The laws regulating leases in Malta have been subject to numerous changes over the years. Initially, the change in rent laws was motivated by a necessity to protect the interests of the lessee. However, further down the line, whilst lessees were benefitting from the provisions of the law, the landlords were in a disadvantageous position. Throughout the years, various attempts have been made by the state to try and reach a balance between the interests of the lessees and the interests of the lessors. Significant amendments have been introduced in the law in the recent years, which laws aim to balance the interests of both lessees and lessors.
The Old Rent Laws in Malta
When Chapter 69 of the laws of Malta was promulgated, the intention of the legislator was the protection of the lessee. By means of such laws, the lessee was protected so much so that the lessor was practically prohibited from extending the period of lease or revise the rent amount. The descendants of the original tenants held unfettered rights to retain use of the premises in question, whilst also being relatively secured from considerable fluctuation of the rent amount. This reality brought about by the provisions introduced in the law, meant that the landlords had limited control over their property, resulting in landlords being effectively stripped off the right to their own property.
The New Rent Laws in Malta
The amendments introduced in 1995
In 1995, new legislation on leases has been introduced, with the aim of achieving balance between the general interests of the lessee, and the enjoyment of proprietary rights of the landlord. These new laws established a cut-off date being the 1st of June 1995 and held that leases which had been entered into prior to this date, remain to be regulated by the old provisions of the law, whilst leases which have been entered into after the cut-off date, would be regulated by the new provisions of the law.
These new laws still did not achieve the desired balance between the lessors and the lessees and this was because such amendments still allowed the possibility of family members to inherit the lease of the property, at an absurd rental amount.
The amendments introduced in 2008
The 2008 rent provisions laid down that leases could not be extended to a tenant’s grandchildren beyond the 1st of June 2008. The amendments introduced in 2008 also sought to address those leases which remained subject to the pre-1995 rent provisions. These new legislative provisions of 2008 introduced 4 main changes:
- From 1st January 2009, the minimum quantum of rent was set to €185 per annum, subject to a revision every three years, in accordance with the rate of inflation at the time.
- Property owners were able to raise their rent up to 10% of the costs which might pertain to them for their duty of upkeeping the tenement
- The property owners’ obligation of maintenance is now limited solely to structural works and roof repairs
- The lease could only be inherited once by the lessee’s children, provided that the children were still living with their parents at the time of the parents’ death.
The amendments introduced in 2018
In 2018, a new article was incorporated into the law. By means of this article, the lessors of a pre-1995 lease have the possibility to make an application before the Rent Regulation Board, demanding that the rent be reviewed and increased to an amount not exceeding two percent (2%) per annum of the free and open market value of the property. The lessee is to submit documents to prove whether he satisfies the means test established by law. If the lessee does not satisfy the means test, the lessor may request for his eviction.
Although the amendments introduced in 2018 were considered as a huge legal reform, these amendments were only applicable to leases which had initially started out as contracts of emphyteusis (and which were subsequently transformed into lease by operation of the law).
The amendments introduced in 2021
In 2021, an article was introduced into the law, by virtue of which the lessor may make an application before the Rent Regulation Board for the rent to be revised to an amount not exceeding two percent (2%) per annum of the free and open market value of the property. The lessor may make use of this article, even if the property has always been subject to a lease agreement, rather than a contract of emphyteusis which was eventually transformed into a contract of lease.
Where the lessee meets the criteria of the ‘means test’, s/he would be able to continue to reside in the tenement, subject to a potential increase in the rent capped by law. Should the tenant fail to meet the criteria of the ‘means test’, the Board would grant the tenant a period of 2 years to vacate the property. In such case, during the interim occupation, the lessee would be liable to compensate the lessor an amount which shall be determined by the same Board.
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