The Constitutional Court has confirmed that the current legal regime protecting tenants in pre-1995 leases, breaches landlords’ property rights, and the legislator “dragged his feet” in addressing the injustice.

“There is no doubt that under the current law, the balancing of the rights of landlords and tenants, is still a long way off,” said the court, when delivering final judgment in a case instituted by the Grima family against the attorney general and Lawrence Aquilina, a long-standing tenant.

“The failure of the state to provide for those truly needy tenants, whilst addressing the injustice faced by long-suffering landlords of pre-June 1995 leases, was causing unnecessary hardship to all those concerned,” observed the court.

The dispute revolved around a Zebbuġ property leased by the Grima family predecessors back in March 1950, to Aquilina's parents who had lived there with their son until their death in 2014.

Lawrence Aquilina, now 65, had taken over the lease, paying “a miserable annual rent of €197.58” when the estimated market value of the rent in 2014 stood at around €9,625 per annum.

In October 2019, the First Hall, Civil Court had declared that the continued renewal of the lease for an indefinite term, at a rent that fell far below the market value, effectively breached the owners’ right to the peaceful enjoyment of their property, thereby awarding them €35,000 by way compensation.

Both the Attorney General [now State Advocate] and the tenant filed an appeal, arguing that the applicants’ predecessors had knowingly leased the property at a time when the law had already contemplated measures to protect tenants.

Yet the Constitutional Court, presided over by Chief Justice Joseph Azzopardi and Mr Justices Giannino Caruana Demajo and Anthony Ellul, shot down that argument, stating that “irrespective of the original consent by the owners to lease the property,” the current scenario rendered the applicants “victims of a breach of rights.”

“The social purpose of the law was disproportionate to the need to safeguard the fundamental rights of owners,” said the Court, further rejecting the tenant’s argument that he was not to blame for any such “potential” breach since he was merely availing himself of protection in terms of law.

When any ordinary law, such as that regulating rents, is inconsistent with rights and freedoms safeguarded under the European Convention, those fundamental rights and freedoms “shall prevail,” observed the Court.

Although the 2009 amendments sought to alleviate the burden suffered by landlords by allowing for increases in rent, the law completely ignored various factors such as the size of the property, its location and value as well as its amenities.

Moreover, the law offered no “effective remedy” for the landlord to take back physical possession of his property, making it “very difficult” for owners to do so even when they needed the premises for their own personal use.

In spite of allowing for some increase in rent, the 2009 amendments effectively offered landlords “a mere drop” of their entitlement, the Court remarked, pointing out that “in spite of clear jurisprudence on this matter, the legislator persisted in dragging his feet.”

The law offered no mechanism to assess the social needs of tenants so as to strike a balance between “a genuine need for social accommodation and depriving owners of the enjoyment of their property for an indefinite time.”

Tenants who, like Aquilina, had lived in the premises throughout their life and lacked sufficient means to match the market value of the rent, were to be assisted.

Yet this was not to be done at the expense of the landlord who had to bear the full burden and put up with such “manifestly unreasonable” rent indefinitely, the Court declared, thus confirming the breach of rights in terms of Article 1 of Protocol 1 of the European Convention.

In this case, however, the landlords were aware that there was to be no other protected tenant to take over possession from the current tenant.

In the light of the circumstances of the case and also noting that the tenant was to pay for maintenance works inside the premises, the Court slashed compensation from €35,000 to €15,000, stating that this was “more than sufficient.”

Lawyers Edward DeBono and Karl Micallef assisted the landlords.