The rent laws in Malta dissect Maltese tenants into two categories: those who contracted their lease prior to 1995 and those who signed their lease contract after 1995. Contracts entered into after 1995 are regulated by the Civil Code, the ordinary civil law of the land, whereas tenants whose commencement of lease dates back before 1995 are regulated by the ‘Special Laws’, in this case, Chapter 69 of the Laws of Malta.
These special laws were primarily promulgated to protect the tenant from eviction and from arbitrary increase of the yearly rent. Chapter 69 extends such protection. It practically freezes the annual rent payable by the tenant and limits the landlord’s power of negotiation with his tenant and his power to evict.
Chapter 69 of the Laws of Malta applies both to dwelling houses and to shops. It defines a tenant as extending to his or her husband or wife and also to family members residing with the tenant at the moment of his death if such tenant had no husband or wife.
According to this special law, it is unlawful for the lessor, or the landlord, to refuse to renew a contract of lease which terminates or expires. This law also states that the lessor, upon such expiration, cannot raise the rent or impose new conditions.
Situations and circumstances involving these protected leases are generally regulated by the Rent Regulation Board. This Board, which has the composition and function of a tribunal or a court of law, is empowered to grant permission of eviction or to increase the rent in very specified cases dictated by this special law. However, this power is also quite limited. The Rent Regulation Board can grant increase in rent if certain works to the property must be carried out, or if the rent does not exceed 40% of the fair rent. This fair rent is fixed by means of a valuation of the premises based on the rent at which such premises could have been leased ‘at any time prior to the 4th of August 1914’. The fair rent is thus based on what the premises would have leased for more than 80 years ago!
In Malta, many townhouses, found especially in the core of the villages, and which have been leased for over twenty years, are rented for Lm20 Eu46.59) per annum, Lm25 (Eu58.23) per annum and even Lm6 (Eu13.98) per annum! This special law also states that where the proposed increase in rent is to exceed Lm40 (Eu93.17) per annum, the landlord must give notice to the lessee by means of a judicial letter and the tenant has the right to contest it before the tribunal.
The state of many of these leased dwellings is piteous, to say the least. Landlords refuse to carry out and pay for any extraordinary or even maintenance works arguing that the rent would not cover a speckle of the payment for the works required. Tenants argue that they are not the owners and that it is not their responsibility to pay for such works.
In what circumstances is a landlord lawfully permitted to evict his tenant?
Chapter 69 of the Laws of Malta states that the Rent Regulation Board may grant permission to the landlord to evict the tenant if the latter fails to pay the rent twice consecutively. However, even if the tenant fails to pay, unless the landlord files a court application wherein he demands payment within 15 days, such failure to pay will not hold any water before the tribunal. Thus, the tenant must fail to pay in two consecutive instances and in both these two instances the landlord must have filed two court applications before the tribunal.
Another instance in which the Board may permit a landlord to evict the tenant is when the tenant requires the property for his own occupation or that of his ascendants or descendants. In this case, the Board must be satisfied that the tenant has alternative accommodation which is reasonably suitable to the means of the tenant.
The protection of these rent laws was halted by means of the promulgation of Chapter 158 of the laws of Malta which states that such protection will no longer be granted to lease contracts entered into after 1995. However, although the new leases being contracted presently give equal rights to tenants and landlords, the old rent laws still apply to the majority of leases in Malta. The majority of leases in Malta are very old leases, inherited from one generation to the other and thus the effects of such leases are still very much alive and very much felt. As a consequence, certain heritage town houses which could be restored to their old splendour, have been neglected and abandoned for many many years and there does not seem to be any solution to this problem unless the rights of both the tenants and the landlords are safeguarded.