Legalising a change in use of rented premises

The parties to a rental agreement normally agree as to the use of the demised premises and a term is included obliging the owner to sign any necessary application for obtaining relevant permits, if there isn’t any for the particular use of the property.

The tenant should be careful before signing the tenancy agreement and ask the owner to provide any relevant permit regarding the use of the premises. Furthermore, they must make sure the owner is responsible for signing any necessary application for any future alteration in the use or appearance of the premises, particularly when the property is a shop.

The lack of such provision in a tenancy agreement will leave the tenant without remedy in the event the owner refuses to facilitate them. The existence of the provision binds the owner and gives the right to the tenant to demand the owner sign any application in the event they omit to or refuse to co-operate.

The court has the discretionary power to issue an order for the owner to sign the relevant application or documents needed for legalising the use or any alteration which will improve the status of the property.

Judgment of the Rent Control Court

Such a legal issue was dealt with by the Rent Control Court in a judgement concerning an owner who refused to sign the relevant application for their tenant to obtain a permit for changing the use of a shop.

Originally, the shop was rented as a warehouse and the tenant converted it into a retail shop, by making improvements and reasonable alterations therein. The tenant proceeded with the necessary changes and alterations following the agreement with the owner that was reached before the court previously.

Due to the refusal of the owner, the tenant faced criminal proceedings instigated by the relevant authority, including contempt of an order of the court.

In view of the aforesaid problems, the tenant applied to the court requesting an order directing the owner to sign the relevant application and documents necessary for the issue of the relevant permits.

His claim succeeded, even after the alterations and changing the use of the shop. The court observed that the changes and alterations were reasonable and necessary and issued the order against the owner to resolve the dispute once and for all.

It is remarkable that the dispute lasted for many years, with the owner trying to evict the tenant and the latter defending his possession of the shop.

The agreement made before the court gave the tenant the right to use the shop for retail purposes and enabled him to successfully force the owner to comply with his contractual obligations.

One of the owner’s arguments was that the original tenant had left the premises and gaving the possession of the shop to a company of the same group.

Ruling of the court

The court decided that the creation of the group of companies didn’t alter the legal status of the tenancy and noted that the presence of the group in the shop had been accepted by the owner.

The original tenant, who eventually became a statutory tenant, had always kept legal possession of the shop, irrespective of the use of the shop by other companies of the same group. The same businesspeople were using the shop, nothing changed and thus the argument of the owner failed.

It is evident from the above, that nowadays, even for a tenancy, parties must precisely regulate their rights in writing. In particular, tenants must take care to protect their rights from the outset, rather than later. Additionally, they are advised to exercise their rights as early as possible, in order to avoid unnecessary difficulties or objections by the owner.

George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: coucounis.law@cytanet.com.cy, tel: 24818288