Insider Business Suspension of rents under review

Suspension of rents under review

Ministry of Finance technocrats but also parliamentary parties in Cyprus are considering proposals to suspend the payment of rents, primarily of commercial properties forced to close due to the coronavirus crisis.

Thousands of businesses forced to shut down after the first state decree in mid-March and which are set to be inactive till the end of April have no liquidity and cannot cover their rent obligations.

Even when the restrictive measures are lifted, no-one knows what situation thousands of small businesses with rental obligations will face.

However, the task of suspending rents is not easy, since a fair compromise must be found that won’t have a devastating effect on landlords.

The first step was taken in parliament with the recent approval of a legislative regulation banning evictions due to non-payment of rents because of the coronavirus crisis. The bill was submitted by the Ministry of Justice and voted in by the House plenum.

Government officials are sending the message that at a time when measures are being taken to boost income, support employees and employers and boost liquidity, the rental sector could not be left out.

In addition, ruling Disy financial experts are focusing on this issue, with insiders saying they will soon submit proposals to the executive branch with developments to follow.

One insider also said that suspension of rents will only apply to those whose shops or businesses are shut and not to those still in operation. And that, for the time being, the debate revolves around the commercial sector and the thousands of small businesses.

Under certain conditions, however, it could also be extended to households – just like in Greece where among the first coronavirus-related support measures was a “haircut” on rents.

As of March 20, Greek Finance Minister Christos Staikouras said businesses that have been “locked down” were eligible to a 40% reduction in rent. And so were their staff whose work contracts have been suspended and are forced to stay home.

On Tuesday, Cyprus’ small businesses association (Povek)  sent a letter to the President proposing a reduction in and subsidy for rents. The letter was also sent to the Ministers of Finance and of Justice and to leaders of all parliamentary parties.

By Theano Theiopoulou

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