The Fenech & Fenech Property Law Conference was held on the 5 November 2018 at The Malta Chamber of Commerce, Enterprise and Industry. In this video, the English translation of which can be found below, Dr Edward DeBono gives an introduction to Maltese Rent Laws as well as to the recently published White Paper on the Rental Market.
The White Paper launched by Parliamentary Secretary Roderick Galdes on the 15 October 2018 deals with the property rental market. It is the prelude to the last act of voluminous legislation regarding rentals.
Before 1939, the rental market was regulated by the Civil Code and therefore the legislation allowed for a free market with respect to conditions for rentals of both commercial as well as residential properties.
This White Paper is limited to residential property. Before 1939 there was the liberty to contract according to the parties’ wishes. Because of the Emergency powers of 1939, Chapter 69 of the laws of Malta came into force with the legislator at the time giving the right of relocation to the tenants in the properties. This legislation totally restricted the owners in the manner they could dispose of their properties, since the Property Board could eventually lower the rental from that agreed to by the parties to what was due in 1914. Naturally, owners did not invest in these properties and in 1958 the colonial government introduced the Decontrol Ordinance such that properties that were being built in that period would not be subject to the Reletting Ordinance of 1939.
In time, and specifically because of Act 23 of 1979, the government of the time once more limited the rights of property owners and once more protected emphyteuta and tenants. In 1995 we had a partial liberalisation and rentals after 1 June 1995 were no longer limited by any legislation or obligation of reletting.
Furthermore, with Act 10 of 2009 which came into force on 1 January 2010, the old rentals that were protected by the 1939 Ordinance were allowed gradual increases to their rental prices.
The situation today sees new legislation in 2018 through which, despite decisions by the Constitutional Court, emphyteusis and rentals are once more protected such that owners cannot end residential tenancies.
Today we have this White Paper which aims to find a balance between the rights of owners and tenants and to protect tenants. It is proposing two things: to grant parties the liberty to agree on the period of the rental; or to allow more protection to the tenant with more fiscal advantages for the owner.
At the same time this White Paper is proposing that should the owner need the property for a family member, or temporarily for a relative, or for development of same property into a complex s/he will be able to terminate the agreement with the tenant.
I do not believe this scenario favours the right to contract since it is the contract that should determine the relationship between owner and tenant. Whether this White Paper will achieve its aims remains to be seen but it is clear that it is attempting to achieve social justice for both the owners and the tenants, by protecting their rights.