Contractual and Statutory Tenancy

Contractual and statutory tenancy

George Coucounis explains how the terms contractual or statutory tenancy concern premises built mainly in towns and municipalities in Cyprus before January 1, 2000.

People are often interested in finding out their legal status and rights in their capacity as landlords or tenants of Cyprus properties such as shops, houses, apartments, offices or even land. When they do so, they come across with legalistic words like “tenancy”, “contractual or statutory tenancy”, “valid or void tenancy agreement”, “termination of the first tenancy” and many others which are difficult to understand even sometimes for lawyers.

It is essential to ascertain the type of tenancy which exists in a given case between the landlord and the tenant because in case of any legal dispute, the parties must know the Court which has jurisdiction to entertain their claim.

Moreover, these days there are many people who rent out their properties fully furnished on a short term basis and there are others who prefer to orally rent their properties without signing a tenancy agreement. It is also interesting to know whether there is any distinction between the citizens of Cyprus and those of a country member of the European Union or of other countries.

According to article 77 (1) of the Contract Law, Cap. 149, contracts relating to leases of immovable property for any term exceeding one year are not valid and enforceable, unless (a) they are expressed in writing and signed at the end by the parties concerned and (b) in the presence of at least two witnesses who are competent to contract and subscribe their names as witnesses. An oral lease agreement is valid if the tenancy is for a period less than one year, otherwise it is void.

Also, a written lease agreement for a period exceeding one year is void if not signed by at least two witnesses. In these cases, though the tenancy is void, it continues to exist as long as the tenant remains in possession of the property.

The usual question raised is about the consequences of a void tenancy and what the parties’ rights are. When a lease agreement does not comply with the provisions of article 77(1) of the law, it is void and becomes a periodical tenancy according to how the rent is payable, i.e. from month to month, year to year or otherwise. It is considered expired when the period of the tenancy stated in the void agreement is over or if a proper legal notice is given.

For a tenant of an immovable property to become a statutory tenant, either the first tenancy must expire or the tenancy must be properly terminated and the tenant to remain in possession of the property. Furthermore, for the tenancy to become statutory the property must be situated within the areas controlled by the Rent Control Law and the premises must have been completed by the 31/12/1999. All other tenancies, including leases of land, remain contractual and are subject to the agreement made by the parties. Such tenancies are beyond the ambit of the Rent Control Law and the tenant remains in possession during the lease period unless the tenancy is renewed or extended.

Likewise, tenancies of furnished houses or apartments for a period less than 6 months remain contractual independently from when the property was completed and where it is situated. The competent Court to entertain any claim under such leases is the District Court of the district where the property is situated.

The term “statutory tenant” means the tenant who is protected by the statue and he cannot be evicted from the premises except in the cases provided by the Rent Control Law, 23/1983 as it has been amended. In the case of a statutory tenant, the terms of the lease agreement remain valid except the period of the tenancy and the amount of the rent payable which are regulated by the aforesaid law.

A statutory tenant can be evicted mainly in the following cases, i.e. (a) when the rent is in arrear for more than 21 days after a written notice demanding payment is given to the tenant and he fails to pay; further, the relevant application is served to the tenant and he fails to pay any amount due within 14 days from the service or the tenant constantly omits to pay the rent, (b) when the owner reasonably requires the property for him, his spouse, children or dependent parents to reside there in or use it, or (c) in order to demolish it and construct a new building, or (d) to make substantial changes or alterations which will lead to the development of the property, or (e) to execute works in a preserved building, or (f) if the tenant despite his expressed obligation not to sublease the property, he does so and the Court considers reasonable to issue the eviction order.

There are certain other cases described in the law which give the right to the owner to claim the eviction of the statutory tenant. The competent Court here is the special Court established in every district i.e. the Rent Control Court.

Since Cyprus became a member of the European Union, there is no distinction between Cypriots and citizens of other member states and the word “tenant” is read to include citizens of the member states of the European Union.