Rent increase in Cyprus: what a landlord may ask and fair rent
Rents in Cyprus, especially in Limassol, Nicosia and Larnaca, have risen sharply in recent years, and many tenants receive a notice that the rent will go up. Whether the landlord can increase the rent, and by how much, depends on the type of tenancy. If your home is a controlled property under the Rent Control Law of 1983 (Law 23/1983), a building in a controlled area completed by 31 December 1999, and your contractual term has ended so that you are a statutory tenant, the rent cannot be increased except as the Law provides. Under section 8, either the landlord or the tenant may apply to the Rent Control Court to fix a fair rent, but not earlier than two years after the tenant took possession or after the last rent change; the parties may also agree an increase in writing within the maximum percentage set under the Law. When fixing a fair rent, the court considers the market rent and the average rent in the same small area and all circumstances other than personal ones. Outside rent control, which covers most newer homes, the rent is whatever the contract says: an increase during a fixed term is possible only if the agreement provides for it, and at renewal the landlord can propose new terms. This guide explains both situations and how to respond.
Key facts
Deadline
Statutory tenancies: no application to fix a fair rent before two years have passed since the tenant took possession or since the last increase or reduction of rent (Law 23/1983, section 8(2)). A fair rent fixed by the court applies from the date the application was filed (section 8(3)). Non-controlled tenancies: increases only on the dates and in the manner the contract provides, or at renewal.
What to do
Establish the type of tenancy. Check whether the property is a controlled property: a building let as a residence or shop, within a controlled area, completed by 31 December 1999 (section 2 of Law 23/1983). If so, and the contractual term has expired while you remain in possession, you are a statutory tenant and section 8 protects you against unilateral increases.
If the building is newer or outside a controlled area, the Rent Control Law does not apply, and your rights depend on the contract and the Contract Law, Cap. 149.
Read the rent clause. Many contracts provide for an annual increase by a fixed percentage or by reference to inflation. If the contract contains such a clause, the increase applies as written. If it does not, the landlord cannot increase the rent during a fixed term without your agreement.
A notice from the landlord that 'from next month the rent will be' a higher amount, without a contractual basis, has no binding effect during the fixed term. Reply in writing, refer to the contract and continue to pay the agreed rent.
At the end of a non-controlled fixed term, negotiate. When a fixed-term tenancy outside rent control expires, the landlord may offer a new tenancy at a higher rent, and you may accept, negotiate or leave. Compare the proposed rent with similar properties in the area and consider the cost and uncertainty of moving.
If you accept, sign a new written agreement or an addendum stating the new rent, the term and whether further increases are allowed. Avoid open-ended clauses allowing the landlord to set the rent at will.
Statutory tenants: increases only through the Law. Under section 8(1) of Law 23/1983, no increase can be imposed on a statutory tenant except as the Law provides. The parties may agree in writing on an increase not exceeding the maximum percentage set under section 8(4), or either party may apply to the Rent Control Court to fix a fair rent.
The application cannot be filed earlier than two years after you took possession or after the last increase or reduction of the rent. A demand for a higher rent outside this framework is not binding on a statutory tenant.
If the landlord applies to the Rent Control Court. The court fixes the fair rent taking into account the market rent and the average rents in the same small area, without regard to the scarcity of similar properties, and all circumstances except personal ones: the age, character, size, location and condition of the property, among others (section 8(5)). Both sides usually present valuation evidence.
Prepare evidence of the condition of the property (defects, lack of maintenance, old installations) and of comparable rents. A property in poor condition commands a lower fair rent.
Understand when the new rent applies. Under section 8(3), the fair rent fixed by the court applies from the date the application was filed, so the tenant may owe a difference for the months while the case was pending. Set aside the possible difference to avoid arrears.
After the decision, pay the new rent from the date fixed by the court. Failure to pay the lawful rent after a written demand can expose a statutory tenant to an application for recovery of possession under section 11.
Tenants can also apply. A statutory tenant who considers the rent excessive may also apply to the Rent Control Court to fix a fair rent, subject to the same two-year rule. This can be useful where the rent agreed years ago exceeds the current fair rent for the area or the property has deteriorated.
Take advice on the likely outcome before applying: the court may also fix a higher rent than the current one.
Keep the relationship documented. Whatever the type of tenancy, put every rent change in writing, pay by bank transfer with a reference to the month and the property, and keep the receipts. If the landlord refuses to accept the agreed rent in order to create arrears, send it by registered letter: under the Rent Control Law, rent sent by registered letter to the person entitled to it is considered tendered.
If the dispute escalates, mediation under Law 159(I)/2012 can help agree a new rent without a court case.
What to watch out for
- Paying a unilateral increase without checking the contract or the Rent Control Law, which may be taken as acceptance.
- Refusing to pay any rent in protest. Pay the agreed rent and dispute the increase in writing.
- Signing a new short tenancy with a higher rent without understanding that it may affect your status as a statutory tenant.
- Ignoring the retroactive effect of a fair rent fixed by the court from the date of the application.
- Agreeing to open-ended indexation clauses without a cap.
- Assuming rent control applies to a building completed after 1999.
Legal basis
Related court decisions
Frequently asked questions
Can my landlord increase the rent in Cyprus?
It depends on the tenancy. Outside rent control, only as the contract allows during a fixed term, or by agreement at renewal. For a statutory tenancy under the Rent Control Law, only by written agreement within the legal maximum or by a court decision fixing a fair rent.
How often can rent be increased under rent control?
An application to the Rent Control Court to fix a fair rent cannot be filed before two years have passed since the tenant took possession or since the last increase or reduction of rent, under section 8(2) of Law 23/1983.
How is fair rent calculated in Cyprus?
The Rent Control Court considers the market rent and average rents in the same small area, ignoring scarcity, and all circumstances except personal ones, such as the age, size, location and condition of the property (section 8(5) of Law 23/1983).
My contract has no increase clause. Can the landlord still raise the rent?
Not during the fixed term without your agreement. At the end of the term, a landlord outside rent control may propose a new rent as a condition of renewal; you can accept, negotiate or leave.
From when does a court-fixed fair rent apply?
From the date the application was filed with the Rent Control Court, under section 8(3). The tenant may therefore owe the difference for the period while the case was pending.
Can a tenant ask the court to lower the rent?
Yes. A statutory tenant may also apply to the Rent Control Court to fix a fair rent, subject to the two-year rule. Take advice first, because the court decides the fair rent independently and could set it higher.
Is there a general rent cap in Cyprus?
There is no general cap for tenancies outside rent control; the rent is agreed in the contract. Controlled tenancies are protected by the Rent Control Law, which limits increases through the fair rent procedure and the maximum agreed increase.
What if I refuse the increase?
Outside rent control, if the increase is not based on the contract, continue paying the agreed rent and object in writing. At renewal, refusing may mean the tenancy ends. Statutory tenants cannot be evicted for refusing an unlawful increase, but must pay the lawful rent.
Does the Rent Control Law also apply to shops?
Yes. Law 23/1983 applies to buildings let as residences or as shops within controlled areas and completed by 31 December 1999. Many fair rent cases before the Rent Control Courts concern shops and offices. The same two-year rule and fair rent criteria apply.
Can the landlord demand a higher rent from a new tenant?
For a new letting outside rent control, the rent is freely agreed. For a controlled property, a new contractual tenancy is also agreed freely, but once the contractual term ends and the tenant stays on as a statutory tenant, increases are again governed by section 8 of Law 23/1983.
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