Data shows that the number of tenants in Malta has increased over the past few years. One of the main factors of this increase, is the noticeable growth of migration rates flowing towards Malta because of the booming economy. Naturally these factors have led to significant shifts in the rent market creating the need for a new regulatory framework which addresses the needs of the society we currently have.
The white paper sets the basis of the new regulatory framework, whilst striving to strike a balance between the rights of the landlord and the tenant. On one hand it ensures that the fundamental rights of landlords, their rights to property, and contractual freedom are respected, whilst on the other it also guarantees the stability and well-being of the tenants through the promotion of longer duration contracts minimising the uprooting of families.
This White Paper’s main objective is to address the rental agreements negotiated for a primary residential purpose, hence this will not cater for commercial or definite short-term agreements. However, it did put up an exception with regards to certain short-term agreements.
Thus, definite short-term agreements should also be allowed, by way of exception, in the sole cases of:
- Temporary workers who would be employed for a short period of time or only to perform a specific task,
- Students enrolled in tertiary and vocational education for a period of up to six months
- Residents who would need to rent alternative premises, but only for a temporary purpose (e.g. if works would be carried out on their main residence)
- Any other lease contracted for a temporary residential use, given that the tenant would not be ordinarily resident in Malta, or seeking to establish his ordinary residence therein.
(White Paper – Suq tal-Kera)
As a general rule, a standard minimum contractual duration of a number of years will be established, to render leases a much more stable tenure. This in turn will reduce pressure on families as impermanence can make it difficult to create a home especially for children. In addition, instability can be a major cause of mental health issues such as stress and anxiety, as there would always be the fear that there would be no renewal or a high increase in rent, risking homelessness. Through the increase of the duration in contracts, both sides would benefit as landlords in reality are after reliable tenants who pay rent punctually and maintain the rented units properly, whilst tenants would enjoy the stability they require.
The White Paper proposes that both the tenants and also the landlords have the right to withdraw from a contract of lease. In the tenant’s case, they have more discretion than landlords as they can withdraw unilaterally from a contract for whatever reason they want. However, with these amendments there was a new proviso added as apart from giving due notice to the landlord, they also need to wait for the minimum contractual period to lapse. This grants the landlord more rights that previously he didn’t have so that even they would have certain stability. On the other hand, the landlord also retains the right to terminate such lease in the specific cases mentioned below, provided that notice of termination is given to the tenant by not later than a specified period prior to the expiry of the agreement. Although this white paper favours the tenants with regard to stability and security it still protects the landlord’s interests in the following specific cases;
- If the landlord needs the property to reside in it himself or to allocate it to any relative, up to the second degree, for residential purposes;
- If the landlord intends to sell the property with vacant possession;
- In case the property needs to be demolished or substantial renovations, including the construction of additional floors, hence the eviction of the tenant would become necessary for the execution of these works.
In such cases, the landlord would be able to terminate the contract prematurely, provided that adequate notice is given.
This White Paper attempts to reach the promised balance between the tenants and landlords, however, the last hurdle which needs to be yet established are the periods of the minimum contractual obligations for long terms to classify under these regulations and the minimum amount of time the tenant needs to stay in the property before one can withdraw from such contract. These two determining factors will be pivotal on whether such balance is actually achieved.
This shall not be construed to be as advice but shall merely serve as a brief description of the White Paper on Rent. If you would like to discuss this further please do not hesitate to contact us on [email protected] .