By Celine Cuschieri Debono – Paralegal
Throughout the years, the legislator has sought to strike a balance between the rights of the landlord and dominus on the one hand, and the rights of the lessee and the emphyteuta on the other. Indeed, the past decades have seen different concessions being granted to emphyteuta. To mention a few, pre-1995 emphyteuses of 16 years or less were converted into a lease and were treated as a lease from that point onwards. Moreover, pre-1995 temporary emphyteuses exceeding 30 years could be converted into perpetual ones. Nowadays, a perpetual emphyteusis can also be redeemed.
The new Regulations under the Government Lands Act – L.N. 369 of 2020, L.N. 370 of 2020, and L.N. 372 of 2020 – build on the balanced approach that the legislator has taken in the past decades. They provide for new concessions to be enjoyed by an owner or emphyteuta of property transferred by the Government, the Lands Authority, or an Ecclesiastical Entity. This does not mean, however, that anyone who is an owner or emphyteuta of property transferred by the entities mentioned is eligible to these concessions. On the contrary, these Regulations provide for strict criteria which must be adhered to. Let us thus explore these new Regulations and the criteria found therein.
L.N. 369 of 2020
These Regulations regard the extension of temporary emphyteusis in a contract for commercial premises transferred from the Government, Lands Authority or Ecclesiastical Entities by title of emphyteusis. The logical first question here is, who may apply? The Regulations provide that any natural or legal person who holds a title of temporary emphyteusis transferred by any of the abovementioned entities for commercial purposes with a term that expires after the 31st of August 2025, may apply with the Lands Authority to rescind the original contract and be granted a new one. The new contract would provide a term that starts to run from the date of the new contract, which means that the clock is ‘reset’. When the term is greater than 65 years, however, it is reduced to 65 years.
Furthermore, for this concession to be granted the applicant must prove that he needs the land for a commercial project which will benefit the national economy and generate adequate employment. For the term of the temporary emphyteusis extended, the value of the new contract needs to be determined by an architect appointed by the Lands Authority. After such valuation is made, the applicant then pays this value to the Lands Authority.
L.N. 370 of 2020
This law applies to persons who have purchased through a public deed or granted through emphyteusis property by the Government, the Lands Authority or Ecclesiastical Entities. Such persons have the right to ask the Lands Authority to modify or remove conditions imposed in the original contract. This right, however, applies only where the condition/s imposed limit the amount of residences or garages that can be built, and where the applicant is precisely seeking to increase this number. The applicant needs to be a citizen of the European Union and be recognised by the Authority as the owner or emphyteuta of the land or building in question. In the case of emphyteusis, the applicant needs to prove that there are no overdue ground rent payments with respect to the property in question.
As was the case with case with L.N. 369 of 2020, the value for any modification or removal of such conditions shall be established by an architect appointed by the Authority, with regard being had to the site’s development potential. So, what exactly needs to be paid to the Authority? If the applicant wants to develop an additional residence/s for his linear descendants or ascendants to serve as their ordinary residence – 25% of the value of established by the architect. In any other case, he would need to pay the entire amount indicated by the architect.
L.N. 372 of 2020
When a person owns immovable property (as an ordinary residence or garage) which was transferred to him or her via a public contract by the Government, the Lands Authority or an Ecclesiastical Entity, and the description in this contract does not reflect his or her current situation, such person may apply to the Lands Authority for the necessary changes to this description. These Regulations apply to immovable property in front of or adjacent to the applicant’s ordinary residence or garage. The applicant needs to be a citizen of the European Union and be in effective possession of the immovable property for which he or she is requesting a correction in description. This possession must be recognised by the Lands Authority.
To show that the property is his ordinary residence, the applicant must hold an identity card registered on the said building for not less than three years before the application is filed, needs to be a citizen of Malta or the European Union, must have an original contract which provides that the building was granted for the purpose of residence, and must state by means of an affidavit that the building served as his ordinary residence for three years preceding his application.
Right to refuse application, cases of breach, and retroactive effect
There are certain elements which are common to all the Regulations discussed and bring to forefront the legislator’s intention behind these three laws. The first common element is the right to refuse the application which is at the discretion of the Lands Authority which must be in writing stating the reasons for refusal. Secondly, the Authority has a right of action against any person involved before the First Hall of the Civil Court which applies even if the new contracts have already been signed. This carries with it important implications since this right of action does not only concern the applicant himself or herself but ‘any person involved’. Finally, all three laws have retroactive effect which means that they apply to contracts entered into before the new Regulations came into being. When this retroactive effect is coupled with the number requirements which the applicant needs to meet, one perceives an intention on the part of the legislator to strike a balance between providing the benefit but at the same time preventing its abuse.
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Disclaimer: This article is not to be considered as legal advice, and is not to be acted on as such. Should you require further information or legal assistance, please do not hesitate to contact us on info@abalegal.eu.