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Invalid tenancy agreement

The phenomenon of improper execution of a tenancy agreement is frequent and it affects mainly the rights of the tenant, especially when the tenancy is for a period exceeding one year and its further renewal is provided. The Contract Law provides that contracts relating to leases of immovable property for any term exceeding one year shall not be valid and enforceable unless expressed in writing and signed at the end thereof in the presence of at least two witnesses. When the tenancy agreement is verbal, it must be of a term of one year or less. In the case of a tenancy agreement that is not signed by two witnesses, despite its nullity, the tenancy exists if the tenant is in possession of the property. A question which reasonably arises is the consequences of such invalidity, how the tenant is affected, and what notice the landlord must give to terminate the tenancy.

Where there is a tenancy agreement which does not meet the provisions said out in the law, it is void and the tenancy becomes periodic from month to month or from year to year or according to the manner the rent is paid. The tenant is affected by such an agreement since the time period mentioned in the invalid tenancy agreement is not applicable and it is up to the landlord to terminate it. The termination is made with a notice depending on how the rent is payable or when the tenant does not pay the rents of the rent-controlled property, with a 21-day notice. Where the tenancy agreement provides for a tenancy period of more than one year, the tenant having the right to renew it for a further period, it expires at the end of the initial tenancy and the renewal clause is invalid.

The above issue was examined by the Supreme Court in a judgment issued on 15.10.2018 regarding a tenancy agreement which provided for a two-year tenancy with a provision for its renewal for another two two-year periods separately, but it was not signed by two witnesses, which made it void. The Supreme Court adopted the reasoning of the first instance judgment, which stated that while the relevant clause was perfectly clear as to the length of the period of the first tenancy and it was also clear that the tenant was the one who had the right to renew the tenancy, however, no reference was made as to the manner and time this right could be exercised; as a result, further to the invalidity of the tenancy agreement, the said renewal clause was found to be vague and unclear.

In the above case, the landlord demanded the tenant deliver possession of the premises to carry out maintenance, renovation and restoration, having given him a 4 months’ notice. The Supreme Court did not agree with the tenant’s position that the tenancy hadn’t become statutory, since the tenancy agreement was void, the initial tenancy had expired and the provision for its renewal was not applicable. Therefore, the tenancy was not required to be terminated, since the agreement had expired and the tenant had become statutory. With regard to the notice given, the Supreme Court held that it was valid. As regards the tenant’s claim that the landlord did not satisfy the provision set out in the law for “execution of works in a listed building”, part of which are the said premises, again the Supreme Court upheld the first instance judgment, considering that through the admitted evidence before the court the aforementioned works were necessary in accordance with the relevant permits and the consent of the minister, since the building was listed and its renovation could not be done either progressively or partially. Consequently, the Supreme Court dismissed the appeal with costs.

George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected], www.coucounislaw.com

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