Renters lose hundreds in deposits for flats they never occupied

Would-be tenants say they are losing hundreds of euros to landlords for flats they never moved into, with a renters’ union calling for a neutral body to handle deposits. 

Times of Malta spoke to three renters who claim they paid deposits on properties but were either denied access to their flat or had their tenancy fall through and were then refused refunds. 

One man, who asked not to be named, said he paid €1,100 for a Gżira flat, covering the deposit, rent and agency fee. But after paying the money, he was told the flat was no longer available.

“I was shown another flat I didn’t like but they didn’t want to give me back the money,” he said. “That money is nearly all that I have to my name.”

He has since sent a legal letter and sought help from tenants’ union Solidarjetà.

Other tenants had similar experiences.

Elijah Kalejaiye, 45, said he paid a €400 deposit for a room in Żebbuġ after viewing it on a Saturday, planning to move in the following Monday. 

But when he arrived at the property, the belongings of the previous tenants were still there.

“The landlord said there had been some complications. I got a bad feeling because of that and I had already heard some negative things about the landlord, so I said I was no longer interested in the room,” Kalejaiye said.

The landlord refused to return the deposit and Kalejaiye is now fighting to get it back.

In another case, Francesco Di Fio had already signed a contract for a room in Sliema and paid €1,300 as a deposit and the first month’s rent. But a dispute with the landlord on move-in day escalated. 

“It started because I arrived a little later than we agreed, and, then, it was about whether he would provide things like bed sheets, pillows and a towel. Eventually, it escalated to him throwing out my bag into the street,” the 27-year-old said.

The landlord refused to return the deposit.

Matthew Attard, president of Solidarjetà said such cases are common, particularly among tenants in vulnerable situations. 

“We’ve seen a lot of agents pressuring tenants to make deposits before contracts are signed and, in some cases, even before tenants are shown the contracts,” he said. 

“When disputes arise, deposits and agency fees are withheld by the agents or landlords.”

“Most often, these are tenants in precarious and vulnerable situations who are being exploited so that agents and landlords continue to increase their profit margins,” he said.

He said the union intervenes on tenants’ behalf but when that fails, they “are left without a plausible legal avenue to recover their money”.

“It is unacceptable that renters, especially those most in need, are left to absorb these losses without protection,” Attard said.

The Private Residential Leases Act does not apply to such situations as it only takes effect when there is a signed contract that is registered with the Housing Authority, leaving renters unprotected. 

The gap in the law is being exploited

Attard said the gap in the law is being exploited and called on the government to set up a deposit holding system. 

That money should remain in the escrow account for the duration of the tenancy, he said. Escrow systems are already in place in other European countries, including the UK and Germany, where the deposits are held by an approved company until the end of the tenancy. 

Attard added that funds should only be paid when the rental contract is signed. 

He called for the Adjudicating Panel for Private Residential Leases to have its jurisdiction expanded. The body, which currently handles disputes over registered private leases, should also be empowered to resolve issues that arise before contracts are filed with the Housing Authority, he said.

As the status quo persists, Attard said tenants are losing hundreds of euros for properties they have never lived in.