InsiderBusinessUncertainty over short-term property lease agreements

Uncertainty over short-term property lease agreements

With summer just around the corner great uncertainty prevails over the Mediterranean island’s real estate market and tourism sector because of the coronavirus, Phileleftheros reports.

Under normal conditions everyone should be thinking about their holidays since many Cypriots were renting out apartments for the summer season. And a number of companies used to undertake the management of these short-term leases.

However, with the state of play being so different these days landlords are warned that contracts need to be renegotiated.  The forecast, afterall, is that it will be very difficult to rent out all available properties this summer.

Companies managing short-term leases are expected to make their moves after April when the level of uncertainty  is lower. Undoubtedly, tourist areas will be hit the worst since short-term apartments for lease are in plethora there. And if no tourists come to Cyprus, then the number of vacant apartments this summer will be way too high.

Head of the Cyprus Real Estate Valuers Association Kyriacos Talatinis told Phileleftheros that demand for short-term leases is expected to drop.

“It is only natural that this type of leases will suffer a big blow. The number of unoccupied apartments, especially in tourist areas, will be high. Owners, so far, have relied on both local and overseas demand and I believe that, with so much uncertainty, locals will be the ones mainly interested in short-term leases. But then again, how many locals will go on vacation this year?,” he asked.

As for contracts, he said it all depends on whether there are provisions over the prevailing extreme situations and what the clause should be in the case a contract is unilaterally broken.

At the same time, as the coronavirus outbreak is spreading around the world, thousands of travelers either cancel or postpone their reservations. Tourism is struggling to keep up with the rapidly evolving coronavirus pandemic and to adapt to the new state of play with airlines also being on the verge of financial disaster.

As a matter of fact, the Airbnb electronic rental platform has already announced changes to its cancellation policy, loosening strict penalty provisions.

By Demetra Landou

Read more:

Coronavirus: Cyprus real estate sector already hit

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