Cyprus | Posted:

The bill of AKEL to reduce residential and commercial rents from 15% to 20% for one year was enacted into law by the majority of the Cyprus parliament.

The law was approved with 31 votes in favor ( AKEL , the Democratic Party EDEK Ecologists and Environmentalists) against one ( Zechariah Koulias ) and 20 abstentions ( Democratic Rally and MP Antonis Antoniou Nikos Koutsou ).

The amendment of the Democratic Party which provided the exception of residential premises was not approved.

Specifically, the residential premises provided for a 15% reduction for rentals up to 300 euros and a 20% reduction in rents over 300 euros. The maximum reduction that can be imposed is around 120 euros.

With regard to commercial premises, the reduction of 15% applies to rentals as 600 euros, a reduction to 90 euro and a decrease of 20% for rentals exceeding 600 euros up to 2,000 euros, with a cap of 250 euros.

For rents of € 2,000 or more a maximum reduction is 400 euros will be imposed.

The Act covers contracts signed until September 1, 2012.

Any reductions already made should be offset.

MP Andreas Kyprianou said during the debate that his party intends to support the amendment of the Democratic Party, but abstained in the proposal.

Mr Kyprianou argued that the vast majority of rentals were adjusted between tenants and landlords. He mentioned the potential problems that will be created in the market due to loans held by landlords as the failure to repay them will be classified as non-performing loans.

MP Bambos Papageorgiou argued that market regulates itself but the extent that it regulates itself should be controlled by proper legislation.

On his part, the MP of the Democratic Party Angelos Votsis mostly concentrated in the amendment of his party, arguing that tenants of residential premises can easily move somewhere with cheaper rent , while businesses are more difficult to move.

The position that the market is not self-regulating and that the owners continue to charge high rents was supported by MP of EDEK Phidias Sarikas.