The protection of the owner of a property subject to the Rent Control Law proves to be insufficient, since he is not allowed without a final judgement to collect the amount of the rents due which the tenant deposited at the accounting department of the Court. While the tenant is given the right to deposit the rents claimed by the landlord as due rents in Court so that he is allowed to file a Reply, no mechanism was provided for in the amending Law 3(I)/2020 for the landlord to collect them. The legislator only enshrined the tenant’s right to be heard by giving him three options, either to pay the rents in arrear to the landlord upon receipt or to deposit them in a banking institution for the benefit of the landlord or to deposit them in the accounting department of the Court. Upon presentation of the relevant receipt, the Registrar of the Court will accept the tenant’s Reply, who will be entitled to state his allegations and be heard.

When the tenant deposits the amount of the rents in the accounting department of the Court, the payment is not made for the benefit of the landlord, but for the purpose of enabling the tenant to file a Reply. The landlord in such a case cannot collect the amount deposited, he will wait until the case is tried and depending on the outcome of the case, the Court may issue a judgment ordering the payment to the landlord of the amount deposited for the rents due up to the filing of the application. The landlord has no other remedy regardless of whether the tenant, after filing his Reply and until the issuance of the final judgment of the Court, pays or not the rents due. The tenant, after service of the eviction application to him, usually deposits the amount of the rents claimed in the accounting department of the Court so that to be allowed to file his Reply. After he makes the payment, he may not continue paying the rents due thereafter, taking advantage of the insufficient legislation which protects him in contrast to the landlord who remains without sufficient protection.

The issue is raised in a judgment issued by the Rent Control Court on 31.5.2022 in the context of examining the landlord’s application for the collection of the amount of €40.000 that the tenant deposited in the accounting department of the Court as a condition for him to be allowed to file a Reply. The Court asked both the landlord and the tenant to state their views as to whether the landlord had a right to collect the amount. The issue was considered by the Court as novel and that there is no previous guiding caselaw. After quoting the relevant legislation, the Court pointed out that the amendment of the Law came at a time when the phenomenon of unjustified non-payment of rents was quite worrying, to the extent that it constituted a socio-economic problem in the sense that the non-payment causes instability in the rental market and the local economy in general. Despite the Court’s conclusion below, the amendment of the law is necessary to provide protection to the landlord as well.

The Court emphasized that it was an attempt of the legislator to entertain the concerns of the social group of property owners, who were facing the phenomenon of late payment of rents. Landlords are necessarily involved in legal proceedings (resulting in the delay in the collection of the amounts owed to them), only to assess at the end of the day that, in most cases, the tenants have no substantial defence. With the amending Law, conditions are set for the tenant to be allowed to file a Reply in cases of eviction Applications, by which the landlord claims the eviction of the tenant due to non-payment of the rents.

The Court concluded that the intention of the Legislator was to provide three options to the party wishing to file a Reply to a Rent Control Application based on article 11(1)(a). The choice was left to the tenant and the legislation has not further regulated the deposit of the sums in the accounting department of the Court. Nor does subsection (ii) of article 11(1)(a) create a right to the landlord to automatically collect the deposited amount. The Court repeated that the deposit in the accounting department of the Court constitutes the fulfilment of the condition for the acceptance of the tenant’s Reply; no reference is made in the Law to pay the deposited amount to the landlord, obviously because the amount of the deposit remains in the possession of the accounting department to ensure the execution of the Court’s decision and in this way the rights of both parties are protected.