The owner of an apartment who was unable to claim back possession of her property under current rental laws, has been awarded €18,000 for having shouldered the burden brought about by a social reality that prevailed back in 1979.

This was the outcome of another decision, in a long line of judgments, in which the courts declared that the legal regime regulating pre-1979 leases, placed a disproportionate burden on landlords, making it practically impossible for them to regain possession of their property. 

Tailored in light of the social reality that prevailed in 1979, the Housing (Decontrol) Ordinance amendments had been introduced to ensure that people did not end up homeless, observed the First Hall, Civil Court in its constitutional jurisdiction, presiding over an application filed by Dorothy Mifsud. 

The applicant was the sole owner of a Hamrun apartment which she and her husband had transferred to the respondent, Dennis Micallef, under title of temporary emphyteusis for 21 years, at an annual ground rent of Lm200 (€466). 

The transfer took place just before the law was amended in 1979.

However, when that term expired in 2000, the contract was converted to lease in terms of law at an annual rent of €932, which was subsequently increased to €1,224 in 2013. 

The applicant, since widowed, filed proceedings claiming that her fundamental property rights were being breached since she could not take back possession of the decontrolled flat, and furthermore, she was being deprived of adequate compensation. 

When testifying in court, the applicant argued that although 2009 amendments to the law allowed landlords to increase the rent every three years, instead of the former 15-year period, that provision still did not suffice since the rent payable did not reflect current market trends. 

On the other hand, the 68-year old lessee told the court that he had lived in the flat for the past 41 years and got by on a pension out of which he paid the rent. 

Moreover, he claimed to have paid for improvements in the property, such as new doors and a bathroom. 

A court-appointed architect who assessed the property reported that the rental value of the apartment was actually much higher than that currently paid by the tenant. 

'Disproportionate situation between rights' 

In light of all evidence put forward, as well as the long line of European and local case-law, Mr Justice Lawrence Mintoff observed that the rental regime gave rise to a disproportionate situation between the rights of private owners and lessees. 

The social reality that prevailed in 1979 had necessitated the introduction of legislative safeguards to ensure that people would not end up homeless, observed Mr Justice Mintoff. 

But that law had laid restrictions upon the amount of rent which could be demanded by the owner, thus tipping the balance against landlords who, like the applicant, had to single-handedly carry the weight of that social reality, in her case, since the concession expired in 2000. 

Moreover, the rent chargeable in 1979 was “realistic and fair” in terms of the social reality prevalent then.

But subsequent increases in rent continued to be calculated on the amount originally stipulated, observed the court, without any consideration as to whether the landlord had alternative property or capital. 

Turning to the circumstances of the case at hand, the court concluded that the applicant’s rights had been breached.

Based on the architect’s valuation, the woman had been deprived of some €50,440 in rent since 2000. 

Yet in light of previous judgments in similar circumstances and taking note of the public interest and social purpose of the challenged law, the court awarded the applicant €18,000 in material and moral damages payable by the State.

The court also ordered the Court Registrar to forward a copy of the judgment, once it became final, to the Speaker in Parliament.