ECONOMY

Landlords see delays in compensation

landlords-see-delays-in-compensation

Landlords have suffered during the pandemic from the forced reduction of rents, with the compensation from the state taking longer than expected to reach their bank accounts.

Finance Minister Christos Staikouras stated that landlords would get their compensation for November before midnight on Monday, while the compensation for December’s losses would be paid out by February 15.

Since March 2020, mandatory rental reductions of 40% have been in place for almost all commercial properties (stores, food service and bars) as well as for hotels, and a significant number of apartments, with numerous exceptions.

September and October aside, when the forced cuts were limited to tourism and cultural properties (such as cinemas and theaters), the last 10 to 11 months have inflicted huge losses on many property owners who rent out their assets.

Up until October the compensation to landlords for their lost revenues comprised offsetting 30% with future tax obligations (such as income tax, Single Property Tax etc).

For November and December 2020, the government restored the 40% forced cut on the rent of properties leased by companies that shut or were hit hard by the measures. However, the ministry decided to pay back the owners 50% of their losses, amounting to 20% of the entire rent.

This month it was announced that the companies affected will pay no rent whatsoever for January and February, with landlords standing to receive 80% of their losses in their bank accounts. The rental cut for the main residence of employees of those companies remained at 40%.

However, it is estimated that so far only half of the property owners entitled to compensation have actually received any. This was due to mistakes in the submission of details or by omissions by tenants who paid reduced rents while not entitled to utilize the measure. In a number of cases landlords found out about that some four to five months after the first Covid rental declarations (for March and April), resulting in conflicts between them and their tenants.

The federation of property owners (POMIDA) says the main problems for landlords is the long time between the payment of the rent and their compensation by the state, despite the tax mechanism’s efforts.