Updated 1.48pm with MDA reaction.
Malta Tenant Support has welcomed the government’s decision to resolve what it said was the contentious issue of the pre-1995 rental market.
“The reforms will end the uncertainty for tenants as more and more judgments are made by the courts in favour of pre-1995 landlords,” the NGO said on Sunday.
“And it will also go some way towards redressing the decades of injustice suffered by pre-1995 landlords. We are glad that another pillar of our national housing strategy is being looked at.”
Prime Minister Robert Abela announced on Saturday a set of reforms that are aimed at resolving the impasse between landlords and tenants who are locked in protected, pre-1995 rental law arrangements.
The reform will see the government absorb most of the additional rental costs thousands of families, particularly pensioners, are expected to face as a result of the change, which is intended to wipe away a law that courts have repeatedly deemed to be unconstitutional.
Litigation lawyer Nick Debono, who works for Fenech & Fenech advocates, said the proposed amendments are “the first step in the right direction” to strike a balance between landlords’ and tenants’ interests.
Debono, who has represented landlords in court cases, said: “However, this is certainly not enough in terms of the landlords receiving adequate compensation for the money they lost throughout the years by not being able to rent their property at the fair market rental value.”
While the government ensured that any extra costs for tenants would be subsidised, “nothing has been proposed vis-a-vis landlord compensation”.
Debono warned that, given the lack of proportionality between the potential rental income lost by landlords over the years and the amounts awarded in the civil court, landlords would end up resorting to the European Court of Human Rights.
Facebook group ‘The unjust Maltese pre-1995 rent laws’ was awash with reactions from landowners on Sunday.
While most acknowledged the possibility of increasing the rent, many complained of an inability to take their property back from the tenant. Others complained of recurring issues with tenants who pay cheap rent and forego doing any kind of maintenance in the property, arguing that the cost of renovations by far outweighs the rental fee they received.
Some spoke of still having to resort to expensive processes through notaries, lawyers and architects to initiate proceedings as well as paying the causa mortis tax.
MDA welcomes the government's proposal
The Malta Developers Association (MDA) said she welcomed the government's proposal.
It said it was not easy to find the right balance, but it commended the government for taking on the task.
It said issues still need to be addressed, such as clarity of the process with which the landlord will receive the compensation.
It said the process with which the property valuation is to be carried out is not yet established. The valuation must be carried out by professionals and must reflect the current market price, it argued.
Means testing must also be carried out diligently so as to eliminate abuse.