articles | 27 February 2020 | EY Cyprus

The process of eviction and recovery of possession of real estate in Cyprus

The process of eviction and recovery of possession of property are topics which have frequently been under discussion in Cypriot courts, tribunals and the Cyprus Parliament. The legal framework of evictions and recovery of possession of property has for years been favouring the tenant - with procedures in court taking no less than 9 months (in cases of summary judgement) and lasting up to 5 years for a full adjudication.

As a result, it has become a rather great “challenge” for owners to recover possession of their property and an even greater task for banks or credit acquiring companies that may have acquired ownership of properties (by virtue of a title deed) following debt-for-asset swaps or foreclosures. However, and despite the conveyance of the immovable property in their name, banks or credit acquiring companies may at times find it difficult to obtain vacant possession and occupation of their legally owned property and have to follow cumbersome court procedures. Such delay hinders the packaging of such real estate in portfolios for sale to potential investors and also affects the price of such properties.

The legal proceedings followed in Cyprus for eviction and the recovery of possession of property are heard either at the Rent Control Tribunal or the competent District Court. Such jurisdiction is determined by (i) the particulars of each case; (ii) the characteristics of the immovable property; and (iii) the basis, "contractual" or "statutory", on which the occupant occupies such property.

The eviction of an occupant can take place in cases where (i) he is a "trespasser" under the Civil Offences Law Cap.148 (the “Civil Offences Law”) or (ii) a “statutory tenant” and falling under the specific exceptions provided in Article 11(1) of the Rent Control Law 1983 (No.23(I)/1983) as amended (the “Rent Control Law”).

A. Trespassers

Any person “who has no lawful right to occupy the immovable property” and continues nonetheless to occupy it is by definition of the Civil Offences Law considered to be a “trespasser”. Before commencing legal action against an occupant, it is vital to define whether the occupant has a lawful right to occupy the property or not, as different proceedings and remedies are available.

In contractual tenancies and where a rental agreement has been lawfully terminated or expired, the occupant is obliged to vacate. If the property in question does not fall under the Rent Control Law and the occupant continues to withhold the property, refusing to give free and vacant possession as requested by the owner, he is then deemed to be a “trespasser”.

Legal proceedings
For the above described scenarios, the legal owner has the right to file an action to the competent District Court claiming recovery of possession and damages for loss of use of property for the time that the trespasser occupies the property. There are two alternative and interim procedures that can be followed on the back of such legal action.
(i) Summary Judgement
A legal owner can file for a summary judgement on the back of the legal action brought in the District Court requesting for the issuance of an eviction order when (a) the claim is precise; and (b) it can be supported in Court that the occupant has no real prospect of successfully defending the claim or the issue. The burden of proof is on the shoulders of the occupant to prove that he is the lawful occupier of the property. Any general and vague allegations by the occupant will not suffice for the Summary Judgement Application to be rejected.

The application for Summary Judgment is time efficient as it may be completed between 6 – 9 months, whereas a full adjudication of the action can take over 3 years to completed.

(ii) Prohibitory / Mandatory Injunction
A more drastic and prompter procedure (if granted ex parte / unilaterally) is the procedure of issuance of an (prohibitory or mandatory) injunction, pursuant to Articles 5 and 6 of the Civil Procedure Law Cap. 6 and Article 32 of the Law on Courts N. 14/1960.

However, such procedure is not recommended for eviction cases since the prerequisites for the issuance of injunction are not easily satisfied. It is essentially required, inter alia, that the plaintiff proves a possibility of damage or loss or adverse influence of his interests to such an extent that he cannot be indemnified in monetary terms or that irreparable damage is caused and thus justice cannot be attributed if the injunction is not granted.

B. Statutory Tenant

Identifying a “statutory tenant” depends not only on the characteristics of the occupant but also on the characteristics and classification of the property which he occupies. In cases where the property in question falls under the criteria of the Rent Control Law, then the recovery of possession of the property is only possible if one of the exceptions prescribed in Art. 11 (1) of the Law is present.

Specifically, an occupier will be considered as a “statutory tenant” if he occupies property which:

(i) is located within the “controlled areas” (as these areas are determined periodically by the Council of Ministers); and (ii) was built before 31st December 1999 – the date on which the Rent Control (Amendment) Law 20(I)/01 came into force; and (iii) there is evidence of renting, ownership or other occupation of the property by which the relationship of owner and tenant is established, except for the cases which are excluded from the definition of “renting” in accordance with the Law (as this is elaborated further below).

If the above requirements with regards to the property are fulfilled then recovery of possession of the rented property can only be achieved if one of the exceptions laid down in Article 11 of the Rent Control Law is established. In any other cases other than those prescribed in Article 11 (1) any application for eviction to the Rent Control Tribunal will not be successful.

If the property does not meet any of the above prerequisites, then with the expiration of the rent period or the legal termination of the rental agreement, the tenant will not be deemed a “statutory tenant” but rather a trespasser, so the owner can proceed with the aforementioned procedure to the Courts.

Article 11(1) exceptions
The exceptions under Article 11(1) of the Law, among others, include:

(a) Rent arrears where the rent has been in arrears for more than 21 days from the day the notice was given; (b) The tenant causes nuisance or persistent annoyance to third party neighbours or uses the property for illegal and immoral purposes; (c) The tenant caused or failed to prevent the causing of serious damage to the property or where the state of the property is further damaged as a cause of actions (d) of the tenant or of his intentional serious negligence; (e) The tenant sublets the property, notwithstanding the express prohibition of subletting; (f) The tenant makes a profit manifestly disproportionate to the rent payable.

In cases where any of the exceptions provided above exist and the rent in arrears does not exceed €3.000, the application to the Rent Control Tribunal will be heard within one year from the date of filing to Court, provided that the tenant will appear before Court through his/her lawyer. If the rent in arrears exceeds €3.000 the hearing process and adjudication of the case exceeds two years. It should be noted that, for the entire duration of the hearing process during which the tenant is residing in the property, he/she is obliged to continue to pay the respective rent payable to the owner.

Recent amendments
It is evident that the Rent Control legislation is uneven and favours the tenant, especially the “bad tenants”, resulting to intense debate between stakeholders in amending the current legislation. Indeed, on 31st January 2020 the Amendment Law of the Rent Control Law 3(I)/2020 (the “Amendment Law”) was implemented, following approval from Parliament. Nonetheless, the amendment only concerns the exemption 11(1)(a), according to which the recovery of possession of property is estimated to take place within approximately 6 months from the commencement of the eviction procedure.

Notably the transitional provision of the Amendment Law specifies that its provisions “do not apply to cases that have been filed to the Rent Control Tribunal before the date of its entry into force, as well as for rents that became payable before 31/01/2020, provided that they are paid within 12 months of such date”, thus limiting its scope of application even further.

The new court procedure
According to the provisions of the Amendment Law, the process of eviction of tenants who do not pay their rent has been shortened and the owners will be able to recover possession of their property in a period not exceeding 6 months from the date on which they commence eviction process.

In particular, the owner must give written notice to the tenant requesting payment of late rentals within 21 days of service of such notice. If this deadline expires, then the owner acquires the right to file an Eviction Application with the Rent Control Tribunal. Upon filing of such Application, the tenant is entitled to file a Response to the Application only if it is accompanied by evidence that such rents have been paid to (i) the Court, (ii) the owner, or (iii) to the bank account of the owner’s representative.

It should further be noted that the decision of the Registrar of the Court to accept or reject the filing of the Response shall be submitted within three (3) business days to the Court for final approval or rejection.

A judgment by the Court is not subject to appeal and where an Eviction Order is obtained, the Court must determine the time of compliance with that Order, which in accordance with the new provisions cannot be less than ninety (90) days.

Although the provisions of the Amendment Law are considered as a positive step towards enhancing the rights of the owners of immovable property, however the real effectiveness of the new "fast track" procedure remains to be seen and will most likely be subject to further discussion.

Authored by: Demetris Kailis, Mikaela Kantor, Tania Tofaridou

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