done to improve their image and consequently the quality of life of their inhabitants.
The main area to tackle in order to achieve this goal is the condition of the buildings and the areas where the citizens of the cities live in general.
Focusing on the buildings, let us emphasise that in order to improve their appearance, a substantial upgrade is required, firstly in appearance, secondly in their safety and thirdly in the upgrading of their energy efficiency.
And all this concerns not only the very old buildings, but also buildings that have been built in the last twenty years.
The question is, why would homeowners want to perform these upgrades to their buildings and invest significant amounts?
The answer is simple. The main motivation is to look forward to some form of financial gain. Unfortunately, today they cannot expect any benefits.
What are the conditions that would lead to this benefit?
Rental: For the buildings built until 31/12/1999, which as it is known fall under the Rent Control law, the state determines the maximum rent increase.
In particular, in the last ten years, ending in April 2023, the state has decided, in its wisdom, zero increases in rents.
The result of this decision is that apartments, shops, offices and houses that fall under the Rent Control law have significantly lower rents than the new ones, built after 01/01/2020.
This provision causes a significant increase in the rents of the other properties, since the Rent Control properties are not in the market.
And do you know what the tragedy of the situation is? Even if an owner wants to upgrade his property he cannot do so, since there is no way to evict the tenants to perform the necessary upgrades.
In short, this law creates a lot of distortions that also affect the renovation of buildings and must be abolished immediately.
Commonly-owned buildings: In terms of these buildings, i.e. buildings with more than five units, there is a prevailing confusion, especially when the building begs for major repairs.
Statistically, one in ten residents does not pay common expenses, dragging others with them, the result being that the funds of the buildings are in the red and the management committees are unable to carry out the necessary works to improve the condition of the specific buildings.
Root of the problem
A major reason for the existence of such problems is the lack of a culture of collective ownership and living. Most importantly, the delay in the administration of justice, if for example the management committee decides to go to court for the collection of uncollected common expenses.
The amendment and improvement of the existing legislation, which has been circulating for the last ten years between different departments and state services, without a decision being taken, should be promoted immediately.
Taxes and fees: Another important reason for the decline of our cities is taxes. Landlords are tired of watching new taxes/fees rise or the increase of existing ones.
Specifically, they pay municipal property tax, sewerage, rent tax, defence levy, income tax, GeSy, transfer fees and of course VAT.
As if it is not enough that taxation is unbearable, taxes are too many and complicated. As a result, many landlords fail to pay them on time and pay a fine.
Immediate reduction of many taxes is required. There should be a single tax when one buys real estate, one annual when one owns real estate and one when one sells real estate.
The most tragic thing for the owners is that there is no protection from the state, when tenants leave the properties leaving behind pending things such as water, electricity and utility bills as well as a lot of damages, with all these costs borne by the landlord.
With all these problems who would want to be a property owner when all he will be doing is to be paying, instead of collecting, even a small amount of rent from his property?
Licensing and Title Deeds: With all these happening the state should give incentives to the citizens to proceed with the upgrading of their real estate. The licensing process, especially for old buildings and listed buildings is time consuming and much like venturing into a labyrinth.
The same applies for the issuing of title deeds. There are cases where one of the owners on an apartment building may have committed an offense, but the price has to be paid by everyone.
With a few simple but substantial actions, the state could improve the image of our cities and the lives of their inhabitants, without cost, simply by promoting the appropriate measures, many of which we have mentioned above.
If such measures are taken, the situation will certainly improve, there will be more properties for rent and most importantly, as a direct consequence, there will be a reduction in rents prices.
By George Mouskides
Director FOX Smart Estate Agency
Chairman Cyprus Property Owners Association (ΚΣΙΑ)
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