Legalising the Use of Commercially Leased Buildings in Cyprus
There are many ongoing disputes in Cyprus regarding the landlord’s refusal to provide the permit after the tenant has already signed the rental agreement, most frequently in cases of a businesses or shops who are renting the premises.
Moreover, there is a requirement to hold the landlord responsible to sign any further applications regarding any future alterations in the use or the appearance of the premises for the duration of the contract. The lack of such provision in the initial agreement often leaves the tenant without any grounds for remedy should the landlord refuse to any application requests. The prior incorporation of the provision effectively binds the landlord and in the event of refusal or an omission to co-operate, the court then has the discretionary power to issue legalise any alteration which will improve the status of the property.
Such a case was dealt with by the Nicosia Rent Control Court involving a dispute whereby the landlord refused to sign a permit for changing the use of a tenants shop. Initially, the shop was being used as a warehouse and the tenant converted it into a retail shop by making the relevant amendments and improvements both to the interior and exterior of the premises after agreeing with the landlord. After he refused to sign the amendment allowing the change of business, the tenant faced criminal proceedings for wrongful trading.
The court observed that the changes and alterations were reasonable and necessary and resolved the dispute once and for all by issuing the order against the landlord, making him sign the application and plans for the issuance of the necessary permits.
It is a truly interesting case for Cyprus, as it was an ongoing dispute that lasted over many years, with the landlord trying to evict the tenant from the property and the latter defending his possession and investment over the shop. The creation of the agreement, giving the tenant the right to use the shop for retail purposes, enabled him to successfully enforce the landlord to fulfill his contractual obligations.
It is evident from the above case that even for a commercial tenancy, the parties must seek security in writing in order to precisely regulate their rights, especially the tenant who is at greater risk of loses, not only for the investments made in buildings that are not their own but also to keep their trading license. Additionally, all tenants in Cyprus who are leasing properties for commercial or business reasons are advised to exercise their rights as early as possible to stop any avoidable difficulties or objections by the landlord.
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