Updated 6.04pm with PN reply
The Nationalist Party's proposal on pre-1995 leases will cut down financial aid to the most vulnerable people, eventually forcing them out of their homes, according to Housing Minister Roderick Galdes and EU funds parliamentary secretary Stefan Zrinzo Azzopardi.
In a news conference on Tuesday afternoon, the two Labour candidates and cabinet members said the PN's vision will endanger 10,000 families who currently live on such leasing agreements.
Labour was referring to proposal number 22 in the PN electoral manifesto, which pledges that a new PN government would retain the current state-aided lease, tapered on a span of three years until tenants adjust to the new lease.
"After a Labour Government provided the much needed financial help to these families and their landlords, Bernard Grech wants to dismantle the reform, by dwindling down government aid to nothing within three years," Minister Roderick Galdes argued.
"With this proposal, Bernard Grech will be driving vulnerable and elderly people out of their homes."
The PN replied by rubbishing Labour's claims and saying they were lying about the party's plans (see below).
What is the problem with pre-1995 leases?
Last year, the government implemented a reform that saw rent on leases dating back to before June 1, 1995 rising up to two per cent of the value of the property. The state has pledged to absorb most of the additional rental costs that thousands of families were expected to face as a result of the change.
Pensioners and social welfare beneficiaries in housing bound by pre-1995 leases now have their rental costs covered in full by the state up to a maximum of €10,000 per year, per family.
But up till last year, under Maltese law, the landlords had no right to refuse renewal of the lease and had to make do with what is known as ‘fair rent’, with no way of raising rents to reflect market rates.
Some of the 'old' fixed rates were as low as €200 per year for a sizable townhouse, for instance.
Legal amendments introduced in 2009 failed to satisfactorily resolve the issue, and the lease law has been successfully challenged in local courts as well as the European Court of Human Rights.
But despite multiple judgements finding in landlords’ favour and awarding them compensation, the government had previously been reluctant to revise the law effectively, fearing that thousands of families risked being made homeless if they were to be forced to pay market rates for their homes.
"If Bernard Grech is trusted with the country's leadership, we would be risking all the achievements of the past years," Zrinzo Azzopardi insisted.
"We must be cautious not to allow the problems of division within the PN to become the problems of our country."
PN hits back
In a reply, the PN said that the Labour Party was being totally misleading and lying about its proposal.
The plan, the PN said, was to provide some aid to anyone who does not qualify for a subsidy and has income under €40,000 annually.
People caught in this bracket have been left high and dry by the government reform, the party said. This proposal would change that and would come over-and-above the current scheme.