Updated 12.45pm
Upcoming changes to Malta’s rental laws risk locking tenants into properties that turn out to be not as advertised, a tenants union says, sparking fears that vulnerable tenants will be deprived of a crucial safety net.
The proposed changes are set to extend what is known as the di fermo period within a lease, the minimum period that a tenant must stay in a property before they can be released from the contract.
This ranges from six months in the case of a one-year rental contract, rising to nine months for two-year contracts and 12 months for contracts longer than three years.
In practice, this means that if a tenant has signed a one-year lease, they are obliged to pay at least six months rent but can choose to end the lease from the seventh month onwards.
This will no longer be the case when the proposed changes come into force, with the di fermo period effectively being extended to cover the entire period of the lease.
This change is believed to be driven by landlords’ complaints over tenants leaving them high and dry by exiting their contracts before their time.
However, tenants’ associations say that the clause is key to providing tenants with an escape from a flawed rental property that does not conform to the way it was described, or from a situation where a landlord is not fulfilling their obligations.
Balancing power
“The current law recognises that the balance of power within the landlord-tenant relationship is skewed towards the landlord,” says Johanna Macrae Axisa, a representative of Solidarjetá, a newly established trade union protecting the rights of tenants.
“It goes a small way towards addressing this imbalance of power by guaranteeing the landlord a period of income while providing tenants the opportunity to leave a contract early without paying a penalty”.
Macrae Axisa, who also represents Malta Tenant Support, told Times of Malta that many tenants are often reluctant to open dispute claims against their landlords when they are not satisfied with the property they have rented, so instead opt to wait out the di fermo period and move elsewhere.
“There will now be many tenants who will be stuck in a contract despite being unhappy with the property or landlord simply because they cannot afford to lose their deposit or be liable for unpaid rent,” she said.
Macrae Axisa believes that rogue landlords are the ones most likely to benefit from the change.
“Most landlords are not abusive and will be understanding whenever issues arise, but this will encourage rogue landlords to abuse their position, especially when it comes to the most vulnerable tenants, many of whom are third-country nationals.”
Solidarjetà fear that the laws are being brought in at the behest of the developers’ lobby, making it easier for larger-scale landlords who juggle multiple leases at one go to have a guaranteed income without having to provide tenants with adequate living standards.
Curbing abuse
When contacted, MDA chairperson Michael Stivala told Times of Malta that although the current law is “well-meaning”, it has “brought about uncertainty and may have forced a number of landlords to increase rates in order to cover themselves from unexpected terminations by tenants”.
According to Stivala, the proposed change will bring about more certainty and “should not affect tenants negatively. This is because if a tenant is not able to honour their obligations, no landlord will keep them on as a client”.
“The removal of one-sided terminations will also help curb abuse by tenants who hop from one property to another without complying with the rules. On the other hand, landlords will still be compelled to abide to the conditions specified in the contract,” Stivala said.
In a joint statement, four landlords, Maria Delia, Ruth Chircop, Francis Damanin and Lora Cascun, who intend on setting up a lessors' association, said they had observed a "concerning trend" of tenants relocating every six months.
They said this "inevitably" drives up rental prices because of the financial burden of cleaning costs, agency fees, repairs and months where the property is vacant.
"Encouraging adherence to full-year contracts by tenants and landlords alike would promote market stability, as satisfied lessor-lessee relationships are more likely to result in lease renewals under agreeable terms," they said.
Hidden defects
A poll carried out by Malta Tenant Support among over 300 tenants found that a fifth of those who terminated a lease early said they did so because of hidden defects to the property and flaws that were not immediately apparent.
A further 15 per cent said that they were driven to leave a property because of “non-compliance landlords”, or a landlord’s failure to stick to their obligations. Roughly the same number said they terminated their lease because they found a property that was better value.
Other proposed changes to the law hope to curb abuse by introducing a public blacklist of tenants and landlords who have been found to have breached judgements by the Housing Authority’s adjudication panel. Tenant substitutions, where a tenant can find somebody else to take over their lease at the same conditions, will also be introduced.
17 NGOs say amendments are unsocial
On Tuesday, 17 NGOs said in a joint statement that the amendments would reward abusive landlords and punish tenants.
"The proposed amendments mean the further weakening of the tenants’ position by prohibiting them from leaving the leased property during the last six months of their rent contract," the NGOs said.
"Currently, tenants can leave a property with a one-month notice period - during the last six months of a one-year contract - without suffering any damages. This gives tenants a modicum of flexibility in a situation where landlords hold the almost absolute power to decide the terms of the lease. For example, it allows tenants to find another property if they are unsure whether the contract will be renewed with a price they afford, as well as offers the possibility to leave properties with substandard conditions and abusive landlords.
"If the proposed amendment goes through, tenants who leave the property at any point during the contract – even in the last six months - will lose their deposit and make themselves liable to legal action from the landlord for loss of income. This will completely tip the scales against the tenants and create a situation where - while landlords can practically do whatever they want - the minimal flexibility afforded to tenants is eliminated."
The NGOs also pointed out that the proposed amendments include other provisions of concern, such as one that will allow landlords to increase the rent price even when they forget to legally terminate a lease.
The organisations appeal for the anti-tenant proposals to be withdrawn and to instead move towards a more stable, regulated and just renting model.
The statement was signed by Moviment Graffitti, Solidarjetà Workers’ and tenants’ union, aditus Foundation, Caritas, Malta Young Progressive Beings, Dance Beyond Borders, Paulo Freire Institute, Żminijietna, African Media Association, Blue Door Education, The Maltese Association of Social Workers, Victim Support Malta, Migrant Women Association, SPS – Students’ Philosophical Society, ESA – Earth Systems Association, ESO – European Studies Association, KŻE – Kolletiv Żgħażagħ Eko Xellugin.