A new legislative proposal tabled in the House of Representatives seeks to introduce a legal framework aimed at protecting tenants of primary residences from excessive rent increases, while preserving landlords’ property rights and the principles of the free rental market.
The bill was submitted on behalf of ALMA – Citizens for Cyprus by MPs Odysseas Michaelides and Michalis Paraskevas.
Filling a gap in tenant protection
According to the explanatory memorandum accompanying the proposal, the legislation is designed to address a gap in protection for tenants living in properties that fall outside the scope of Cyprus’ Rent Control Law.
The proposed framework would apply exclusively to primary residence tenancy agreements. It would not introduce a new rent-controlled tenancy regime, grant tenants the right to remain in a property after the expiry of a lease, or interfere with the free negotiation of the initial rent between landlord and tenant.
Instead, the objective is to strike a balance between protecting tenants from excessive rent increases and safeguarding property rights while ensuring the smooth operation of the housing market.
Rent increases limited to once every two years
Under the proposal, landlords and tenants would remain free to agree on the initial rent at the start of a tenancy.
However, restrictions would apply to subsequent rent increases during the same tenancy or when renewing or extending an existing lease.
The bill proposes that rent may only be increased once every 24 months. Any increase would be limited to the lower of:
the percentage specified in the tenancy agreement; or
the percentage set by a decree of the Council of Ministers.
The legislation also establishes a statutory maximum increase of 6% every two years, unless the tenancy agreement provides for a lower increase.
the percentage set by a decree of the Council of Ministers.
The legislation also establishes a statutory maximum increase of 6% every two years, unless the tenancy agreement provides for a lower increase.
New transparency requirements for landlords
Landlords would be required to provide tenants with at least 60 days’ written notice before any rent increase takes effect.
The notice would have to clearly state:
the current and revised rent;
the percentage increase;
the legal basis for the increase; and
the method used to calculate the permitted limit.
If these requirements are not met, the proposed increase would have no legal effect until the statutory obligations have been fulfilled.
the percentage increase;
the legal basis for the increase; and
the method used to calculate the permitted limit.
If these requirements are not met, the proposed increase would have no legal effect until the statutory obligations have been fulfilled.
Measures to prevent circumvention
The proposed legislation also contains safeguards designed to prevent landlords from bypassing the cap through additional charges or other financial obligations that effectively increase the overall rent.
Any contractual clause requiring a tenant to waive rights granted under the legislation would automatically be deemed void.
The proposal further introduces a rebuttable presumption of abusive conduct where a landlord refuses to renew or extend a tenancy and subsequently lets the same property to another tenant within six months at a rent exceeding the permitted increase.
In such cases, the landlord would be required to demonstrate that the decision was based on legitimate grounds, including:
occupying the property as their own residence;
selling the property;
carrying out substantial renovations; or
serious breaches of the tenancy agreement by the existing tenant.
selling the property;
carrying out substantial renovations; or
serious breaches of the tenancy agreement by the existing tenant.
Exception for major property improvements
The proposed cap could only be exceeded where landlords have undertaken substantial, documented improvements to the property.
Examples include:
energy efficiency upgrades;
significant electrical or plumbing works; and
extensive refurbishment projects.
Routine maintenance and repairs resulting from normal wear and tear would not qualify.
Any additional increase linked to improvement works could only be implemented after the works have been completed, the costs fully documented, and either
significant electrical or plumbing works; and
extensive refurbishment projects.
Routine maintenance and repairs resulting from normal wear and tear would not qualify.
Any additional increase linked to improvement works could only be implemented after the works have been completed, the costs fully documented, and either
the tenant provides written consent; or
the competent court grants approval.
the competent court grants approval.
District courts to handle rental disputes
The bill assigns exclusive jurisdiction for disputes arising under the proposed legislation to the relevant District Court.
The courts would have the authority to:
invalidate unlawful rent increases;
order landlords to refund overpaid rent; and
award compensation where attempts to circumvent the legislation are established.
The proposal also makes clear that the legislation would not apply retrospectively. It would affect only new tenancy agreements and lease renewals or extensions agreed after the law enters into force.
order landlords to refund overpaid rent; and
award compensation where attempts to circumvent the legislation are established.
The proposal also makes clear that the legislation would not apply retrospectively. It would affect only new tenancy agreements and lease renewals or extensions agreed after the law enters into force.
Balancing tenant protection and property rights
The proposed legislation aims to introduce targeted protections for tenants of primary residences that are currently outside Cyprus’ rent control framework.
According to the explanatory memorandum, the intention is not to replace the existing rent control system or create a new statutory tenancy regime. Instead, the proposal seeks to establish reasonable safeguards against excessive rent increases while maintaining an appropriate balance between tenant protection, landlords’ rights and the effective functioning of Cyprus’ housing market.
