Listed below is the priority we recommend when deciding which utility or service provider to pay on your rental property in Cyprus. The precise priority will depend to some degree on whether you have long or short term tenants i.e. for long term rentals the tenants should be paying the electric.
1. Water is a basic necessity and it should be your top priority to pay this bill ahead of any other. You might even want to set up a direct debit to ensure it is paid every 3 months and then collect the funds from your tenant. Fortunately water bills are quite modest in Cyprus. Not only is water a basic necessity but if you do get disconnected for none payment many Councils will not reconnect the water supply until all refuse bills are also paid (see item 6 below).
2. Electric bills should be your next priority as your tenants will not be very pleased if the air con isn’t working in mid summer (or mid winter as they also heat the properties). Unless you have tenants staying for less than a month the rental price should exclude electric but normally electricity is only transferred to a tenants name for rentals of 6 months and longer. So through the summer you will be responsible for ensuring the electricity is paid even if the guests reimburse you at the end of their stay (probably from the breakages bond collected when the rental began).
3. Management Company – unless you live on the island you should have a company to manage your property. This may be the same company as your Rental Agent but in many cases they are separate companies, especially if you source your own tenants. Guests will not be very happy if the Management Company refuses to carry out essential repairs because you haven’t paid them for previous jobs they have carried out i.e. cleaning, security checks, plumbing etc.
4. Rental Agent – unless you are fortunate not to need tenants, either short or long term, you will probably have commission to pay from time to time. This should be your next priority as agents will not source tenants for owners that don’t pay them. Many agents ensure they receive their commission by deducting it from the gross rental income so it may not be a bill that you have to prioritize. If required the rental agent will also be able to pay the other costs within this list on your behalf, perhaps with the exception of the mortgage.
5. Communal Fees unless you own a private villa there will be communal fees to pay for the upkeep of the complex and common areas / facilities. Although this is towards the bottom of the list it doesn’t mean it has low priority. If the fees are not paid you and your guests will not be able to use the communal facilities (pool, gym, tennis court etc). Your tenants will have a legal right to terminate the tenancy agreement if the facilities they are helping to pay for are not available to them. Similarly short term guests could ask for a refund if for example the pool is not available due to inadequate maintenance.
6. Refuse Bills compared with Council Taxes in the UK are a modest amount and less than €100 per year in some areas. The bills are issued annually and have a low payment priority as generally the only way the Council can force you to pay it is if your water is disconnected for none payment (see item 1 above).
7. Mortgage – some owners consider this their top priority but we consider it to be the last payment you make (especially if you were mis-sold the mortgage in the first place). Banks today are in a VERY weak position, especially in Cyprus and even though they will impose interest and penalties on late payments it is less important than water and electricity etc.
In our next article we will outline some of the preparations you should be making now in readiness for the arrival of your guests this summer (servicing air con units, weeding the garden and providing digital TV to Cypriot guests etc).Tweet Please help us to inform everyone that is thinking of buying a property in Cyprus to read our buying guide by clicking the Social Network buttons above.