Raising a Counterclaim before the Rent Control Court

“It is possible to raise a counterclaim before the Rent Control Court when there is identification of parties and same facts arising”

The choice of raising a counterclaim is a procedural issue and depends on the party against whom a claim is raised before the Rent Control Court. It is important that there is identification of parties and same facts arising so that it becomes necessary or desirable to examine the claim and counterclaim simultaneously rather than by separate application. The Court is responsible to regulate the procedure and has discretion to decide this procedural issue upon application by summons or by its own motion. It is therefore possible to raise a counterclaim in the Rent Control Court and for its proper raising, a pleading of the necessary facts that constitute the claim is required. From 1.9.2023, the new Civil Procedure Regulations apply, and specifically Part 21, as stipulated in Regulation 12 (a) of the Rent Control Procedural Regulations of 1983.

This issue is analyzed by the President of the Rent Control Court, in the decision she issued in K1/2022, dated 25.10.2024, in the context of an application for the determination of rent against a statutory tenant. The property owner claimed increase of the rent and the tenant raised a counterclaim for sewerage fees that he claimed to have paid, as well as various other amounts paid for repairs to the property and which, according to him, contributed to its improvement. For examination of such claims reference is required to the terms of the last tenancy agreement that are still into force and regulate the relationship between the owner and the tenant.

The Court's decision

The President of the Court, referring to relevant case law, ruled that a counterclaim is possible in cases before the Rent Control Court and that a claim for damages can easily be heard with a counterclaim for damages arising from the same facts. The same applies to a claim for recovery of possession with a counterclaim for loss of goodwill, which loss will arise from the recovery of possession or compensation for improvements made to the property by the tenant, where the improvements upon the transfer of possession will remain in the property. The Court added, however that any counterclaim does not automatically fit into any claim because the same parties are involved. In other words, the Court is given the discretion not to allow the counterclaim to be heard with the claim.

Conditions for raising a counterclaim in the Rent Control Court

The Court further analyzing the issue, she found the following:

Firstly, article 11 of the Rent Control Law sets out certain conditions for an eviction application to be supported, which set as a precedent the existence of a reason and basis for filling the claim.

Secondly, the counterclaim must mention the conditions of the reason for eviction, so that testimony can be offered. The conditions set out in the various sub-paragraphs of article 11(1) must necessarily be pleaded. The same applies to a notice based on article 11(2).

Thirdly, it appears that the claim for eviction can only be raised in the context of a case raised by the landlord and not as a counterclaim, since according to Form 1 of the Annex to the Rent Control Procedural Regulations, Regulation 7 and the provisions of Article 11, reference must be made to specific facts supporting the claim for eviction in a specific Form. This Form cannot be included in a counterclaim, but only in an originating application.

Fourthly, it held that, as counterclaims to an eviction application, claims for compensation may be easily raised, under articles 12 and 13, for the grant of a new tenancy under article 14, orders for the unhindered and peaceful possession of the leased property, orders under article 27(1) to comply with the terms of the last tenancy agreement and orders and claims for compensation under article 27(2) and, in an application for the determination of rent, a claim for a reduction of rent.

Conclusion

The President of the Court concluded that there is no possibility of raising a counterclaim in the form of a claim for the amendment, annulment of an order or decision of the Court in accordance with Article 6, since even in such a case, following Form 2 of the Annex to the Regulations and Regulation 7, the request must be formulated in an originating application with a statement of facts.

In relation to the case under consideration, the tenant's counterclaim for sewerage fees was not accepted because specific and sufficient evidence had not been presented. For the remaining counter claims of the tenant, the Court decided that they do not fit into a counterclaim in an application for the determination of rent and furthermore a relevant term of the tenancy agreement prevented him from raising them as claims.