Landlord’s position when the tenant terminates the tenancy early

"The owner must take reasonable steps to mitigate his damage’’

Τhe owner of a rented property happens to find himself faced with an early termination of the tenancy and 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 the landlord, when the tenant terminates the contract and abandons the premises, is to take possession of the premises, with reservation of his rights, and to take steps to re-let the premises, mitigating his damage. If rent is due or damages were caused, he may also claim them against the tenant.

 Appeals Court Decision

All the above issues are analyzed through the decision of the Court of Appeal in C.A.252/2020, dated 19.11.24, when the 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 that 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 the equipment, the Court of Appeal referred to relevant case law, referring to article 2 of the Immovable Property Law, Cap. 224, which provides for the words "immovable property" to include attachments firmly attached to any 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, e.g. escalators, elevator, display cases, air conditioning - heating systems, lighting, electrical installations, doors and windows, cover ceilings, nor was it agreed that they remain in the property and therefore, since there is no agreement on the issue in question, the provisions of the legislation apply.

Criterion for appendices

It appears that the aforementioned equipment, the Court of Appeal states, constitutes, according to the definition of "immovable property" in article 2 of Chapter 224, attachments that are firmly attached to the property and therefore, since no express provision was made for the right to remove them, after the end of the lease, they belong as immovable property to the owner and the Court of First Instance correctly rejected the tenant's counterclaim.

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.

From the fact of the connection of an object with the immovable property, it is stated, all that arises is a presumption 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.

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 real property are not considered attachments.

Objective purpose of the annexation

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, e.g. 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, e.g. bathrooms, washbasins, electrical and plumbing installations, door keys.