Council of Europe demands to know next steps for Malta’s fragile rent law

The monitoring committee is responsible to enforce rulings by the European Court of Human Rights, and Maltese rent laws are the subject of three separate rulings.

The government intends extending a general reform of rental laws to the unilateral leases created in 1979, which converted temporary leases into permanent rental contracts – but the details remain sketchy at best.

The proposed amendments have already been delayed by a year, a report by the Council of Europe’s monitoring committee has revealed.

The monitoring committee is responsible to enforce rulings by the European Court of Human Rights, and Maltese rent laws are the subject of three separate rulings.

The most contentious is the Amato Gauci case, where the European Court effectively found that a law that forcibly turns temporary leases into a permanent rental contract, was against property owners’ fundamental rights.

The ECHR had found a disproportionate burden was imposed on property owners by the Housing (Decontrol) Ordinance, which from 1979 subjected them to a landlord-tenant relationship without their consent: upon expiry, temporary leases were turned into permanent rental contracts and annual rents only doubled in value every 15 years.

Since then, the Maltese courts have been flooded with claims for damages from the government by property owners.

Tenants, on the other hand, live in fear of eviction because of the unconstitutionality of the Housing (Decontrol) Ordinance – which however stays in place.

And this is the sticking point for both the government and people living in rent-controlled properties.

The government has been tight-lipped about its plans to address the growing number of landlords clamouring for the return of their properties.

The monitoring committee’s assessment hints that the government will address the controlled rents that are way below market value – and that will mean a gradual increase in rents that can be as low as €100 a year… having doubled in value only once since they were ‘frozen’ in 1979.

But tenants who first took control of their properties in the 1970s are today pensioners, and they fear they will not afford market rates of €500 a month in rent if the law changes.

Justice minister Owen Bonnici has in the past told parliament that a social impact assessment was being carried out on the proposed legal changes that will be “striking a balance between the social impact [on tenants] and landlords’ rights.”

On its part, the Council of Europe committee has demanded further information as to “what procedural safeguards are envisaged” to provide property owners with a remedy to challenge both the amount of rent fixed and the actual tenancy – “either on the basis of their own need or that of their relatives, or on the basis that the tenants were not deserving of such protection because they owned alternative accommodation”.

“There is a lack of clarity on the content and the scope… of those reforms and how they will benefit property owners, such as the applicants in these cases, whose properties continue to be the subject of imposed tenancies. 

“Further information is required on effective domestic remedies and the procedural safeguards in place for these property owners in particular as repetitive cases are pending before the European Court.”

 

Tenants trying to fight back

Tenants living in rent-controlled properties have no option but to wait for the Maltese government to legislate a compromise for them to retain their tenancies.

The Maltese courts are now clearing more cases in favour of landlords claiming a breach of their right to enjoy their property.

The Mifsud family is one group of tenants that is fighting back in an appeal that argues that they should not be made to pay for the errors of the Maltese government. Their lawyers, Patrick Valentino, Jason Azzopardi (MP) and Kris Busietta are arguing that tenants should not have to be evicted for the fact that it was the Maltese state that never updated rent laws to create a fair balance between tenants and owners. 

According to the Code of Organisation and Civil Procedure, court decisions that declare a law to be unconstitutional or that breaches a fundamental right, must be delivered to the Speaker of the House and tabled in the House of Representatives; and that within six months the Prime Minister must see that the unconstitutional law is amended.

Lawyers for the Mifsud family argue that they risk a precarious livelihood if evicted because of the unconstitutionality of the law – and the government’s inaction to legislate a new law. They say the court should decide whether the landlords should be accorded a fairer rent – rather than uphold the first court’s decision that could lead to the tenants’ eviction.

“The tenants cannot be expected to be forced to carry the burden of others and make good for the shortcomings of the State,” the Mifsuds’ lawyers argued. “The State first created a legitimate expectation that they could remain in their house under a rental title, and because those rental conditions were not updated the courts now claim they should answer for the breach of the owners’ rights.”