Malta’s new law relating to residential property
The House of Representatives has recently approved of the Private Residential Leases Act, 2019 (also referred to as “the Act”). This article summarises key features of the Act.
The Act differentiates between a “short private residential lease” and a “long private residential lease”.
A “short private residential lease” means any lease negotiated for a duration of six months, and is applicable for the following lessees:
- non-resident workers employed, and non-resident students enrolled, for a period of less than six months;
- residents who need to rent an alternative primary residence for a period of less than six months;
- non-residents who need to rent a tenement for a period of less than six months, provided that they would not be seeking to establish their long residence in Malta.
A “long private residential lease” cannot have a duration of less than a year. Any agreement stipulating a shorter duration shall be deemed to have been agreed for a period of at least one year.
Implications for the lessor include:
- registration of the lease agreement with the Housing Authority within 10 days of the
commencement of the lease,
- payment of an administrative fee to the Housing Authority on registration of the lease
- acknowledgement of the number of persons residing at the property for the purpose of
calculating the correct tariff applicable for electricity and water supply,
- requirement to include clauses in the lease agreement that state: any amount deposited by
the lessee by way of security for performance of lessee’s obligations; and an inventory attesting to the condition of the tenement, furniture, and domestic appliances supplied by the lessor,
- requirement to send a registered letter to the lessee stating the lessor’s renewal intentions at least three months prior to the expiration of a long lease agreement, and at least one month prior to the expiration of a short lease agreement,
- weakening of Landlord’s property rights, such that the relevant legislation is amended to:
- “in cases of arbitrary or forced evictions of an occupant from the property which
the lessee occupies as his primary residence, including any unpermitted entry into the property, removal of furniture, appliances or personal belongings from the property, or the suspension or interruption of water and electricity services, in whichever manner, including the installation of devices which enable the owner to suspend the direct supply of water and electricity services to the property, the fine (multa) shall not be less than one thousand five hundred euro (€1,500) and not more than four thousand euro (€4,000)”
The Housing Authority’s new responsibilities include:
- role of registrar of residential lease agreements, including noting number of persons residing in each property at lease commencement,
- introduction of minimum standards of habitability,
- power to introduce and enforce safety and security standards in relation to tenements
which are let to more than one household, including rules limiting the number of persons that could occupy such a tenement at once.
Effects on the lessee include:
- the lessee may not withdraw from a long private residential lease before the lapse of:
- a) six (6) months, in the case where the lease is for a period of less than two (2) years; after such period, the lessee needs to give one month notice by registered letter;
- b) nine (9) months, in the case where the lease is for a period of two (2) years or more but less than three (3) years; after such period, the lessee needs to give two months notice by registered letter; or
- c) twelve (12) months, in the case where the lease is for a period of three (3) years or more; after such period, the lessee needs to give three month notice by registered letter,
- rent increases may only be undertaken once a year, and within specified parameters,
- the non-payment of the water and electricity bills during any period of the lease shall be
considered as a partial default and it shall entitle the lessor to demand the dissolution of the contract.