The owner of a primary property in Valletta’s commercial hub, put to limited use by the lessors enjoying its possession since 1964, was awarded €560,000 in damages for being denied full enjoyment of his property.
This was the umpteenth judgment by a local court declaring that the current laws, allowing landlords “limited enjoyment” of their property, effectively breached their fundamental rights in terms of Article 37 of the Constitution and Article 1 Protocol 1 of the European Convention.
The massive building, consisting of separate units with entrances on Merchants Street and St Paul’s Street, comprising basement and airspace, measuring 631 square metres at each storey, had been leased to the Caruana family back in 1964.
Its present-day owner, a member of the Apap Bologna Sceberras d’Amico Inguanez family, had inherited the property upon the demise of his aunt in 1981 and acknowledged the lessees who continued to pay an annual rent of Lm500 (€1164.69).
That sum was increased to €2,729.83 following legal amendments in 2009 that allowed such a measure and also laid down a termination date for pre-1995 leases, which made it possible for the owner to regain possession of his property in 2028.
However, those amendments did little to ease the disproportionate burden borne by such landlords who still endured “substantial limitations” to their rights.
In 2019, the landlord of the Valletta property finally refused to accept payment of rent and instituted proceedings in a bid to put an end to “this miserable situation”.
When delivering judgment on Friday, the First Hall, Civil Court in its constitutional jurisdiction observed that a court-appointed technical expert had inspected the property and reported that the lessees currently used a small part of the building to run their business.
The rest was in a rundown state, with little improvements made by its present occupants.
The large property in the primary town centre, with a passing trade and very good exposure, could fetch a selling price of €3.5 million, the architect said, with current rates of commercial rents standing at €340 per square metre.
Meanwhile, losses on rental income suffered by the landlord were estimated at almost €4 million.
The court also observed that the lessees, who used a small part of the property for their business, could have afforded a rent that better reflected the open market value.
The legal amendments did not sufficiently address the “disproportionate burden” shouldered by landlords, Mr Justice Lawrence Mintoff said.
Besides, the court failed to perceive the social purpose of such rent since the premises were used for commercial purposes rather than for social accommodation.
The lessees continued to enjoy protection even after Malta joined the EU and in spite of the introduction of laws regulating competition and state aid.
The rent did not reflect “the economic and social reality of the country,” said the judge, and it was very difficult for the landlord to regain possession of his property before 2028.
In light of all considerations, the applicant’s rights were breached and, therefore, he deserved compensation, concluded the court, awarding him €550,000 and a further €10,000 in non-pecuniary damages payable by the State, who was also to bear three-fourths of the legal costs.
The court further declared that the lessees could no longer rely on the present anti-constitutional laws to retain possession of the property.
A copy of final judgment was to be forwarded to the Speaker in Parliament.
The applicant was represented by lawyers Mark Attard Montalto and Douglas Aquilina.