Landlords awarded €23,000 over 1979 rent law legal quirk

A court has awarded €23,000 in compensation from the State to a property-owning couple who were precluded from taking back possession of a Birkirkara house due to a legal quirk

A court has awarded €23,000 in compensation from the State to a property-owning couple who were precluded from taking back possession of a Birkirkara house due to a legal quirk.

The Balzan family had owned the decontrolled property in Birkirkara since 1966 and had rented it out to third-country nationals, who were not protected against eviction under the law at the time. The tenants later became Maltese citizens and expected legal protection.

The plaintiffs had requested the courts order the tenants’ eviction in 2017, but the Rent Regulation Board had turned down this request in 2019, stating that the rent was still governed by the pre-1995 special rent laws.

The Balzan's argued that the introduction of Act XXIII of 1979 which gave tenants the right to continue to reside in leased properties with rents indexed to inflation – if the tenants were Maltese citizens - had radically changed their patrimonial rights. This change in the law had dispossessed them of the use of their property after the lease expired, leading to a forced landlord/tenant relationship for an indefinite period.

Court-appointed experts had valued the property at €370,000 with a rental value of between €959 and €1,020 per month – a far cry from the €375 per month the owners were receiving. The Balzans said the defendant had refused to sign a new lease agreement and had not paid rent for around 3 and a half years. The tenant had not been asked to vacate the property before because the plaintiff had felt sorry for him, the court was told.

The case was filed as the application of the 1979 law meant that once the defendants had become Maltese citizens, they could live in the property at a low rent fixed by law. They asked the court to declare that the situation they were in violated their right to the peaceful enjoyment of property under the Constitution and the European Convention on Human Rights.

The State Advocate had argued, amongst other things, that the State had the power to legislate and control the use of the private property to regulate social situations in the realm of the common good. The rent being paid was “fair rent” said the State lawyers, adding that the State “could not be held responsible for legislative shortcomings that might have taken place through the years.”

But the court presided by Mr. Justice Lawrence Mintoff, quoting at length from recent case law, held that the law had placed the landlords at a disadvantage when compared to the tenants.

It noted that the landlords had been obliged to carry the weight of a social burden alone for many years with no assistance from the State.

The Balzan's had been missing out on nearly €8,000 every year in rental income, observed the court, which blamed “inertia” on the part of the State in its failure to legislate in such a way as to reflect the socio-economic realities. 

Finding the state responsible for the breach of the couple’s rights, the court awarded them compensation.

The compensation awarded amounted to €20,000 after the court factored in the detail that initially and for a number of years, there wasn’t a large discrepancy between the rent paid and the market value. The court also liquidated €3,000 in moral damages to the couple.

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