Court cannot attack new rules for means-testing tenants in rent-controlled houses

Tenants in rent-controlled properties have won a new layer of protection with new means-testing rules that can prolong cases for eviction.

A court decision has revealed how landlords with a favourable judgment of the court of constitutional jurisdiction, to evict tenants from rent-controlled properties, cannot proceed with an eviction if the Rent Regulation Board does not means-test the occupants.

The Court of Appeal, in a judgement on an eviction case by the Rent Regulation Board, said it was unable to make a constitution review of the law.

The judgment in the case of Robert Galea against Major John ‘Vanni’ Ganado revolved around an article in the 1979 Housing (Decontrol) Ordinance, the law which converted temporary emphyteutical leases into controlled rents.

That law effectively sought to transform hundreds of private individuals into social housing providers by compelling them to keep renting out their properties at a low rent, with no remedy at law for just compensation.

But law has been repeatedly rejected at European level as a breach of the right to property  found both in the Constitution and the European Convention of Human Rights.

Last year Malta tried to address the problem subjecting tenants to a means test so that they would have the right to continue occupying the property, for a rent of not more than the equivalent of 2% of the market value of the property, part of which would be paid by the State. This law applies to new cases, as well as those who have already been subject to a decision of court of constitutional jurisdiction.

In the case under appeal, Galea owned a property which was subject to a protected lease. He sought to challenge the legality of the Housing (Decontrol) Ordinance in a civil court. This was at a time when the 2018 law to means-test tenants had not yet been introduced.

In its judgment, that court once again declared article 12 of the Housing (Decontrol) Ordinance to be in breach of the right to property, and stated that the Ganado tenants could no longer use this article to justify their continued occupation of the property.

Galea then requested the Rent Regulation Board to evict the tenants. The Rent Regulation Board upheld the request, but the defendants appealed, stating that in the meantime, the means-testing rules had come into force, and the that the Rent Regulation Board should have applied the new law.

In its judgment on the case, the Court of Appeal presided by Mr. Justice Anthony Ellul, noted how effectively, the newly introduced mechanism stated that even a landlord who had a favourable judgment of the court of constitutional jurisdiction, making his tenant’s eviction possible, could not proceed to request the eviction of the occupier without first availing himself of the procedure under the new law.

The Court of Appeal expressed its reservations on this new law, which it said added yet another layer of frustration for property owners, but noted that as a court of appeal in its ordinary jurisdiction, it lacked competence to actually decide about the constitutionality of the new law and could not order a constitutional reference on the matter of its own accord.

The judge therefore varied the judgment of the Rent Regulation Board by revoking the parts which ordered the eviction, but also opted to send back the acts of the case to the Rent Regulation Board to give chance to the plaintiff to decide on his next step.