Eviction of Bad Tenants in Cyprus
The Republic of Cyprus has long faced challenges in dealing with bad tenants, particularly those who consistently fail to pay rent. In response to these issues, the government enacted Amendment 3(1)/2020 to the Cyprus Rent Control Act 1983 on January 31, 2020. This amendment provides landlords with improved mechanisms for recovering unpaid rent and evicting non-paying tenants using a fast-track method. In this article, we will comprehensively discuss the new eviction process, its implications for both landlords and tenants, and the impact on the property market in Cyprus.
The article will cover the following topics:
- The Rent Control Law and its amendments.
- The fast-track eviction process for non-paying tenants.
- The distinction between statutory and non-statutory tenants.
- Key case law developments in Cyprus, including P v. K (2022) and Fysentzides vs K & C Snooker & Pool Entertainment (2020).
- Properties erected after 1999 and the Civil Offences Law Cap.148.
- Implications for landlords and tenants in Cyprus.
The Cyprus Rent Control Law: An Overview
The Cyprus Rent Control Act 1983 was introduced to govern the relationship between landlords and tenants, particularly in the context of residential and commercial property rentals. The Act aims to balance the interests of landlords, who seek to protect their investments, and tenants, who require security and stability in their tenancies.
The Rent Control Act is primarily applicable to properties located within a “Controlled Area,” which includes most urban centers in Cyprus. Additionally, the Act covers properties that were erected on or before December 31, 1999. Tenants protected under the Act are referred to as “statutory tenants.” These are tenants who continue to be in possession of the premises after the expiration or determination of their tenancy.
The Challenges of the Previous Eviction Process
Before the amendment, the eviction process in Cyprus was notoriously slow and cumbersome, often taking between 3-5 years to complete. This protracted process was detrimental to landlords, who not only lost rental income but also faced significant legal fees and court costs. Moreover, the slow eviction process made it challenging for landlords to regain possession of their properties and subsequently rent them out to more reliable tenants.
Tenants, on the other hand, could take advantage of the lengthy process by remaining in the property without paying rent or by strategically withholding rent to negotiate more favourable terms. This situation created an imbalance in the landlord-tenant relationship, disproportionately favouring tenants.
Amendment 3(1)/2020: Fast-Track Eviction of Bad Tenants
Recognising the need for reform, the Cypriot government introduced Amendment 3(1)/2020 to the Rent Control Act 1983, which aimed to expedite the eviction process and provide landlords with more effective tools for recovering unpaid rent.
Under the amended Rent Control Law, landlords can now initiate a fast-track eviction process against non-paying tenants who meet the following conditions:
- The property is located within a controlled area and was erected on or before December 31, 1999.
- The tenant is a statutory tenant, meaning they continue to possess the property after the expiration or determination of their tenancy agreement.
If these conditions are met, the landlord must serve the tenant with a written notice requesting the tenant to settle all outstanding rent payments within 21 days. If the tenant fails to do so, the landlord can file an Eviction Application with the court.
The tenant then has 14 days from being served with the Eviction Application to either settle all rent arrears or file a defence in the form of a reply with the court registrar. The registrar will only accept the tenant’s reply if it is accompanied by proof of payment or deposit of the rent arrears in court, a receipt from the landlord, or a banking/financial institution receipt confirming the deposit of the rent arrears into the landlord’s account.
The court registrar will accept or reject the application, subject to final approval by a judge within three days of the submission of the tenant’s reply. The judge’s decision is not subject to appeal. If the eviction order is granted, the court will issue an order demanding eviction of the property and payment of the rent arrears. The eviction notice cannot be less than 90 days from the date of the order.
Key Features of the Amendment
- Written Notice: The landlord must first serve the tenant a written notice requesting the tenant to settle all outstanding rent payments. The tenant is obligated to pay rent arrears within 21 days of receiving the notice.
- Eviction Application: If the tenant fails to pay within the 21-day period, the landlord may initiate the eviction process by filing an Eviction Application with the Court.
- Tenant’s Right to Settle Rent Arrears: The tenant has the right to settle all rent arrears within 14 days from being served the Eviction Application. If the tenant pays, the eviction process will cease, unless the tenant has systematically failed to pay rent throughout the tenancy.
- Tenant’s Defence: The tenant may file a defence in the form of a reply within 14 days from being served the Eviction Application. The Court Registrar will accept the reply only if it is accompanied by proof of payment of rent arrears, such as a court deposit receipt, landlord’s receipt, or bank deposit receipt.
- Court Registrar’s Decision: The Court Registrar must accept or reject the application, subject to final approval by a judge within three days from the submission of the reply. The judge’s decision is not subject to appeal.
- Eviction Order: If the eviction order is granted, the court will issue an order demanding the eviction of the property and payment of rent arrears. However, the eviction notice cannot be less than 90 days.
Impact of the Amendment
The new fast-track eviction process has considerably shifted the power dynamics between landlords and tenants. Tenants are now required to prove payment of rent arrears, which reduces the likelihood of abusing the system. With this amendment, landlords can expect to evict a non-paying tenant within 5-7 months, significantly reducing the time, costs, and stress associated with the previous process.
Limitations and Exclusions
It is essential to note that the amendments enacted on January 31, 2020, do not apply to:
- Eviction Applications filed in court before January 31, 2020.
- Rent due before January 31, 2020, provided that the due rent is settled within 12 months from that date.
Statutory Tenants vs. Non-Statutory Tenants
As previously mentioned, the amended Rent Control Law applies only to statutory tenants. Statutory tenants are those who continue to possess a property after the expiration or determination of their tenancy agreement, provided the property is within a controlled area and was erected on or before December 31, 1999. Statutory tenants enjoy various protections under the Rent Control Law, such as the right to continue occupying the premises even after the termination of the tenancy agreement, provided they continue to pay rent and meet other obligations.
Non-statutory tenants, on the other hand, do not enjoy the same protections under the Rent Control Law. For properties erected after December 31, 1999, or those located outside controlled areas, the eviction process is governed by the general provisions of the Civil Offences Law Cap.148. This law allows landlords to evict non-statutory tenants more easily, as they do not enjoy the same level of protection as statutory tenants.
Properties Erected After 1999 and the Civil Offences Law Cap.148
For properties erected after December 31, 1999, which do not fall under the scope of the Rent Control Act, the eviction process is governed by the general provisions of the Civil Offences Law Cap.148. Although the recent amendments to the Rent Control Act do not directly apply to these properties, the principles established by the Amendment 3(1)/2020 have influenced the interpretation and application of the Civil Offences Law Cap.148 in eviction cases.
Under the Civil Offences Law Cap.148, landlords can seek eviction for various reasons, including non-payment of rent, breach of the lease agreement, or expiration of the lease term. The eviction process typically involves the landlord serving the tenant with a written notice to vacate the premises, followed by filing a lawsuit against the tenant if they fail to comply with the notice.
Eviction Process Under the Civil Offences Law Cap.148
The Civil Offences Law Cap.148 governs the eviction process for properties erected after December 31, 1999, or those located outside controlled areas, as well as situations where tenants do not qualify as statutory tenants under the Rent Control Law. The eviction process under the Civil Offences Law Cap.148 is generally more straightforward and quicker than the process under the Rent Control Law. Here is an overview of the eviction process under the Civil Offences Law Cap.148:
- Termination of Tenancy Agreement: Before initiating the eviction process, the landlord must first terminate the tenancy agreement in accordance with the terms set out in the agreement. This typically involves serving the tenant with a written notice of termination, specifying the grounds for termination and the date by which the tenant must vacate the property.
- Demand for Possession: If the tenant fails to vacate the property by the specified date in the termination notice, the landlord can serve the tenant with a demand for possession. This demand should state the landlord’s intention to pursue legal action if the tenant does not vacate the property within a reasonable time, usually 7 to 14 days.
- Filing a Lawsuit: If the tenant continues to occupy the property after the demand for possession has been served, the landlord can initiate legal proceedings by filing a lawsuit against the tenant in the District Court. The lawsuit should be based on grounds such as breach of contract or trespass and should seek remedies such as eviction, payment of rent arrears, and compensation for any damages caused by the tenant’s continued occupation of the property.
- Service of Summons: Upon filing the lawsuit, the landlord must serve the tenant with a summons, notifying them of the legal proceedings and requiring them to appear in court on a specified date. The tenant will generally have 10 days from the date of service to file their defence with the court.
- Court Proceedings: If the tenant fails to file a defence or does not appear in court, the court may issue a default judgment in favour of the landlord. If the tenant does file a defence, the court will proceed with a hearing to determine the merits of the case. During the hearing, both parties will have the opportunity to present their arguments and evidence.
- Judgment and Execution: If the court rules in favour of the landlord, it will issue a judgment ordering the tenant to vacate the property and pay any outstanding rent, damages, and legal costs. The landlord can then apply to the court for a writ of execution to enforce the judgment. This writ authorises the court’s bailiffs to forcibly evict the tenant and seize their possessions if necessary, to cover the outstanding rent, damages, and costs awarded by the court.
Key Case Law Developments in Cyprus
A. P v. K (2022)
The recent case of P v. K (2022) is a landmark decision in Cyprus that has further clarified the eviction process for bad tenants under the amended Rent Control Law. In this case, the court affirmed that the amended Rent Control Law applied to the dispute between the parties, resulting in a faster eviction process compared to the previous legal framework.
The court also emphasised the importance of landlords serving proper notice to tenants, as well as the need for tenants to provide proof of payment or deposit of rent arrears when filing a defence against an eviction application. This case has helped solidify the practical application of the amended Rent Control Law and serves as a precedent for future cases involving eviction disputes between landlords and tenants in Cyprus.
B. Fysentzides vs K & C Snooker & Pool Entertainment (2020)
In Fysentzides vs K & C Snooker & Pool Entertainment (2020), the Supreme Court of Cyprus clarified the jurisdiction of the Rental Control Court and the requirements for a tenant to be considered a statutory tenant under the Rent Control Law. The court held that, in addition to the five conditions mentioned earlier, a tenant becomes a statutory tenant only if the premises were rented or available for rent before December 31, 1999. This ruling has significant implications for tenants seeking protection under the Rent Control Law and landlords pursuing eviction against non-paying tenants.
The Amendment 3(1)/2020 to the Cyprus Rent Control Act 1983 has introduced much-needed reforms to the eviction process for properties erected on or before December 31, 1999. By streamlining the eviction process and shifting the burden of proof to tenants, the amendment has balanced the rights and interests of both parties, fostering a healthier rental market in Cyprus.
As the fast-track eviction process under the Rent Control Act becomes more widely adopted and Cap.148 continues to govern eviction proceedings for properties not covered by the Act, landlords and tenants are encouraged to stay informed about evolving case law and relevant legislation. In doing so, they can better protect their rights and interests, ensuring a fair and just rental market in the Republic of Cyprus.