Rent Control Challenges in Cyprus
The Cyprus Real Estate Agents Registration Council has voiced concerns about the longstanding Rent Control Law of 1983, which they believe is hampering the growth of the local property market. The law, originally intended to protect tenants post-Turkish invasion, is now seen as an impediment to development and investment.
Marinos Kineyirou, president of the council, emphasized that the law’s relevance has diminished since its inception in 1974, and it now serves as a burden to the real estate sector. He argues for the abolition of what he considers an outdated measure.
Not all properties are subject to rent control; only those in areas designated by a Cabinet decree fall under its jurisdiction. Kineyirou pointed out that rent control creates a dichotomy between tenants and landlords, depending on whether their property is in a controlled area. Tenants who are up to date with their rent payments become statutory tenants, making it nearly impossible for landlords to reclaim their property.
The criteria for statutory tenancy include the property’s location within a rent-controlled area, its construction date before December 31, 1999, and it being leased or offered for lease on or before that same date. Kineyirou highlighted the challenges this poses for property owners who may wish to pass on their property, sell it, or change its use.
Furthermore, he noted that rental fees in these areas cannot be renegotiated without a Cabinet decree. This has led to rental prices being frozen until May 2023 when a decree allowed for a 6 percent increase for the 2023-2025 period.
Kineyirou also pointed out that these regulations make rent-controlled properties difficult to sell, as investors shy away from legislation that could affect their returns. The fear of rent control has broader market implications, with investors avoiding properties built before December 31, 1999.
The council president calls for state intervention to align the institution of rent control with the country’s development model, suggesting that current policies are not conducive to market growth.
