The reform of pre-1995 rents being carried out by the government protects tenants from eviction or rent increases that they cannot afford, while also handing justice to landlords, Prime Minister Robert Abela told parliament on Monday.
He said that the reform made by the previous government in 2009, on paper, offered protection from eviction and rent rises to tenants, but successive court judgements found it breached the rights of the landlords, rendering the so-called reform not worth the paper it was written on. Tenants had actually had neither the certainty of not being evicted nor the assurance that rents would not rise beyond their means.
The courts had also found that the 2009 reform had been unfair on the landords who continued to be paid a pittance for their properties.
Court judgements had led to several evictions and the state was ordered to pay millions of euro in compensation to landlords.
It was a situation which could not be allowed to continue.
Abela said thousands of tenants were lived in fear of being taken to court, knowing that the inevitable conclusion was that they would be evicted.
The present government had therefore produced a new, robust, legal framework that considered the rights of the landlord and the residents.
The government would shoulder the right of residents to continue to live in their rented properties and would also shoulder the burden of rents which residents could not afford.
Property owners may henceforth go before the Rent Regulation Board to have a fair rent established for their property. The government would pay for legal assistance to the tenant before the board but there would be no crusade against the landlords.
Once the new rent was fixed, in the case of tenants who are pensioners, the government would subsidise the difference from the old rate to the new one, up to €10,000 annually. A pensioner will an annual rent of €230 on a property worth €300,000 could end up with an annual rent bill of €6,000 which the government would cover.
Generous assistance would also be given for tenants who are workers. In their case, they would not be required to pay any rent that is higher than a quarter of their income. Any rent higher than that would also be covered by the government up to €10,000.
As in the case of the pandemic, no one would be left alone, Abela concluded.
Nationalist shadow minister Ivan Bartolo said parliament had a duty to ensure that the law was the best one for the circumstances and the people's lot was improved.
Clearly there was a need to avoid a situation where landlords and tenants ended ending up in court.
It was important, therefore, that the Rent Regulation Board acted promptly and fairly.
The system needed to work well to avoid additional pressures on social housing, an area that already had enough problems. Perhaps more could be done by the government to solve the issue of some many properties being unoccupied.
Bartolo observed that there was nothing in the law to cover a situation where the landlord wanted to repossess his property.
The Bill was moved by housing minister Roderick Galdes. The debate continues on Tuesday.
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