Chamber calls for Constitutional entrenchment of new rent laws
David Darmanin
The Chamber of Commerce and Enterprise yesterday presented its position paper on the rent reform White Paper, going as far as proposing that the new rent laws should be entrenched in the constitution once enacted.
The Chamber of Commerce and members from the Federation of Estate Agents, the Malta Hotels and Restaurants Association, and the Chamber’s ad hoc committee on rent reform, said they were determined in protecting the rights of those landlords whose property is rented out to “illegitimate tenants” – or as former Chamber president Reggie Fava crudely described the “infamous rent laws” as “the greatest social injustice in Malta”.
Asked how the Chamber managed to garner the support of those members whose security of tenure was about to end once the new laws are enacted, Fava said: “We have convinced them by being reasonable. We called a meeting for members and whoever was interested attended. There was a debate on two extremes and we had to strike a balance. We have ensured however, that any decision taken was not taken by vote but by consensus. Besides, every single point featured on the white paper was discussed exhaustively at council level.”
Among the most salient points addressed by the Chamber, there is disagreement with the White Paper proposal of adjusting commercial rents according to the turnover of the firm tenanted in a property.
“This should be directly related to the value of the property and not to the size of the business,” said Chamber of Commerce director-general Kevin Borg.
The Chamber is also suggesting that rent is adjusted by the inflation rate at the year of the commencement of the rental period, to date.
“It is to be clearly understood that this is a first measure applicable as on 1 January 2009, with the full market value of the rented property achieved over four periods of three years each, that is after 12 years,” Borg said.
In line with this recommendation, the Chamber insisted that the 20-year sunset period due to be allowed to commercial tenants was too long and that it should be brought down to 12 years.
The Chamber is also opposing the idea of taking away security of tenure from those companies affecting a transfer of shares. “Companies should be allowed to transfer shares freely and without interference. If they wish to do so, it is nobody’s business but theirs,” he said.
Borg also pointed out that properties used as clubs by political parties, band clubs and similar organisations, should not be excluded and are to fall within the parameters of the law.
“It would be very unfair for a property owner to be getting a pittance from an organisation that is using the property to make money. While one is making money the other is left standing like a lemon,” he said.
Borg mentioned the provisions of the Housing Decontrol Act, and its 1979 and 2007 amendments, where terminated emphyteutical concessions were allowed to be converted to lease. “The law was wrong in this case, so we do not see why those properties that were previously under emphyteutical concession (ċens) should be applicable to this new legislation.”
Chamber president Tancred Tabone said the Chamber had followed this issue for decades because it was deeply concerned with the prevailing social injustices on property owners.
He insisted that the Chamber is acting on ‘high moral ground’ and has ensured it presented its position to the social policy minister as well as to other constituted bodies before going public.
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