Amendments to the Malta Leases Legislations and their Effects
By means of legislative amendments, the landlords of such properties are now able to file an application before the Rent Regulation Board to demand that the rent amount be revised and increased to an amount not exceeding two percent (2%) per annum of the free and open market value of the property. This applies both to:
- landlords of properties which are subject to a lease agreement which initiated prior to 1st of June 1995
- landlords of properties which had been subject to an emphyteusis which initiated prior to 1st of June 1995, and eventually automatically transferred into a lease, by operation of the law.
By means of such application, the landlord also has the option to request that new conditions be established regarding the lease.
The legislation establishes a means test which the lessee must undertake to prove his ability to pay the increased amount or otherwise. The means test also establishes criteria of income and assets which the lessee must satisfy. Should the lessee fail to satisfy such criteria, the Board, upon the request of the landlord, would have the power to order the eviction of the tenant. In such case, the tenant has 2 years to vacate the property and would also be liable to compensate the lessor for such an interim occupation.
Constitutional Remedies
Despite such legislative amendments, landlords of such properties still retain very little control over their own property. This is because the amount of rent payable by the lessees, may only be increased up to 2% of the value of the property and the lessors do not have the right to terminate the lease in accordance with their wishes. This means that the fundamental human right of the landlords, that is, the right to property, is being breached, as landlords are in a situation where they may not make use of their own property as they wish.
Several court judgements, both local and European, have declared the pre-1995 rent provisions unconstitutional and deemed them as breaching the right to property protected by Article 37 of the Constitution of Malta and the First Article of Protocol Number One of the European Convention on Human Rights which holds:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law”.
Anthony Debono et vs Attorney General et
In the judgement Anthony Debono et vs Attorney General et, the Constitutional Court declared that the Maltese government had stepped in with the introduction of Chapter 69 of the Laws of Malta in order to protect the rights of tenants. However, considering that private individuals were being placed with this social weight for a long period of time without due compensation from the State, entailed that their right to property was accordingly prejudiced. Hence, the Court declared the lack of compensation by the state to property owners, in such circumstances, to be unconstitutional1.The owners of the property were compensated the amount of €20,000 in damages for the disproportionate prejudice to their right to property.
What are Your Options as a Landlord?
If you are the landlord of a property which has been subject to a lease as from prior to 1st of June 1995, you have the ability to file an application before the Rent Regulation Board so that the amount of rent which the lessee pays may be increased, and the conditions of rent may be varied, as stated above. In light of the fact that such variations are subject to the limitations imposed by the law, owners of such properties also have the right to file an application against the state of Malta, for the breach of human right which such laws are causing to the owners of such properties.
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