George Coucounis describes the things owners of property in Cyprus should consider in order to protect their property and rental income.
A significant number of people who have bought immovable properties in Cyprus are interested in letting them in order to raise income which will be useful to cover their loan installments or to gain a return from their investment.
These properties, either apartments or houses, are usually fully furnished and are placed in the market through estate agents for renting purposes. However, the main concern of the agent appointed is sometimes only to find a tenant without caring to prepare a proper tenancy agreement or an inventory of the furniture or to search whether the tenant is a reliable person and able to pay the rent.
There is also the issue of the payment of the rent, where it is made, to the agent or to the owner's bank account and whether it is paid punctually or not. Sometimes, no proper information is received about the tenant who is usually a foreigner and may leave the property at any time without the owner knowing his whereabouts, leaving rents and bills unpaid or even having damaged the furniture and the premises. In these cases, the question raised is what the available remedy is and how the owner can claim the rents and damages for any loss or damage he has suffered.
The tenant may also leave the place earlier than the time stated in the tenancy agreement without informing the owner about it or he may sublet it to others.
It seems that an owner of an immovable property must act carefully in renting out his property by choosing the tenant, signing a proper tenancy agreement and ensuring the payment of the rent. Unless the owner pays proper attention as he does in his everyday business, he will be wrong in leaving the matter in the hands of the estate agent to deal with.
An agreement must be made with the agent regarding his commission and the scope of his services. Before the property is let, the tenancy agreement must be read by the owner to ensure that he is aware of the actual agreement he is making with the tenant, the details of the tenant, his passport number and home address. The tenancy may be with or without furniture, on a monthly or annual basis and the tenant's obligations must be stated in the agreement.
The following clauses are expected to be included in a tenancy agreement:
A prudent owner will ask the tenant to provide a guarantor and to inform the local authority and the management committee, if any, that his property is used by the tenant and give details of his to them. Moreover, the water and electricity must be transferred in the tenant's name and when he leaves the premises, to pay any outstanding bills and have his name removed from the metres.
It is useful to note that when the tenancy created is for a period exceeding one year, the tenancy must be in writing and the agreement must be signed by two witnesses at the same time with the contracting parties.
Tenancies of furnished properties for a short period not exceeding thirty days on a repeated basis are prohibited, unless the owner obtains a relevant license from the Cyprus Tourism Organization.
The owner who always shows interest in his property and ensures that the tenant meets his obligations and undertakings under the tenancy has little to lose compared to others.
Wherever necessary to take legal steps against a tenant, do so as early as possible.
George Coucounis is an experienced lawyer practicing in Larnaca, Cyprus.
Educated at University College (London) and Thessaloniki University (Greece), George is fluent in English and has been practicing law in Cyprus since 1982.