[WATCH] Rent reform is fair and transparent, Social Housing minister says

Government’s proposed rent reform is a transparent and fair way of tackling the human rights breaches from the pre-1995 rent legislation, Roderick Galdes said.

Speaking on Xtra, the Social Housing Minister said the problem should be addressed with a long-term solution that creates a fair balance between tenants and landlords.

Under Maltese law, landlords whose property had been rented out prior to 1 June 1995 have no right to refuse renewal of the lease and have to make do with what is known as ‘fair rent’, with no way of raising rents to reflect market rates. Various court judgments have struck down this law as breaching the human rights of landlords.

Amendments introduced in 2009 failed to address the issue.

Galdes said there are 9,760 families affected by the matter.  

Under proposed amendments, landlords bound by the pre-1995 leases will be able to claim up to 2% of the property’s market value in rent. The reform will see the government absorb most of the additional rental costs for thousands of families are expected to face as a result of the change.

"We felt that it wouldn’t be right to kick out people who are old and cannot afford it, but we think owners should be given fair compensation," Galdes said.

“The €185 rental maximum introduced in the 2009 amendments did not reflect the properties’ value,” he said. "The 2% model proposed now is tried and tested, and we feel it gives a fair return."

He said government is being transparent with both landlords and tenants. "Those who deserve protection, will continue to get it, but those who do not cannot expect government to pay for their property."

Galdes hit out at the PN administration at the time for giving tenants false hope.

"Its useless to promise something and not deliver on it," he said.

The new law, he said, will give the magistrate the powers to order the rent price be changed, and to set the rent rate.

He said that elderly families and those with low-income will be allowed to stay. "We also have to take a humanitarian perspective."

Asked on the cost the government will have to shoulder, Galdes said that by the first year it will reach €1 million, going up to €4 million in the second year and €6 million in the third year.

"We now have to ensure there is enough stock of affordable rents so that people who have to vacate, have somewhere to live," he said.