David Darmanin After a year-long consultation process on the white paper proposing a radical reform in Malta’s rent laws, yesterday morning Social Policy Minister John Dalli announced that parliament has finally approved “all proposed amendments in legislation, so that the relationship between lessors and lessees is no longer conditioned by laws that had been rightly created to address the issues of tens of years ago, but that are no longer relevant nowadays.”
Following the enactment of the law in January next year, all rentals must be backed by a written contract.
The new law now vests responsibility in a beefed-up Rent Board to decide on all disputes pertaining to contracts of residential or commercial leases. However, disputes that are already ongoing will still be decided by the courts.
Over the years, Malta’s antiquated rent laws had become controversial since, as acknowledged by Dalli himself, they “were creating a social injustice” among landlords whose properties were rented out prior to 1995. The law protected lessees in guaranteeing tenure, prohibiting fair rises in rent, and placing the onus of responsibility for expensive repairs on the lessees.
The former social policy minister, Dolores Cristina, had twice presented rent reform papers to Cabinet, while Alternattiva Demokratika had waged a campaign calling for a referendum which never materialised, as the 30,000 signatures required were never collected.
As of January, upon a tenant’s death, there will only be a ‘one-time’ right to the continuation of a lease. This will be limited to siblings, natural or legal children, and parents of the deceased tenant, who would have lived in the property for at least four years before 1 June 2008, and continued to live with the tenant until his or her death.
Only siblings aged 45 years or older will be able to enjoy the right of inheritance of tenure.
By the time the new laws come into effect, means testing criteria will be drafted so as to establish whether heirs are in fact eligible to the right of leasem since “the one-time extension of the title of lease to a beneficiary is based on the principle of social justice... does not hold for beneficiaries – with the exception of the spouse – who have a high wealth or value.”
Occupants failing the means test will have a three-year grace period to either agree to new rental terms with the landlords, or find alternative accommodation. During this period, the value of the rent paid for the tenancy by the original tenant will double.
Occupants who do not classify for eligibility to inherit the title of lease will be subject to a five-year grace period, also at double the rent of what was originally being paid.
Lessors will have the right to retract the title of lease in case properties remain unused for 12 months or more, but this excludes “temporary absences on the basis of work, study and healthcare.”
Tenants who are certified or proven to be dependant on institutionalised care in a hospital or a residential house for the elderly will lose their title of lease – which is in turn either transferred the eligible one-time heir, or if there is no such beneficiary, the title reverts back to the landlord.
Unless otherwise agreed between the landlord and the tenant, the minimum rent value for homes rented prior to 1995 will be of €185 annually.
Landlords will also benefit from an automatic increase in rent every three years, against inflation indexes.
External ordinary maintenance of rented properties will become the sole responsibility of the tenant, and no longer the landlord. The lessors will however be responsible for structural repairs, including ceilings. Landlords will have the right to increase the value of rent by 6% if they are required to carry out such repairs.
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