# Residential Rent Reduction?



## MacManiac (Jan 25, 2012)

I saw a thread on another forum that there is a measure being voted on in the Cypriot Parliament this Thursday which is proposing a reduction of 20% in both commercial and domestic rents. It is apparently on Page 2 of the Cyprus Weekly, although I can find no trace of it on their online edition. Wishful thinking?


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## Guest (Jun 4, 2013)

MacManiac said:


> I saw a thread on another forum that there is a measure being voted on in the Cypriot Parliament this Thursday which is proposing a reduction of 20% in both commercial and domestic rents. It is apparently on Page 2 of the Cyprus Weekly, although I can find no trace of it on their online edition. Wishful thinking?


How can the government influence rents in properties that is not owned by them. I think I saw something like this but only for premises owned by the state

Anders


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## MacManiac (Jan 25, 2012)

Anders, This is Cyprus


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## Sarchy (Feb 14, 2011)

MacManiac said:


> I saw a thread on another forum that there is a measure being voted on in the Cypriot Parliament this Thursday which is proposing a reduction of 20% in both commercial and domestic rents. It is apparently on Page 2 of the Cyprus Weekly, although I can find no trace of it on their online edition. Wishful thinking?


This has been in the air for some time now...something to do with helping people during these difficult (for many) times. It was most definitely in the papers and the vote, as you stated, is this coming Thursday. I hope that it goes through as our Cypriot landlord (who has already reduced our rent) rents two commercial premises and is struggling with the high rents that he has to pay on those premises...it would certainly help him to keep his business afloat if the vote goes through.


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## PeteandSylv (Sep 24, 2008)

Vegaanders said:


> How can the government influence rents in properties that is not owned by them. I think I saw something like this but only for premises owned by the state
> 
> Anders


Why not? Rents are regulated in the UK via the Residential Property Tribunal.

Pete


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## MacManiac (Jan 25, 2012)

Is there an outside chance that the government believes a reduction in domestic rents might stimulate the economy by increasing the disposable income of those who rent? That's fine for everyone except landlords. As someone who rents, I shall watch this with interest - but without holding my breath


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## Guest (Jun 4, 2013)

PeteandSylv said:


> Why not? Rents are regulated in the UK via the Residential Property Tribunal.
> 
> Pete


But not in Cyprus I assume?

And how would it be controlled?

Would ofc help many but I see the difficulties if it is also for private properties.

Anders


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## PeteandSylv (Sep 24, 2008)

Vegaanders said:


> But not in Cyprus I assume?
> 
> And how would it be controlled?
> 
> ...


No, not in Cyprus but it indicates that rents can be controlled and I expect they are in many other places too. That's in answer to your question about how the government can influence rents on properties that don't belong to them.

I'm not sure about this measure at all. Landlords are businesses that are entitled to make reasonable profits and any business that is forced to have it's income reduced while it's costs remain the same suffers. Also not forgetting that the Landlords also suffer from the drop in their property values. The net result of this to the government could be lower tax revenues.

On the bright side I can see no creditable reference to this anywhere so I'll just put it down to the Ex-Pat rumour mill for the moment.

Pete


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## Sarchy (Feb 14, 2011)

Most definitely not an Ex-Pat rumour Pete. From this weeks The Cyprus Weekly:

Quote:

"RENT REDUCTION
HOUSE TO DECIDE ON BILL TO CUT RENTS NEXT WEEK

The House Plenum is next Thursday expected to vote on a bill slashing residential and commercial rents by 20%.

As it includes a ceiling for reductions, the proposed change is not expected to impact large scale rentals such as those to banks, big companies and government departments.

The House Interior Committee yesterday continued its discussion of the bill which, as it stands, sees a maximum reduction of €120 for residences an €400 for commercial properties such as shops and offices. Committee chairman George Lamaris yesterday told reporters that proposed reduction would have a one year duration beginning from June 7 this year and applies to the first €600 residences and €2,000 for commercial properties.

No further reduction for amounts above these has been tabled which means that the same reduction would be applied for rentals of €800 for example, as that for monthly rents of €600.

Lamaris also clarified that the changes would apply to contracts entered into prior to 2013 and for tenants who have fulfilled their obligations to their landlords over the past two months and by June 7. it is suggested that compensation be given wherever other reductions had already been made in the last 18 months.

Lamaris, an Akel MP, called on the government to support the bill in spite of Attorney General concerns that it is unconstitutional. Also commenting on the proposal yesterday, Disy MP Andreas Kyprianou said that his party was carefully considering the bill and the Attorney General's concerns.

he noted that because of the many available properties, most rents had already been reduced and that the market was currently in the tenant's favour.

Kyprianou also expressed concern that legally enforced reductions would have a negative impact on a property's value with the risk of creating related non-serviceable loans as a result.

Media sources have indicated that only Akel and the Green Party appear to be in favour of the bill with other parties not yet making their final positions known."

End of quote.


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## PeteandSylv (Sep 24, 2008)

Thanks for that, I obviously missed it. I wonder why the Cyprus Mail did not report it. They usually like contentious government stuff.

Pete


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## Guest (Jun 4, 2013)

Sarchy said:


> Most definitely not an Ex-Pat rumour Pete. From this weeks The Cyprus Weekly:
> 
> Quote:
> 
> ...


To me this looks as another "haicut", this time for the landlords


Anders


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## 5Stingray5 (Dec 21, 2012)

Vegaanders said:


> But not in Cyprus I assume?
> 
> And how would it be controlled?
> 
> ...


When renting in Limassol during the 60s with HMForces the property and the rent had to be passed by the RAF admin guys whose office was on the Arch Bishop Makarios Ave (Then known as the Limassol bypass), they would say if the rent was fair and the property fit, they also provided the rental agreement which the 'granny' signed using her thumb print as she couldn't write.
We actually kept the agreement and recently gave it to the daughter of the landlord/lady who really appreciated it as part of her family history.


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## theresoon (Apr 11, 2008)

Wasn't this supposed to be voted on this past Thursday? What happened? I haven't heard anything new on it. If it does not pass and my landlord doesn't lower our rent I will start to look for another place. 

The way I see it our salaries were slashed and we were not asked. Any landlord with common sense will see the need to reduce the rent in order to keep their tenants. Otherwise what will happen to them is they will lose their tenant, have a place empty for half a year then decide they have to lower the asking rent anyway, they might find a tenant who will negotiate down from the asking rent and lose even more than had they lowered the rent on their original tenant.


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## MacManiac (Jan 25, 2012)

I was discussing this over a cold beer yesterday afternoon with a couple of friends from the forum. It was suggested (and I haven't been in Cyprus long enough to have thought of this) that as many of the members of the parliament are property owners, the chances of this legislation being passed are rather slim. It will be interesting to see what happens, and I am not averse to having a reduction in my rent. In fact, come October, when our tenancy agreement is due for renewal it will be a point of negotiation, whatever the result of the vote.


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## Guest (Jun 9, 2013)

MacManiac said:


> I was discussing this over a cold beer yesterday afternoon with a couple of friends from the forum. It was suggested (and I haven't been in Cyprus long enough to have thought of this) that as many of the members of the parliament are property owners, the chances of this legislation being passed are rather slim. It will be interesting to see what happens, and I am not averse to having a reduction in my rent. In fact, come October, when our tenancy agreement is due for renewal it will be a point of negotiation, whatever the result of the vote.


I have read a lot about this and I can't see how it would be possible that the Government in a EU country can be allowed to in a dictatorial way decide the level of allowed rents in a private property. If this goes through, what will be the next? 25% off the petrol price? Will result in no petrol for sale. 

I can understand the thinking behind it but I really doubt it would be possible. Not even the former government suggested a law like that.

That civil servants got slashed salaries most people (except themselves ofc) accepted. And that they have to contribute 1,5% to the social find must be also accepted even if the private employee with much less salary have to pay about 7%. as self-employed I have to pay 12,6 %.

I probably walk in a minefield but I stand by my opinion. Cyprus government seems to realize the facts, now the Cypriots has to do the same.

Anders


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## 5Stingray5 (Dec 21, 2012)

Anders you have to ask yourself which aspect and how much of it was due to affairs regarding property market that caused the financial collapse in Cyprus .


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## Guest (Jun 10, 2013)

5Stingray5 said:


> Anders you have to ask yourself which aspect and how much of it was due to affairs regarding property market that caused the financial collapse in Cyprus .


What do you mean?

Anders


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## theresoon (Apr 11, 2008)

Vegaanders said:


> I have read a lot about this and I can't see how it would be possible that the Government in a EU country can be allowed to in a dictatorial way decide the level of allowed rents in a private property. If this goes through, what will be the next? 25% off the petrol price? Will result in no petrol for sale.
> 
> I can understand the thinking behind it but I really doubt it would be possible. Not even the former government suggested a law like that.
> 
> ...



I don't know if you realize that there is a lot of strict regulations regarding rents in Cyprus already. And some places in inner city can only charge peanuts for rent. Also, it was not just the government employees salaries that got slashed but also the private sector. I know people (in the private sector) whose salaries were reduced upto 45%.


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## PeteandSylv (Sep 24, 2008)

5Stingray5 said:


> Anders you have to ask yourself which aspect and how much of it was due to affairs regarding property market that caused the financial collapse in Cyprus .


Are you suggesting that Cypriot property developers taking advantage of the stupidity of mainly British people in feeding a house price boom had so much money that they had no choice but to place it in Cypriot banks whose management were forced to invest it in vast amounts of bonds in Greece, a country with an aversion to paying taxes and of such excessive expenditure that they required a bailout from the EU thus encouraging Merkel to enjoy her bullying fetish by devaluing the Greek bonds and creating an unmanageable deficit in Cyprus while the Idiot President of Cyprus continued to stuff his face at free lunches while muttering in Russian?

ound:

Pete


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## MacManiac (Jan 25, 2012)

PeteandSylv said:


> Are you suggesting that Cypriot property developers taking advantage of the stupidity of mainly British people in feeding a house price boom had so much money that they had no choice but to place it in Cypriot banks whose management were forced to invest it in vast amounts of bonds in Greece, a country with an aversion to paying taxes and of such excessive expenditure that they required a bailout from the EU thus encouraging Merkel to enjoy her bullying fetish by devaluing the Greek bonds and creating an unmanageable deficit in Cyprus while the Idiot President of Cyprus continued to stuff his face at free lunches while muttering in Russian?
> 
> ound:
> 
> Pete


Rather a breathless post, Pete


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## Veronica (Apr 5, 2008)

5Stingray5 said:


> Anders you have to ask yourself which aspect and how much of it was due to affairs regarding property market that caused the financial collapse in Cyprus .


The financial collapse was caused by the banks and the previous government totally mismanaging things. Nothing to do with the property market.
In fact without the property market this country would have gone under a long time ago. The bail out fiasco has affected the property market though.


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## PeteandSylv (Sep 24, 2008)

MacManiac said:


> Rather a breathless post, Pete


Yes, I fainted after typing it !!!

Pete


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## 5Stingray5 (Dec 21, 2012)

PeteandSylv said:


> Are you suggesting that Cypriot property developers taking advantage of the stupidity of mainly British people in feeding a house price boom had so much money that they had no choice but to place it in Cypriot banks whose management were forced to invest it in vast amounts of bonds in Greece, a country with an aversion to paying taxes and of such excessive expenditure that they required a bailout from the EU thus encouraging Merkel to enjoy her bullying fetish by devaluing the Greek bonds and creating an unmanageable deficit in Cyprus while the Idiot President of Cyprus continued to stuff his face at free lunches while muttering in Russian?
> ound:
> Pete


if they had so much money why did most developers who were in cahoots with bent solicitors choose re-mortgage on land that they'd already received payment for from the so called "Stupid British", with the _oh so respectable_ Cypriot solicitors helping them rip off ex-pats?
So where did the money go that the re-mortgaging developers had been paid by the duped and badly advised ex-pats?


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## Veronica (Apr 5, 2008)

5Stingray5 said:


> if they had so much money why did most developers who were in cahoots with bent solicitors choose re-mortgage on land that they'd already received payment for from the so called "Stupid British", with the _oh so respectable_ Cypriot solicitors helping them rip off ex-pats?
> So where did the money go that the re-mortgaging developers had been paid by the duped and badly advised ex-pats?


The banks were at fault in this case as well because they should not have allowed the developers to remortgage on properties where buyers had specific performance lodged in the land registry. This was illegal and once again the banks were complicit.


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## 5Stingray5 (Dec 21, 2012)

Veronica said:


> The banks were at fault in this case as well because they should not have allowed the developers to remortgage on properties where buyers had specific performance lodged in the land registry. This was illegal and once again the banks were complicit.


If this was the UK or any civilised country the Solicitors would be struck off, in actual fact they are/were the main culprits, they were the ones who held the key as to advising their clients that it was safe to complete without obtaining the title deeds, after all that is what they're paid for or were they being paid by someone else as well?


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## PeteandSylv (Sep 24, 2008)

5Stingray5 said:


> if they had so much money why did most developers who were in cahoots with bent solicitors choose re-mortgage on land that they'd already received payment for from the so called "Stupid British", with the _oh so respectable_ Cypriot solicitors helping them rip off ex-pats?
> So where did the money go that the re-mortgaging developers had been paid by the duped and badly advised ex-pats?


I fear you might be taking my light hearted view rather too seriously. 

However the hundreds of millions lost through property issues are still chicken feed compared to the billions lost in the haircut on Greek bonds.

Pete


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## Guest (Jun 10, 2013)

theresoon said:


> I don't know if you realize that there is a lot of strict regulations regarding rents in Cyprus already. And some places in inner city can only charge peanuts for rent. Also, it was not just the government employees salaries that got slashed but also the private sector. I know people (in the private sector) whose salaries were reduced upto 45%.


But the salaries in the private sector is not slashed because something government has decided, that is for sure.

And I still think that the private owners can charge the rent that the market can take, I don't believe there is any restrictions until I see them in writing. For state owned I can understand it, for private property no. No one knows except the landlord and the tenant the level of the rent.

Anders


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## 5Stingray5 (Dec 21, 2012)

Veronica said:


> The banks were at fault in this case as well because they should not have allowed the developers to remortgage on properties where buyers had specific performance lodged in the land registry. This was illegal and once again the banks were complicit.


What you aren't saying is that is that the solicitors could and should have refused to complete without the title deeds being issued, the fiasco only continued due to malpractice by the solicitors.
The developer still owned the land when it was re-mortgaged, the solicitors knew this but still allowed the unsuspecting buyer (their client) to be placed in a precarious position regarding none ownership of land they'd supposedly paid for.


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## Veronica (Apr 5, 2008)

5Stingray5 said:


> What you aren't saying is that is that the solicitors could and should have refused to complete without the title deeds being issued, the fiasco only continued due to malpractice by the solicitors.
> The developer still owned the land when it was re-mortgaged, the solicitors knew this but still allowed the unsuspecting buyer (their client) to be placed in a precarious position regarding none ownership of land they'd supposedly paid for.


Now you are showing your ignorance in how the property market in Cyprus works.
Title deeds cannot be issued until the whole of a development is completed and the completion certificate is issued. At this point it goes to the land registry and an AX number is given and the process of issuing the title deeds begins. This can stil take a year or two after the AX number is issued because the land registry is so slow.
The point is that once specific performance has been lodged at the land regsitry on a property in the buyers name it is then illegal for the developer to take out any further mortgages on the land. Equally it is illegal for the banks to give these mortgages. If anything goes wrong the banks cannot seize the property if they gave loans AFTER specific performance was lodged on behalf of buyers.
If lawyers refused to allow clients to buy on developements until title deeds were issued no properties would ever have been sold.

But you still don't seem to grasp that the biggest reason behind the mess the country is in is due to mismangement by the previous government and the banks buying stock in Greek banks.


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## Guest (Jun 12, 2013)

Veronica said:


> Now you are showing your ignorance in how the property market in Cyprus works.
> Title deeds cannot be issued until the whole of a development is completed and the completion certificate is issued. At this point it goes to the land registry and an AX number is given and the process of issuing the title deeds begins. This can stil take a year or two after the AX number is issued because the land registry is so slow.
> The point is that once specific performance has been lodged at the land regsitry on a property in the buyers name it is then illegal for the developer to take out any further mortgages on the land. Equally it is illegal for the banks to give these mortgages. If anything goes wrong the banks cannot seize the property if they gave loans AFTER specific performance was lodged on behalf of buyers.
> If lawyers refused to allow clients to buy on developements until title deeds were issued no properties would ever have been sold.
> ...


I suggest that this thread is closed. It's now VERY far from the original subject

Anders


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## Veronica (Apr 5, 2008)

Vegaanders said:


> I suggest that this thread is closed. It's now VERY far from the original subject
> 
> Anders


I agree Anders. 
Consider it closed


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