“Express” Eviction of Non-Paying Tenants Under Recent Amendments of Rent Control Laws.
05 February 2020
The anachronistic law on statutory tenancies, namely the Rent Control Law of 1983, as amended (the “Law”) was generally recognized a thorn amongst owners of property falling within its scope. The Law was exploited by certain bad tenants who purposely avoided to pay rent using the protections against eviction embedded in the Law. Specifically, eviction in statutory tenancies is restricted only to certain specific wrongdoings of the tenants and the process of eviction, set by the Law, is lengthy and extremely taxing on the landlord, even in straightforward cases such as failure to pay rent. The Law was recently amended on the 31st of January 2020 by the Rent Control (Amendment) Law of 2020 (L. 3(I)/2020) (the “Amendment”) in an effort to mitigate this exploitation and now introduces a simplification and acceleration of the process provided by Law, making it much easier for landlords to evict delinquent tenants, at least in straightforward cases of not paying rent.
The amended Article 11 of the Law, which essentially shifts the burden of proof to the statutory tenant, provides that any tenant who failed to pay their rent will be given a written warning and 21 days to meet their obligations. If they fail to do so, the landlord can commence the eviction process by filing an application with the Rent Control Court Registrar (the “Registrar”). From that moment, the tenant has 14 days to pay all the due rents to the landlord and submit a counterclaim to the Registrar along with all the relevant payment receipts/invoices in order to defend himself against eviction. The Registrar, upon its decision on whether to accept or reject the counterclaim of the tenant, has 3 business days to submit its subject decision to the Rent Control Court (the “Court”) for final approval or rejection. In the case of issuance of eviction order by the Court, based on the landlord’s application as described above, the Court may afford the tenant a 90-day grace period to comply with the eviction order and therefore to hand over the property, whether residential or commercial. The Law will not be retroactive, granting tenants some time to pay their dues. In essence this amendment creates a process of eviction of a non-paying tenant in circa 3 months.
It is important to highlight that there is a legislative vacuum concerning tenancies which does not qualify as a “statutory tenancy”, namely for buildings constructed after 31/12/1999 which do not fall within the ambit of the Law (or in cases where the initial tenancy period has not expired). In such a case, where the tenant is not paying rent and refuses to vacate the property, in order for the landlord to be able to repossess his property, he has to proceed through the District Court where the property is situated with a claim of breach of contract, termination, trespass or otherwise. As a practical matter, litigation proceedings are quite lengthy and may take a year or more in practice and thus this delay again may be used as leverage by tenants in purposely not paying rent. In other words, the Amendment does not appear to benefit owners of property not falling within the ambit of the Law, who cannot use the “express” route in case of non-paying tenants and must still go through the process dictated by normal civil procedure rules. Perhaps the legislature may consider the adoption of additional laws which will serve to give all property owners equivalent access to this “express eviction” process benefit, as it is the case in many other developed common law jurisdictions, like the UK.
Furthermore, despite the significant improvement introduced by the Amendment, it remains to be seen as to whether issues may arise, by putting the discretion and power into the hands of the Registrar and taking away the power of the Court, in the eviction process. This perhaps may have a consequence of limiting the right of tenants, who have a justifiable reason not to pay rent, to a fair defence.
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Authors: Elina Petevinou, Varnavas Playbell
The above is for informational purposes only and does not consitute advice.