Increase of rent in Cyprus within the framework of the Rent Control Law

The rental market of immovable property in the Republic of Cyprus is divided into two categories; The first falls under the Rent Control Law of 1983, and the second one, is considered to be within the “free market”.

Within the scope of the Rent Control Law, the term property is considered as houses or shops for rent, but does not include land which does not contain buildings. Furthermore, the term tenant is considered as any person residing in Cyprus or a foreign citizen who is married to a Cypriot citizen and who has a right of use of the property, including companies, but does not include foreign citizens.

For a property to be subject to the Rent Control Law, it must fulfill all of the following 3 conditions:
i) it must be situated in the “controlled areas” of the Republic of Cyprus.”
ii) it must have been constructed before December 31st of 1999
iii) the rental agreement of those properties must have expired, and the tenants continue to occupy the residence and duly pay the monthly rate corresponding to their rent.

Once the above mentioned conditions are fulfilled, the individuals occupying the property are considered to be tenants by default and are protected by the Rent Control Law of 1983.

This is the reason why their eviction is very hard to achieve, as the legislators’ main concern has been, up to the present day, to protect the weaker party of the agreement, which is the tenant. What is even more interesting, is the fact that for an increase in the rent, as the “tenant by default” is protected, there must be an official announcement by the Ministry of Justice and Public Order, which is communicated publicly every 2 years.

Due to the financial crisis, of the past 3 years, , the increase of the rental rate has been set to 0. In other words, until 2021, any increase of the rent, suggested by the landlord is void and considered to be illegal and the tenant may refuse to accept such increase. However, in case the rental rate of a particular property is significantly lower than the average market rates of similar properties, the landlord can make a request before the Rent Control Court of the district, where the property is situated, for the payment of 90% of the markets’ average rate, a decision which is in the discretion of the judge. This procedure requires the evaluation of the property’s rental value by an independent specialist and submit the final report before the Judge.

It is important to emphasize though, that the above exposed information concerns only the properties that are subject to the Rent Control Law of 1983. All other immovable properties are subject to a rental increase, according to the stipulations of each given rental agreement, or in case such stipulations are not present within the contract, the landlord may increase the rental rate at will, as long as it is reasonable.

What seems to be particularly interesting in the Cypriot legislation, is that in case of litigation regarding immovable property, two different jurisdictions are competent. If the property fulfills the above mentioned conditions, the case must be presented before the Rent Control Court of the district where the property in question is located, whereas, in any other case, the Civil Court of the relevant territory must take upon the case.

Please note that this article is for informational purposes only and does not constitute, in any case, legal advise. For a personal consultation, please contact Arsen Theofanidis LLC and one of our legal advisers will be glad to assist you.

N. Kalifatidou
Advocate – Legal Consultant
Arsen Theofanidis LLC