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Of all the amazing stories coming my way in the course of the Rent Referendum Campaign nothing can beat the one in which a court-appointed expert admitted that it was impossible to fulfil his commission in terms of law. Not even his magnificent imagination could cope with what the law demanded.
The case was brought by a prominent bank against the landlord of one of its branches.
Having given up pleading with the bank to come to terms about raising the rent from the pittance of Lm50 per year it currently pays, the landlord had finally demanded Lm5,500 in rent. The bank sued before the Rent Regulation Board pleading that the demand was not legitimate. Ironically the landlord pleaded that the Board had no jurisdiction because a bank was not one of the tenants specifically protected by the law.
The court disagreed with both and appointed two experts to come to a valuation of the rent due in terms of law. One of the architects reported to the court in a missive that will long be remembered as a monument of Maltese legal literature. He points out that in terms of current laws he is required to deal with the fiction that the bank in its present condition existed in 1914, regardless of the fact that its occupancy of the premises only dates back to 1956, to assess what the rent at that would have been at the start of WWI and to allow a maximum raise in the rent of 40 per cent.
This he compares to the exercise of calculating what it would have cost 16th century Florentines to build Leonardo’s helicopter, presumably if they had had the benefit of the internal combustion engine. He honestly admits defeat in the face of this impossible challenge. Nobody could venture a guess what an aluminium soffit would cost in 1914 Malta if such accoutrements were in vogue at the time, much less what a computer system would have cost if it had existed at all. This being a commercial premises, the yardstick is 1914 not merely 1939.
Instead he restricted himself to assessing the value of the bare structure allotting it a rent of 10c per annum in 1914 multiplied by 10,000 to come to today’s value in money then divide it by 0.4 to stick to the law’s prescription on maximum increase. It worked out at Lm3,500 per annum.
The case is still sub judice and it is up to the court to decide whether or not to accept the expert’s imaginative rendering of the law. A decision is awaited with bated breath and not only by the parties directly involved. It would seem like Leonardo’s helicopter coming in to land at Luqa.
Meanwhile, far from the ponderings of any court, the rent referendum campaign has provoked one landlord to calculate revenue and expenditure for a property rented since 1939 at Lm9 per annum. While the property earned the magnificent sum of Lm495 in the course of 66 years, the landlord’s family paid succession duty on five separate occasions in the meantime. Total tax Lm635. The cherry on top was the expense of Lm75 in repairing drain pipes leaving the balance at a net loss of Lm215 for the gift of providing a home to a family for generations. Other owners would consider him lucky not to have had to replace a roof in the meantime.
Granted that the loss could be reduced if one factored in the real value of money over time, it still works out as an insanity. What has not yet been worked out is the opportunity cost. Taking the example of this Lm9 per year property as a representative of the Lm510 million worth of controlled rent properties, one can imagine on the Leonardo helicopter principle, that it cost around Lm2,000 to build in 1939. Untouched in a very fixed account at the bank for 66 years at compound interest it would have grown in geometric progression with absolutely no deduction for sewer repairs. I await a banker’s number crunching to satisfy our curiosity unless our delightful architect would care to try his hand. No elected politician would dare.
Opportunity cost would become astronomic by any other rational method. If our landlord’s progenitor had not believed in the financial solidity of bricks and preferred business, his Lm2,000 prudently invested at the rate of GDP growth in the last 66 years would now provide his issue with a significant legacy. Had he been allowed to participate in the property boom which has lasted, with barely time to catch its breath, almost uninterruptedly for the last 40 years or so, his legacy would make of our dispossessed landlord something like a millionaire.
Such is the gratitude of the state in Malta to those who invested their surplus in housing for others prior to 1939. They could have whisked their money abroad, they could have gambled it or squandered it on wine, women and song. Nobody would have interfered or called them names for being landlords. Nobody would have mugged them and left them unprotected by any law at all for 60 long years. They invested in Malta. Tough.
After all this time they are told that the government is studying the situation. Spending hours making minutes, holding meetings to devise new ways of cheating, they suspect. They have seen every possible legal contortion and received every possible slap in the face already.
The tale of the lady who offered her rented house to her tenant at Lm4,000 only to be rebuffed because he is comfortable paying Lm17 per annum has already been told. She wants to sell off at a give-away price to collect a small sum to help her daughter pay part of her home loan and live decently. My account of it has stirred another lady to step in with an offer to buy the house. It is genuine offer although I would advise my landlady to wait until the referendum is fought and won. She is welcome to contact me again if she is interested. I have no compunction about giving her idiot tenant a hard time, he deserves every instant of it.
On Wednesday the Greens announced their drafting of a Bill to end the inheritance of leases. Every MP was invited to make it his or her own Private Member’s Bill. Nobody expects them to fall over one another to end this glaring injustice. It is political pressure, a call for every representative of the people to stand up and be counted. I doubt that we will have any trouble over the arithmetic.
It is just another revealing acid test of the quality of our politicians. We will be proposing other piecemeal amendments to the law affecting the issue of rent reform, testing our political structure to its limits. Some of our politicians had wanted the Greens to be a pressure group. They will have all the pressure they want: political pressure, the stuff that turns drips into squirts and lets everybody know what stuff they are made of.
Rent reform is at hand whether they like it or not. The 30,000 signatures for the referendum petition will be collected, and the referendum will be held unless our elected politicians get off their hands before. Signatures and donations to the campaign are pouring in, a steady stream of people putting their name to a change for the better whether they are landlords or not, an accumulation of widow’s mites in small contributions to the campaign for justice to be done at long last.
Dr Vassallo is Chairperson of Alternattiva Demokratika – The Green Party
www.alternattiva.org.mt
hcvassallo@kemmunet.net.mt
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