Human rights breaches caused by the old rent laws have cost the exchequer another €300,000, after a court ruled that the owners of two properties had been denied the right to the enjoyment of their estate.

In one case, the owners of a house in Cospicua will receive €205,000 by way of compensation while the owners of a property in Valletta were awarded €84,000 in damages.

The decisions were handed down in two court cases instituted by the owners who claimed the old rent laws prevented them from enjoying their properties to the full.

The owners of a house in Triq Melchiorre Gafà, Cospicua, which has been rented out since the late 1930s, said they received a paltry €203 annually for the rental.

They argued an excessive burden had been placed on them by the low rent, the uncertainty about whether they could repossess their property, the lack of procedural safeguards, the increase in the standard of living in Malta in recent decades and the disproportionate interference in the rights of the owner.

A court expert valued the property at €1.2 million and the rental value at about €60,000 a year.

Madam Justice Anna Felice said that as a result of the 1979 rent laws, the owners were indefinitely subjected to a forced landlord-tenant relationship.

The European Court of Human Rights has already handed down several decisions on this issue, saying that “a disproportionate and excessive burden” was imposed on the applicants and that the Maltese state “failed to strike the requisite fair balance between the general interests of the community and the protection of the applicant’s right of property”.

The judge ordered the state advocate to compensate the owners €200,000 and €5,000 in moral damages.

A flat in this Melita Street block was rented out in 1952 for 20 years. Photo: Chris Sant Fournier

The other case was over an apartment in Melita Street, Valletta. It was rented out in 1952 for 20 years. However, the tenants refused to leave because the property had become their residence and they were protected at law.

A court expert valued the property at €590,000 and the rental value was around €11,400 annually. It was a one-bedroomed apartment, which could be converted into two bedrooms, and had impressive views of the Valletta skyline, the coast and Tigné Point in Sliema. The tenants were paying €493.83 a year in rent.

Mr Justice Franco Depasquale said it would be in the best interests of justice and the parties if there were a “clear and simple rule” for the court to determine the compensation. This would be the equivalent of 50 per cent of the average rental value throughout the period in which the owners were deprived of their property.

“The court considers that such clarity and simplicity in the rule of application of compensation shall be of assistance to the parties for an indication of fair compensation before the start of proceedings. This could lead to a reduction in constitutional lawsuits for compensation that were filed in court,” he said.

Half the average rent amounted to €71,350 while compensation for moral damages was fixed at €500 for each of the 25 years that the owners sustained a breach to their rights, amounting to €12,500.

The court could not order the eviction but ruled the current tenants could no longer be protected by the Reletting of Urban Property (Regulation) Ordinance so that the property owners would not continue to suffer breaches to their human rights.