Tenants denied rental housing because they are Maltese

Maltese tenants are finding it increasingly difficult to find rental accommodation due to their nationality, a MaltaToday investigation has found.
Several Maltese tenants have voiced their frustration with this newspaper at the fact that they are being refused accommodation simply because they are Maltese.

Among the most vocal was Aron, who shared his story with MaltaToday shortly after he started looking for a new place to live. Having lived in cities across Europe, Aron was forced to look for a new home after his landlord decided to knock down his block of flats and replace it with a boutique hotel.

As he started house hunting, Aron quickly realised that Malta’s rental prices are significantly higher than they were four years ago when he had found his current residence. But his biggest surprise was still to come. He noticed that his Maltese nationality seemed to be an issue for some landlords.

It is a story shared by other Maltese tenants, who spoke to us on condition of anonymity. Some were even told outright by potential landlords that they do not accept Maltese tenants.

While Aron was speaking with MaltaToday, he got a call from a real estate agent and took the opportunity to ask them why being Maltese was an issue for some landlords. He put the phone on speaker for the journalist to hear the conversation without the agent knowing.

The real estate agent, whose name is not being reproduced, explained that part of the reason could be that some Maltese people are simply bad tenants who don’t pay rent, which then makes it difficult for the landlord to kick them out. But another reason why non-Maltese tenants were preferred, according to the agent, is the fact that “landlords can do what they please with foreigners.”

The resistance to rent to Maltese tenants also has historical roots that go back to the post-war rental laws that made it impossible for landlords to remove tenants. Those laws were intended to offer housing protection at a time when the island was still recovering from wartime destruction. However, the legal regime remained in place for decades, with landlords unable to refuse the renewal of lease agreements, leaving them stuck with tenants for one generation after another. The regime also protected tenants since rents could not increase to reflect market value.

A legal amendment in 2009 set a higher cap for rental increases but failed to address the issue and the legacy of the post-war rental regime continued to be felt. Landlords were forced to go to court and successfully won constitutional cases in an attempt to seek redress. It was only in 2021 that the government enacted new laws that set conditions for pre-1995 protected rents that allowed landlords to receive a fair rental return while ensuring that current tenants remain protected. The government also introduced a mechanism by which it stepped in to foot the difference in rent that tenants have to pay.

But while this legacy is partly to blame for the reluctance of some landlords to rent to Maltese tenants, there is also a question of judicial efficiency.

Inefficient justice system

Landlords complain of an inefficient justice system when trying to evict bad tenants

Alliance Real Estate’s Chief Lettings Officer Paul Mifsud told MaltaToday that the reluctance also stems from inefficiencies in the justice system.

He explained that Maltese tenants who are in breach of their contract, whether by refusing to pay rent, causing damage to the property, or committing other violations, force owners to initiate lengthy judicial proceedings.

“During such proceedings, landlords are unable to rent out, use, sell, or otherwise exercise any of the full rights of ownership over the property until the judicial process is concluded. Apart from this, they are liable to cover court expenses and, in most cases, a large portion of the damages, unpaid bills, and other related costs,” Mifsud said.

On the other hand, he said that when landlords face abusive foreign tenants, they are more likely to vacate the property since Malta is not their main country of residence and they would not want to jeopardise their legal status when faced with court action for their wrongdoing.

While this still results in financial loss, it allows landlords to regain possession of their property more quickly, avoiding lengthy court battles that are often necessary when dealing with Maltese tenants.

Landlords have more control over foreign tenants

MaltaToday also spoke to James Paris, the director of Pelago, a small real estate agency.
Paris acknowledged that tenants are right to feel frustrated with landlords who refuse them simply because they are Maltese. Nonetheless, he said, these tenants still eventually end up finding accommodation.

Paris noted that similarly, some Indian nationals also face the same problem due to their nationality. He explained that a significant factor which makes landlords so picky is the fact that demand for housing is very high, and so they can afford to turn away some tenants in favour of others.

When asked why a landlord might opt for non-Maltese tenants, Paris says that there is a belief among some landlords that if Maltese tenants refuse to pay rent, they might end up squatting in the property. This, he noted, would then leave the owners with few options to reclaim their property.

Another reason some landlords prefer foreign tenants, Paris said, is that landlords have more control over them. In the case of third-country nationals, these workers need a fixed residence, among other requirements, if they are to live legally in Malta. This makes them more likely to comply with landlord demands.

Only 10% of tenants are Maltese

Most Maltese are home owners

A Housing Authority study last year found that only 10% of tenants living in rented accommodation are Maltese. This tallies with the high prevalence of home-ownership.

The study also showed that the average age of the tenant population stood at around 37 years with nine out of 10 tenants active in the labour market.

The study found that 97% of landlords are Maltese with those aged 50 and over managing two-thirds of residential rental stock.

The study also found that the median gross rental income for all landlords stood at €12,000. Four out of 10 landlords owned only one property and renting was a part-time endeavour for four out of five landlords.

Both landlords and tenants preferred a one-year contract duration, however, around a third of respondents favoured longer-term contracts—two and three-year contracts.

Another key finding of the study was that tenants were less knowledgeable about their legal rights than landlords. The study found that awareness about the Residential Leases Act was mixed but in general higher among landlords.