Despite the economic effects of the pandemic, Malta still boasts and enjoys a booming property market. The broad foreign base of working expats continues to supply an immense demand, especially for the leasing of residential or commercial tenements. In order to ensure that their property is consistently occupied and leased, many landlords place their property on the rental market. Naturally, with the increase in property available for rent, disputes between the landlords and the tenants are not few and far between. The interpretation of the lease agreement, the release of the rental deposit and damage inflicted on and within the property – are just a few examples of the disputes which commonly arise between the two parties. However, what is the adequate forum to effectively and efficiently solve these disputes? How can one expect to be fairly adjudicated on the merits of such disputes?

In 2019, Chapter 604 of the Laws of Malta was promulgated. This is commonly known as the “Private Residential Leases Act”. The law now requires all landlords to register their lease agreement with the Housing Authority. The raison d’etre of this clause is to safeguard abuse by either party to the tenancy agreement as well as to foster a controlled environment in which both the landlord and tenant are simultaneously protected in terms of the force of the lease and the consequences that may arise out of that agreement governing the parties. Amongst other obligations attributed to the lessor, the legislator’s main intention for this law was to formulate a specialised, sufficient and practical mode of solving disputes arising from the residential lease.

Furthermore, the law obliges the parties to include an inventory in the form of documentary

evidence, attesting to the condition of the tenement as well as the state of any furniture and domestic appliances supplied by the lessor at the start of the lease. This provides a guarantee and security to both the landlord and the tenant, that at the end of the lease, if any damages result or any items originally within the property, are missing, the lease contract contains a black on white list of the items inside the tenement and their original state at the commencement of the lease contract.

Interestingly, the law also provides for fair and just compensation in the event that the tenant does not adhere to the termination conditions of the lease contract by illegally occupying the tenement without a valid title at law, effectively, prohibiting the landlord from regaining possession of his property.

To limit the further burden on an already inundated Court, the Act also establishes an Adjudication Panel for Private Leases (the “Adjudicating Panel”) for the consideration and determination of “lesser” matters which do not require the intervention of the Court. This Adjudicating Panel has the competence to settle matters that relate to private residential leases and is limited in its jurisdiction as it is only authorised to deal with claims that do not exceed €5,000. The Adjudicating Panel consists of a chairperson and between two to four professionals who have experience in the legal or real estate sector. Claims to the Adjudicating Panel are made in writing and the defendant has ten days to reply to the claim brought against him. The procedural nature of cases before the Adjudicating Panel are similar to the standard procedure implemented before a court of law. Notably, to ensure the expediency of these proceedings and to reflect the versatile nature of the disputes at hand, the legislator has constrained the panel of adjudicators with regard to the time period in which they are obliged to deliver their judgment. Contrasted with the excessive prolongation of matters in court, this time-saving benefit has accordingly induced interested parties to avoid court proceedings for disputes related to a lease agreement altogether and has promoted the alternative option of settling such disputes in front of the Adjudicating Panel instead. The decision of the Adjudicating Panel is appealable on a point of law after twenty days from its decision to the Court of Appeal in its Inferior Jurisdiction.

The spirit of this legislation significantly embodies and promotes the “out-of-court” mentality that the legislator is evidently trying to foster – and this, together with the increased regularisation of what was previously an unmonitored and disorderly rental market. This has lead to a more efficient system which is forced to hasten the delivery of judgments to be able to solve disputes and effectively lay them to rest.