Proposed rent law will need amending if MDA to support it, developers’ lobby boss says

The new proposed rent law will need to be amended if the developers’ association is to lend its support to it, developers’ lobby boss Sandro Chetcuti has said.

Chetcuti said that while the Malta Developers’ Association understood that the government had to act since certain people were suffering due to sky-high rent costs resulting from the property boom period of the past years, it should still never intervene when it came to the agreement made between a landlord and tenant.

He said that he hoped the rent Bill would be changed before it reached its third reading stage in Parliament, so that it would ensure that freedom of contract between the parties in the rent agreement is maintained.

Chetcuti, who was speaking during a conference of the MDA’s landlords’ section on Thursday evening, also lamented that the proposed law placed all properties in the category, without making any distinction between low- and high-end properties.

“I don’t think the Housing Authority should have put all private property, including high end villas and so on, in the same basket, in an attempt to control the property market, as it appears the new law is proposing,” he said, “We do not agree with this.”

“We should have a law which distinguishes between properties which are merely passable in terms of quality, and luxury properties which are finished to a high degree and where the landlord made an extra effort… but there is no distinction in this regard in the proposed law,” Chetcuti added.

He emphasised that he hoped that “a last effort to try to save the law” could be made before it is passed in Parliament."

The new rent laws, which still have to be approved in Parliament, would come into force in January 2020. They lay out that annual rental increases are capped at 5% and set a minimum residential lease term of one year. They also establish a system of tax credits for landlords who give long-term contracts, and make it obligatory for all rent contracts to be registered.

The new laws, however, do not apply to pre-1995 leases.

On this point, Chetcuti noted that both local and European courts had found the pre-1995 rent laws to be unconstitutional. He said that, to date, no government had worked to address this issue.

“To be fair, way back there was a crisis in the country and the government had a right to try to find a solution, such as using requisition orders and expropriation,” he said.

“But this only applies in a period of crisis. I don’t think we are in a crisis now. The economy is doing well, although there might not be the boom there was before, and things are calming down,” Chetcuti added.