14.04.2022
Traveling through our cities and seeing their center as well as their surroundings, you feel that much needs to be done to improve their image and, consequently, the quality of life of their inhabitants. The most basic area for achieving this goal is the condition of buildings and, in general, the spaces where citizens live.
Focusing on buildings, we emphasize that in order to improve their appearance, significant modernization is required, firstly in terms of appearance, secondly, their safety and, thirdly, increasing their energy efficiency. And all this applies not only to very old buildings, but also to buildings built in the last twenty years.
The question is, why would owners make these upgrades to their buildings and invest significant sums? The answer is simple. The main motivation is the expectation of financial gain. Unfortunately, today they cannot count on any benefit.
What are the conditions leading to this benefit?
Leases: For buildings constructed prior to 12/31/1999 that are known to be subject to leases, the State is responsible for determining the maximum rent increase.
In particular, over the last ten years ending in April 2023, the state, in its wisdom, decided on a zero increase in rent. The result of this decision is that apartments, shops, offices and houses subject to rent have significantly lower rents than new ones built after 01/01/2020.
This provision of the rental unit results in a significant increase in the rent for the rest of the property, as the rental units are not on the market.tragic
You know what’s tragic? If the owner wants to improve his property, he cannot do this, since there is no way to reclaim his property from the tenants to carry out the relevant work.
In a nutshell, a particular law creates a lot of distortions that also affect the renovation of buildings, which should be immediately repealed.
When it comes to shared buildings, i.e. buildings with more than five apartments, there is a buzz, especially when the building starts to need a major overhaul.
According to statistics, one in ten residents do not pay their utility bills, dragging others along with them, leaving home funds in short supply and managing committees unable to proceed with necessary projects to improve the condition of specific buildings.
One of the reasons for the existence of such problems is the lack of a culture of collective ownership and life. An even more important reason is the delay in the administration of justice, when the management committee decides to go to court to recover outstanding ordinary users.
Immediate action
It is necessary immediately, without making a decision, to promote the change and improvement of the existing legislation, which has been in circulation between the various competent departments and services of the state over the past ten years.
Another important reason for the decline of our cities is taxes. Are owners tired of seeing new taxes/fees introduced or existing ones raised? In particular, they pay municipal property tax, sewer tax, rent tax, defense tax, income tax, national insurance, transfer fees and, of course, VAT.
Not only is taxation unaffordable, taxes are too numerous and complex. This leads to the fact that many landlords do not pay them on time and pay a fine.
An immediate reduction in many taxes is required. To define a tax when someone buys a property, one when someone owns a property, and one when someone sells a property.
The most tragic thing for owners is the lack of government protection when tenants leave the property, leaving unpaid bills such as water, electricity, utilities and many losses, expenses that the owner ultimately bears.With all these problems, who in their right mind would want to own a property since all they would do is pay and not collect even a small amount of rent for their property?
Licensing and Securitization: Instead of the government incentivizing citizens to renew their property, the licensing process, especially for old and preserved buildings, is confusing and time consuming.
The same applies to the issuance of documents of title in cases where one of the owners may have committed an illegal act, and the bride is paid by everyone.
With a few simple but important actions, the state could improve the image of our cities and the lives of their inhabitants without incurring costs, simply by promoting appropriate measures, many of which we mentioned above.
If these measures are taken, the situation will certainly improve and an impetus will be given to increase the number of objects for rent and, most importantly, as a direct consequence, the amount of rent will decrease.
*Director of FOX Smart Estate Agency. President of the Cyprus Property Owners Association (KSIA)
