The Landlord's Guide To Renting Out Property In Cyprus.
This guide was made to inform you of your rights and responsibilities when renting/leasing property in Cyprus. There could be a million reasons why you would want to rent in Cyprus instead of buying, but we'll get into those another time.
Before you start:
Firstly, inspect your property thoroughly. Look out for any imperfections as well as structure, electrics and plumbing. You'll need to make sure that your property is up to scratch before anything else. Take pictures.
Then, make a complete list of items that you will be rented with the property. Everything down to cutlery (if rented furnished) should be documented and the complete list can be stapled to the contract. Any perspective tenant will likely inspect the property, its fixures and its contents too, so you'll be off to a great start with your side already taken care of.
If you are renting the property out furnished, you'll benefit from new and quality furnishing. You don't want to be called out every other week because an old/cheap washing machine has broken down again.
This part can be a little bit more tricky. Like most concepts in business, focus on what you think is fair, not what you need, or what you've seen others charge. Think about the tenants themselves, and what somebody is likely to be able to afford. Too many landlords in Cyprus try pushing up the price too high, leaving the tenants leaving after just a few months, and an empty property for several months in between. In the long run, you'll benefit from a steady income that suits all.
HINT: The average long term rental income of a property in Cyprus is 0.3% of its value. This however, can vary with property type.
Do you need an agent?
If you're not going to be around, chances are you'll need an agent to take care of things for you. Most will charge an initial fee once a tenant is found and a small monthly fee afterwards to cover any call-outs or maintenance work. Benefits of having an agent, of course, is that they will take much of the burden away from you during the entire process. Finding a tenant, drawing up contracts, attending to tenants needs and generally looking out for your wellbeing are all duties of the agent.
If, however, you live in the area and have some free time, you'll probably benefit from renting as a private landlord. You'll save on fees but you'll take on the responsibility of attending to tenants, should the need arise.
Advertising your property
So, you've inspected your property, taken inventory and decided on a fair price. On to finding your perfect tenant. If you've gone with an agent, they'll take care of that for you. If not, you can post a FREE advert here. Take some great pictures in Landscape format, in good light and with the property in good standing. Don't hide anything from the images, it'll just waste your time when viewers arrive. Be descriptive and honest. Mention anything that may be of value to your future tenant, no matter how small it can be.Make sure you also share the advert around social media for best exposure.
The 'norm' in Cyprus is to pay 1 MONTH's rent as a security deposit. You'll be expected to receive these funds and keep them secure (do not spend it) for the duration of the contract. The best idea would be to leave it in a high-interest account. Your bank can advise on the best way to handle the security deposit. The deposit is given to you to cover:
- Damages to the property
- Missing items from the property
- Outstanding rent payments
- Outstanding utilities (see Utilities for more information)
- Costs to the landlord for early departure (early termination of the contract)
Creating and Signing a Contract
It will be your responsibility to have the contract drawn up. Once completed, make sure that you read through it thoroughly. Take your time and don't rush into it. If anything needs to be amended, have the contract redrafted.
A contract in Cyprus MUST be written in Greek or English to be valid. Contracts in ANY other languages will not be accepted in court. Contracts must be signed by ALL parties and on EVERY PAGE. Make sure the contract mentions how and when the rent payments are to be made.
Payment of Rent
Payment of the fixed rent amount should be made monthly and IN ADVANCE, usually within the first few days of every month. It will be beneficial to allow tenants 4-5 in which to pay, instead of demanding on the 1st of every month. The first installment should be paid on the day the contract begins with the exchange of keys. If you initiate the contract in the middle of the month, and the future rent is paid at the beginning of the month, the tenant should to pay the half month pending AND the following month in advance. Whilst we always recommend payment via a digital method (direct debit, for example), many here in Cyprus pay their LandLords in cash. If you do decide to receive cash for your monthly rent payments, make sure you give s SIGNED receipt EVERY time.
Utilities & Bills
Normally, it is the tenants responsibility to hold utility contracts in their name. You may have to accompany your tenants to the corresponding electricity and water boards to sign the contracts in their name(s). In both cases, cash deposits are usually required payable to the companies themselves, so make sure your tenants are aware. You will then be releaved of any responsibility for the payment of these bills.
It is normally the tenants responsibility to install a telephone line, Internet or Digital TV. However, some landlords decide to keep their contracts running and simply include these services in the rental package.
If you need professional pool or gardening maintenance to comply with warranty conditions, you should discuss these costs with the tenant before-hand.
The tenant be responsible for:
For the duration of the contract, your tenant's responsibilities may include:
- General cleaning and upholding the property as well as any furnishings
- Upholding the gardens to a 'reasonable' standard (unless agreed otherwise)
- Replacing/Fixing any damaged items
- Behaving responsibly and not causing conflicts with neighbours
- Waste Disposal
- Payment of all utilities and taxes (which applicable)
- Payment of rent within the agreed time period
- Maintaining the property to the same standard it was given to them (or better)
- Maintaining electrical appliances (where applicable)
- Periodic cleaning of mattresses, sofas and other furniture
- Upholding the decor of the property
Your will remain responsible for:
The landlord has responsibilities too. These include:
- Periodically servicing appliances (where applicable)
- Replacing/Fixing faulty goods (where broken down, worn or otherwise which has not been caused by the tenant)
- Ensuring electrics and plumbing are to a legal safe standard and are working correctly
- Ensuring hot water system is running
- Maintaining the structure and fittings on the building
- Payment of mortgages, taxes, community charges or any other bills which have not been included in the contract.
- Reporting anything which may affect the future of the contract
Leaving The Property
At the end of the contract, you should vacate the property (if a renewal plan has not been made). You MUST make sure that you give the property back to the landlord in the same condition it was given to you or better. This may mean repainting, cleaning and any repairs before the due date. If utility bills are in your name, the landlord should accompany you to the electricity board and water board to cancel the contract (this may have to be done a few days before). The landlord or agent should inspect the property for any damages that were not repaired. Once satisfied that the property is in good standing order and there are no outstanding debts, you will then proceed to make the final exchange. You will surrender all rights to the property and return the keys (as well as any duplicates that have been made) and ensure that your personal belongings have been removed. In turn, the landlord or agent will refund your security deposit IN FULL via the same method you paid it. Should there be any damages or items missing from the property, the landlord will deduct the replacement or repair value from the security deposit before returning it to you.
Renewing your contract
If you are happy there, you may wish to renew your contract. Once again, it is the Landlord's responsibility to have a new contract drawn up. The monthly price may ONLY rise by the GRI (General Rate of Inflation) at this time, unless you mutually agree otherwise.