Pre-1995 leases have always been a subject of heated controversy since these provided an advantage to the lessee, who was granted extensive protection by the Reletting of Urban Property (Regulation) Ordinance (hereinafter to be referred to as “Chapter 69”). Article 3 of this Ordinance provides that;
“It shall not be lawful for the lessor of any premises… to refuse the renewal of the lease or to raise the rent or impose new conditions for the renewal of the lease without the permission of the Board”
Hence, the lessor may not terminate any lease agreement or change any of its conditions unless due authorisation is granted by the Rent Regulation Board.
Act X of 2009 attempted to strike a balance between the rights of both parties, for the first time in more than a decade the lessor was granted the possibility to receive a higher rent, whilst protecting the lessee from the risk of homelessness.
This Act is over time gradually phasing out all pre-1995 leases. Garages and summer residences which do not serve as ordinary residence have not been automatically renewed since June 2010[1], and commercial tenements will no longer enjoy automatic renewal after the 31st of May 2028.[2] Dwelling tenements have no end date, but there is a new definition of ‘tenant‘, restricting automatic renewal and continuation of the lease by different persons as per article 3 of the Ordinance.
It is clear that even though there are various grounds for non-renewal, even following the 2009 amendments, the burden of proof is too great on the lessor to make such grounds effective. In the case of Anthony Debono et v l-Avukat Generali et[3], which to date is still not a res judicata, it was held that the rent was too low compared to its market value and the chance for the landlord to regain possession of the house was difficult. Moreover, the court, in this case, declared this law unconstitutional, as the State is considered to have failed to safeguard the owner’s rights. Furthermore, the ECHR judgement of Cassar v Malta[4], which reasoning was followed by Mr Justice Lawrence Mintoff, declared article 3 of Chapter 69 to be in breach of Article 14 in conjunction with Article 1 of Protocol No. 1 to the Human Rights Convention.
This shall not be construed to be as advice but shall merely serve as a brief description of the pre-1995 leases. If you would like to get to know more about this please do not hesitate to contact us on [email protected].
[1] Article 1531H, Civil Code, Chapter 16 of the laws of Malta.
[2] Article 1531I, Civil Code.
[3] Anthony Debono and Simone Dimech v l-Avukat Generali et (Civil First Hall, 8th May 2019)
[4] Cassar C. Malta, ECHR (Application No. 50570/13 ), 30th January 2018