Agricultural lease threat: Landmark judgment could open floodgates for owners

Maltese farmers are facing an imminent threat after a Constitutional Court ruled that the law which grants tenants of agricultural leases an indefinite right of renewal, breaches the owners’ fundamental rights.

The landmark judgment confirms a lower court judgment declaring that the Agricultural Leases (Reletting) Act breached owners’ rights to the enjoyment of property.

This judgement, the first to vindicate owners of agricultural land worth millions, leased to third parties at a paltry rent, is expected to open the floodgates to many more cases on similar merits.

The case concerned a 5,000sq.m parcel of land and farmhouse, in Zabbar, acquired in 1982 by J & C Properties, along with another four properties, for Lm26,000 then. The land was leased to Nazzareno Pulis, at an annual rent of €58.23, remaining so leased until today.

The owners filed a claim that their rights were being breached because they were not being afforded adequate compensation. The first court had upheld that claim, awarding the company €100,000 in damages.

The State Advocate appealed but the Constitutional Court rejected the arguments put forward, save for that concerning the awarded damages, effectively slashing the sum to €22,000.

While such restrictions on ownership rights had been intended for “social purposes”, the Court asked whether the owner was receiving adequate and proportionate compensation. Under the current regime, the owner could only claim back his land for farming purposes or to develop the site, save for other instances where shortcomings were proved on the part of the lessee.

This meant that if the owner did not intend to farm the land or lacked the capital to develop it, he could not claim his property back, unless the lessee agreed in writing to the termination of the lease.

The Court therefore ruled that the lessees could no longer avail themselves of the law to renew the lease. Whether any eviction follows, will fall within the competence of the ordinary courts,

The court also said that it had not been proved that the property was irrigated land. This meant that the land could be acquired for development purposes and the potential developer could proceed to evict the tenants.

It also said that the rental losses between 1982 and 2018, as calculated by the technical expert, were not “so realistic”, reducing the damages to €22,000.

Lawyers Edward Debono and Karl Micallef represented the applicants.