Apartment owners who wish to rent out their property as an Airbnb will first need to get the go-ahead of their condominium neighbours, according to plans being prepared by the Malta Tourism Authority.

Landlords who do not get the condominium approval will be refused an MTA licence to rent out their property on a short-let basis, MTA CEO Carlo Micallef said, explaining that the new rules are intended to strike the best possible balance between respecting residents and maintaining a strong tourism industry.

Micallef was replying to questions by Times of Malta journalist James Cummings during the annual conference of the Association of Catering Establishments (ACE) on Tuesday.

He hinted at the government's plan to introduce the new regulations as part of a broader tourist accommodation reform that will be launched in the coming months and issued for public consultation.

“We will be trying to stop the granting of new licences in apartment blocks unless there is an agreement in the block," he said.

“We need to find a balance, we don’t want to shock the economy."

Renew approval every three years

The plan is for the revised rules to apply to all apartments with a short-let licence, including existing ones. 

Sources close to the government told Times of Malta later that the new rules would also require landlords to seek fresh approval from their neighbours every three years. 

They would be required to obtain approval from the condominium association through a majority vote at a general meeting. Licences would not be renewed without the fresh approval.  

To ensure fairness and prevent potential abuse, a mechanism will be in place for landlords to appeal decisions made by the condominium association.

The government's decision to tighten regulations comes in response to growing complaints from residents about disruption caused by short-term rentals in their apartment blocks.

Issues such as excessive noise, littering, and frequent turnover of guests have been cited as major concerns.

Who will not be affected?

Micallef confirmed the new rules will not affect Airbnb properties with direct street access such as terraced houses, villas, maisonettes, and other properties which have a door on the street.  

"We believe this measure will also ease pressure on the housing market, as more accommodation will then be available," Micallef added, suggesting that the apartments that do not obtain an MTA short-let licence would then become available for long-lets.

He also dismissed talk of stricter regulations, saying some countries had taken more exaggerated measures, some completely prohibiting Airbnbs or only allowing them during certain peak summer periods.

In June, Barcelona's mayor announced plans to ban short-term rentals, including Airbnb. He said the decision was aimed at solving what he described as “Barcelona’s biggest problem”- the housing crisis that has seen residents and workers priced out of the market.

Vienna followed in July, instituting a cap on short-term rental stays.

Dismissing stricter measures

While there was initial speculation about more stringent regulations being planned in Malta, such as requiring landlords to own entire buildings to operate Airbnbs, sources said the government was not considering those options.

The focus remains on striking a balance between economic interests and the wellbeing of local communities.

The sources said the government would also not implement a proposal included in the Nationalist Party's leaked pre-budget document that would have established the maximum number of days that a property could be rented out per year, to limit the impact on neighbourhoods.

"The government doesn't agree with the idea because it would ruin people's investments and weigh heavily on loan repayments," one source said.

Condominium associations to be held accountable for noise and waste issues

Sources close to the government said the reform intends to promote a system of self-regulation and a culture of good neighbourliness within residential communities.

To this end, condominium associations will be held accountable for noise and waste issues arising from short-term rentals.

The Environment and Resources Authority (ERA) will be responsible for enforcing the rules and non-compliance could result in fines issued to the condominium association, which would then need to levy them on the responsible landlord, sources said.  

Hotels took hit due to Airbnbs

Over the years, local trends have seen tourists booking Airbnb for short-term rentals and moving away from traditional accommodations such as hotels and hostels.

Micallef said the number of tourists making half-board bookings in hotels has dropped to 25 per cent.

He said tourists who rent Airbnbs usually have one meal in the accommodation and then eat out for the rest of the day.

2019 figures showed a quarter of tourists booked Malta trips through Airbnb, and that percentage has increased in recent years.

Lobbyists, such as the Malta Hotels and Restaurants Association (MHRA) have often warned private accommodation services to maintain the same standards as hotels.

In July, the MHRA urged the government to stop encouraging the development of new hotel rooms and review rented accommodation and catering licensing protocols.

It warned that the rapid growth has led to overcrowded destinations and anti-social behaviour.