After many years in the property sector, I have seen Cyprus’ real estate market go through many cycles. I have experienced economic downturns, managed complex investments and worked with a wide range of professionals and institutions.
Yet one problem remains stubbornly unresolved. It is an issue that undermines landlords’ confidence and, ultimately, the health of the rental market: the inconsistency and bad behaviour of some tenants.
I would also add the related issue of rent control, which remains unresolved. I have spoken about it many times and will not explore it further here.
Let us be honest. The property market is not a charity. A tenancy is a business relationship based on mutual trust. When that trust is broken, the consequences are not only financial. They can also have wider social effects.
We all know the scenario. A tenant leaves a property without warning, before the tenancy agreement has ended. Unpaid rent may be left behind, along with utility bills and service charges. That may not be the end of the problem.
The property can also be returned in a poor state. Fixtures may be broken, cupboards damaged and walls left dirty. Basic maintenance may have been ignored. Yet the same tenant may still demand the return of their deposit, while denying responsibility for the damage.
In many cases, the deposit covers only a small part of the resulting loss.
Landlords can be left with few options
The landlord can then find themselves at an impasse. Taking legal action can mean entering a lengthy and costly legal process. Lawyers’ fees, delays and the possibility that the tenant cannot afford to pay compensation can make the process ineffective.
The result is often simple: the landlord absorbs the loss.
That is not acceptable in a modern economy.
Why would a tenant behave in this way? One reason is that the market currently provides little deterrent. There is often no effective consequence for poor behaviour.
A tenant can leave one property and move into another without the next landlord knowing what happened previously.
This is where I believe a Tenant Reliability Register could play a role.
I am not proposing another slow legal process that would make the system impractical. I am proposing a digital tool that could record relevant information quickly and transparently.
How could a tenant register work?
The register would act as a deterrent. If tenants knew that their rental record could be considered when they applied for another property, the cost of irresponsible behaviour would increase.
The simple knowledge that poor conduct could affect a future tenancy may encourage greater responsibility.
But any such system would need clear rules. It must not become an unchecked blacklist. The information recorded would need to be accurate, relevant and subject to proper safeguards.
One of the most important elements could be a digital condition report.
When a property is handed over to a tenant, its condition could be recorded using photographs and a digitally signed report. The same process could be followed when the property is returned.
This would create a clear record of the property’s condition at the beginning and end of the tenancy.
The system could operate on a subscription basis for landlords and provide access to a Tenant Rating Score based on verified rental information.
A documented before-and-after record could help establish whether damage or neglect occurred during the tenancy. The aim would be to reduce disputes by making the evidence available from the outset.
GDPR must be part of the solution
Naturally, data protection and GDPR would be central to any such system.
That should not, however, prevent a serious discussion about how technology could improve trust in the rental market. Cyprus already has systems such as the Artemis Credit Bureau that provides credit information in the banking sector.
There is a case for considering whether a carefully regulated system could also support greater transparency in residential lettings.
If a tenant has a strong record of meeting their obligations, they should have nothing to fear from a fair and accurate system. At the same time, landlords should have reasonable protection against repeated and documented misconduct.
The safeguards would be crucial. Tenants should be able to challenge inaccurate information, and records should only contain information that is lawful, relevant and properly verified.
Protecting the supply of rental homes
As a property professional who has seen thousands of cases, I believe that a lack of effective safeguards can discourage owners from putting properties on the rental market.
Some landlords may become reluctant to invest in rental property or make existing homes available. If that reduces supply, it can put further pressure on rents.
This is why a tenant assessment system should not be viewed simply as a mechanism for punishment. It should be about creating a more balanced and transparent rental market.
The state should establish the legal and regulatory framework. Professional bodies representing valuers and estate agents could potentially play a role in managing the system, helping to ensure independence, consistency and reliability.
Time for a more transparent rental market
The property sector is entering an age in which data can play a much greater role. Trust should not have to depend entirely on a landlord taking a chance. Where possible, it should be supported by reliable and verifiable information.
Anyone who wants to enjoy the benefits of a tenancy should also accept the responsibilities that come with it.
Cyprus’ rental market deserves to be transparent, fair and, above all, secure. The debate should begin now, before irresponsible behaviour becomes the rule rather than the exception.
That debate is particularly important as Cyprus’ rental sector becomes increasingly multicultural and more diverse.
The objective should not be to create a blacklist. It should be to create a fairer system in which good tenants are recognised, landlords are better protected and both sides enter a tenancy with greater confidence.
(Translated from an article published in Kathimerini by Andreas A. Andreou, MRICS, CEO, APS Andreou Property Strategy – Chartered Surveyors)
