What happens when a tenant terminates tenancy early?
Following early termination of a tenancy, the owner of the rented property may find issues arise with the tenant, either regarding rent owed or compensation for damages to the landlord until he finds a new tenant, or for damages to the propert
Following early termination of a tenancy, the owner of the rented property may find issues arise with the tenant, either regarding rent owed or compensation for damages to the landlord until he finds a new tenant, or for damages to the property, or even for fixtures or equipment that the tenant left behind and seeks compensation for their value.
It is desirable that many of these issues be resolved within the framework of the rental agreement between the parties or that they be aware of them so that they can be resolved, without ending up in court and suffering, and being subjected to expenses, unless the tenant does not cooperate.
The primary concern of a landlord, when a tenant terminates the contract and abandons the premises, is to take possession of the premises, with reservation of their rights, and to take steps to re-let the premises, mitigating their damage. If rent is due or damages were caused, he may also claim them against the tenant.
Appeals court decision
These issues were analysed in the decision of the Court of Appeal in C.A.252/2020, dated November 11, when a tenant prematurely terminated the rental of premises and abandoned them before the expiration of the rental agreement. The Court of Appeal upheld the first-instance decision, stating that the court correctly concluded that the owner had made timely reasonable efforts to mitigate his damage, so he was entitled to compensation.
The property was rented as a single space and the parties knew that for this reason there was limited demand and the creation of separate spaces was economically unprofitable and difficult to implement. It was therefore not wrong or unreasonable for the owner to seek to find a tenant for the entire single space.
Regarding the tenant’s claim demanding from the owner the value of some equipment, the Court of Appeal referred to relevant case law. Article 2 of the Immovable Property Law, Cap. 224 provides for the words “immovable property” to include attachments to the building, but does not specify what these are. However, it can be said that it is a construction that has been placed or applied to a building so that it forms part of it.
The Court of Appeal noted that the tenant did not agree that he was entitled to remove the equipment he installed, such as escalators, elevator, display cases, air conditioning, heating systems, lighting, electrical installations, doors and windows and ceiling covers, nor was it agreed that they remain in the property and therefore, since there was no agreement on the issue in question, the provisions of the legislation apply.
Criterion for appendices
The court said it appeared that the aforementioned equipment constituted, according to the aforementioned definition of immovable property, attachments that are firmly attached to the property, when no express provision was made for the right to remove them, after the end of the lease belong as immovable property to the owner. The court of first instance correctly rejected the tenant’s counterclaim, it said.
Regarding the meaning of the word “appendices”, reference was made to case law where it was decided that appendices are any tangible goods permanently and solidly connected to the building and, as a rule, form part of the immovable property and are transferred with it. However, the lessee may add attachments to the real estate and retain the right to remove them at the end of the lease.
When an object is connected to the immovable property, it is stated, a presumption arises that the object has ceased to be a movable object and is now part of the immovable property. This presumption is rebuttable and it can be proven that the conditions in relation to the degree and objective purpose of the attachment are not met.
Regarding the degree of attachment, the general rule is that the object must be actually attached to the real property to be considered an attachment. Objects that simply sit on property are not considered attachments.
If the object is completely unrelated to the use of the real estate and has been attached solely to better use it as a movable object, then it is not considered an accessory, such as paintings, wall clocks, electric lamps. If the object has been attached for the better and easier use of the building, then it is considered an accessory, like bathrooms, washbasins, electrical and plumbing installations and locks.
George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: coucounis.law@cytanet.com.cy, tel: 24818288
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