by Senior Associate – Dr Carlos Bugeja
Yesterday, Parliament approved the new Private Residential Leases Act, 2019, providing for new laws regulating lease, and formally described as an Act “.. to promote the development of the private rented sector by ensuring standards of fairness, clarity and predictability incontractual relations between lessors and lessees and to safeguardand protect the right to adequate accommodation and to make provision with respect to matters ancillary thereto or connected therewith.”
There is a lot to say about this new law, but these are the salient changes:
– Parliament approved the law yesterday, but it will be up to the Minister to decide when it comes into force (possibly, 1 January 2020). So far, the law remains as it was.
– This law does not regulate pre-1995 leases. Also, leases which were granted after the 1st June, 1995, and which are still in force on the day of the entry into force of the Act shall largely continue to be regulated exclusively by the provisions ofthe Civil Code. There are exceptions.
– This law speaks about long and short rents, but excludes rent services such as AirBnB.
– All new and renewed leases will have to be registered with the Housing Authority.
– All private residential lease contracts made after the entry into force of the Act shall be made in writing; and the law provides for a number of requirements which need to be included.
– The law also provides for a number of forbidden clauses, that is, conditions of contract that, if included, are to no effect for the purpose of the law.
– A long private residential lease cannot have a duration of less than one (1) year. Any agreement stipulating a shorter duration shall be deemed to have been agreed for a period of at least one (1) year. The Lessor is also bound to provided that the lessor give notice of termination to the lessee at least three (3) months before by registered letter. If the lessor does not give such notice, the lease is automatically renewed.
– Rent increases may only take place once every year and only up to a maximum of 5% increase on the previous year. In the absence of any express agreement, the rent cannot be revised during the term of the lease.
– The Housing Authority shall be the formal state rent regulator. It will monitor leases in Malta, and shall even have the right to enter into properties, provided it has a warrant to do so, signed by the Minister.
– Anyone in breach of this Act shall be guilty of an offence against the Act and shall be liable, on conviction, to a fine (multa) of not less than two thousand and five hundred euro (€2,500) and not exceeding ten thousand euro (€10,000).
– The law establishes an Adjudicating Panel for private residential leases, which shall have exclusive jurisdiction to decide disputes relating to private residential leases to which the Actapplies , in so far as the claim does not exceed the value of five thousand euro (€5,000).
This is not an exhaustive list. There will be much to be discussed, analysed, and debated. But these are – as one law lecturer famously used to say – pleasures yet to come!
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 Dr Carlos Bugeja on carlos@abalegal.eu.