The Government Lands Act – one year on | Mark Attard Montalto

A year has elapsed since the coming into force of the Government Lands Act on 25 April 2017; a law so relevant and fundamental to all property owners in Malta.

There are now four years left for persons to avail themselves of some of the rights at law as stipulated in this Act, and I am certain hundreds, if not thousands of citizens are still unaware of the repercussions that this law will have on their proprietary rights.

The important parts of the law featured in this article explain the rights and obligations of the public in general over property expropriated or administered by the government under whatsoever title – but not the part dealing with transfers of government properties to the private sector.

New acquisitions by the government can only be carried out in two forms (a) either by outright purchase, or (b) by title of possession and use not exceeding 10 years.

The government can only acquire property in these two manners. In particular, the government can no longer acquire property by title of public tenure, and any property currently held by the government on public tenure must (within a period of 10 years from when the Act came into force) either be acquired by absolute purchase or by possession and use, or must be released to the owner.

Contesting public purpose or compensation of new acquisitions

The Act states that: (i) “A person can contest the public purpose (and thereby challenge the expropriation itself) within 50 days from the publication of the Declaration as stipulated in the law.” and (ii) “a person can contest the compensation offered by the government within five years from the publication of the declaration as stipulated in the law”.

This is a significant change to the previous law because, although the new law increases the publication requirements imposed on the government and increases the time granted to individuals to contest the public purpose or compensation, it also does away with the formal notification requirements to the property owner by the Government. Therefore private individuals need to be aware and take cognizance of what is published in the Government Gazette and in local newspapers and act promptly when they become aware of information about their land.

Assessing compensation due

The new law has done away with a number of specific (and normally prejudicial) rules regarding valuation, and compensation (both for new and old declarations) is to be set at the open market value at the time of the Declaration as adjusted to take account of inflation.

For example, the rule setting the compensation due for conversion from possession and use to absolute purchase at one hundred times the annual acquisition rent (which translated into a miserable amount of compensation), no longer applies, and any such conversions are now to be carried out at market value.

Forfeiture of rights within five years from 25 April 2017

The law makes it amply clear in various sections of the law within the Act, that if one has proprietary claims against the government for acquisitions before the coming into force of the Act in April 2017, there is a peremptory period of five years (saving certain instances when this period is slightly longer) of which one year has already elapsed, within which one can bring a claim before the Lands Arbitration Board for compensation.

The remedies one can claim are different depending on the circumstances:

1) Government made a declaration but the property was never acquired and it was also not used for a period of over ten years: the owner may request revocation of the declaration (though the government may oppose this by showing valid reasons for the non-use and that the property is still required) as well as moral and material damages for the years of non-use.

2) Government made a declaration but never issued a notice to treat or indicated compensation offered: the owner may request compensation being the market value of the property at the date of the declaration as increased according to the index of inflation, material and moral damages caused by the delay in the acquisition, and interest at 8% on the value (as increased with inflation) from the date of the declaration.

3) Government made a declaration and issued a notice to treat, but has not as yet acquired: the owner may request compensation being the market value of the property at the date of the declaration (or, if he had failed to contest the government’s offer according to law, the value would be limited to the value that had been offered) as increased according to the index of inflation, material and moral damages caused by the delay in the acquisition, and interest at 8% on the value (as increased with inflation) from the date of the declaration.

These three actions are limited in that the owner must bring an action before the Lands Arbitration Board within 30 years from the date of the declaration or, if the declaration had been made before 25th April 1992, then by the 25th April 2022.

Where the government is occupying or administering land without ever issuing a declaration, owners may request either that such land be released free and unencumbered or that it be acquired, in which case the compensation due would be the market value as at the date when the case is opened before the Lands Arbitration Board and moral and material damages for the years of occupation. This action is also limited by a strict period of five years till the 25th April 2022.

Whilst these provisions tend to offer better compensation to owners than under the old law, in particular due to the valuation being based on market values and the introduction of moral and material damages, owners should be well aware of the strict deadlines which have been imposed and which are in course.

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Mark Attard Montalto is a lawyer at Saga Juris Advocates