The bill was originally passed by parliament in early October to lower residential and commercial rents for a period of one year. If made law, it would have applied to all contracts concluded prior to October 2012. However, president Nicos Anastasiades used his constitutional right to refuse to sign off on the law and it returned to parliament, the news portal explained. Mr Anastasiades believes the law violates Article 26 of the constitution, which protects the liberty of contract.
According to the constitution, "every person has the right to enter freely into any contract subject to such conditions, limitations or restrictions as are laid down by the general principles of the law of contract". If the law had been passed, this liberty would have been encroached upon and the president argued that the so-called 'Law of Necessity' could not be invoked to sidestep the constitution in this instance, Cyprus Property News explained. Such a move is only permissible in exceptional circumstances when public order or national security is at risk.
Prior to the decision to scrap the legislation, experts had declared that it was not the responsibility of the government to meddle in the housing market. Indeed, the Cyprus Property Owners Association warned that it would take any available legal measure if the government intervened, Cyprus Mail reported. Head of the body, Giorgos Strovolides, stated that rental prices are already falling naturally and many landlords are reducing rents to keep tenants. Had the law been passed, it would have been unnecessary and could have created more problems, including deterring foreign investors who are important to keep the market ticking over.