Renting property in Cyprus is a popular practice, especially for foreign investors and businessmen. However, despite high levels of trust, tenants sometimes fall behind on payments, which can be a problem for landlords. To minimize this risk, it is important to carefully spell out the terms of the lease.

1. Payment terms and timing

One of the most important aspects of any rental agreement is clarity in the terms regarding payments. In Cyprus, as in other countries, tenants need to know exactly when and how much they have to pay. It is important to specify not only the amount of rent to be paid, but also clear deadlines for payment.

2. Penalties and fines for late payments

In order to prevent late payments, penalties should be provided for each day of delay. These penalties should be reasonable and reflect the landlord’s actual losses. For example, tenants should be required to pay a penalty for each day of late payment, which will be an additional incentive to pay on time.

Cyprus law provides certain limits for penalties and it is important to comply with them. According to the Contract Law, penalties exceeding 10% of the amount owed may be invalidated.

3. Guarantee requirements (deposit)

One of the main instruments of protection for the landlord is the deposit. In Cyprus, tenants are usually required to pay a deposit which can be used in the event of default. The amount of the deposit can vary, but the standard practice is 1-3 months’ rent.

4. Terms of termination

In order to avoid lengthy litigation over unpaid rent, it is important to provide for termination clauses. In Cyprus, landlords have the right to terminate a lease in the event of significant breaches of contract, including non-payment of rent within a certain period (e.g. 30 days).

5. Agreement on court costs and jurisdiction

In case of breach of contract and the need for litigation, it is important to spell out in advance who will bear the costs of legal fees. In most cases, the costs of legal support and court fees are borne by the party that lost the lawsuit.

6. Real estate insurance

One aspect that helps to protect the tenant’s assets is property insurance. In Cyprus, a landlord may require the tenant to take out rental property insurance to minimize the risks in the event of damage.

7. Other terms and conditions

In addition to the basic aspects, it is important to include other terms in the lease agreement that relate to the use of the property. For example, if the tenant violates the terms of use or changes the use of the property without the landlord’s consent, this may be grounds for termination of the agreement.

Thus, the inclusion of clear and detailed terms and conditions in a property rental agreement in Cyprus can significantly reduce the likelihood of late payments. Particular attention should be paid to aspects such as payment terms, late payment penalties, deposit, termination clauses and property insurance.