What will happen with paying rent of temporarily closed companies in Cyprus?

Что будет с оплатой аренды временно закрытых компаний на Кипре?
21 April 2020 Liza Medvetskaya

The spread of coronavirus has been trying for strength for several weeks – thousands of companies are suffering losses due to the ban on continuing operations during the pandemic.

While the goods are not sold, and the services are not provided, the tenants are idle premises, and the payment is still charged. Many of them have already asked the owners about rental vacations or a reduction in rental rates. But not all landlords want to make a discount, because for someone this is the main source of income.

We wrote before, that the Cyprus Small Business Association sent letters to the President of Cyprus - Nikos Anastasiadis, the ministers of Finance and Justice, as well as the leaders of all parliamentary parties, in which they asked a proposal to reduce rent fees and provide subsidies to business owners.

Now, George Petru, General Director of the Federation of Employers and Industrialists (OEB) of the Republic of Cyprus, has joined in this problem. 

Mr. Petru sent to the Minister of the Interior of the Republic of Cyprus, Nikos Nuris, a list of measures developed, which in his opinion, would help resolve the issue between tenants and landlords regardingthe rental fee. 

His proposal covers only those companies in Cyprus, that are completely closed or have reduced their activities from the beginning of quarantine by more than 80%. The presented set of measures do not apply to real estate of private owners who lease it to the government or semi-government organizations and local governments.

The offer includes the following:

  • Suspension of eviction of tenants for 12 months, until March 2021
  • Prohibition of increase in rental fee until the end of 2021
  • For the companies that are completely closes – 50% discount in rents until they closed and 25% of rents are reduced from the moment they resume business until the end of 2020. At the same time, they will have the opportunity to pay rent in stages.
  • For the owners of real estate, whose rental of property in Cyprus is the mail source of income (more that 80% of the total family budget), any reduction in the amount of rent from the tenant side cannot be lower than 50% of its total income. If the amount is exceeded, the tenant will be able to pay the difference in stages.
  • The innovations specified in point 3 and 4 will be validify the tenant pays the amount of the rent on time, otherwise these rules do not apply to him.
  • The OEW proposed to create a Judicial Committee, which should be consist by the Government. There could be the owners of real estate or tenants for resolving some disputes. 

Что будет с оплатой аренды временно закрытых компаний на Кипре?

According to the project, the government is obligated to provide the owner of real estate to the victim of deductions – “Tax credit”, equal to 90% of the total loss of this income.

It’s supposed that the landlord will be able to use it as a repayment of TAX obligations, VAT or taxes on income from the rental of the property.

The last point, which contains the document, suggest that the government should also find ways to help enterprises that continue to work in extremely difficult conditions because of coronavirus.

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