The Private Residential Leases Act, Chapter 604 of the Laws of Malta, has introduced significant reform to legislation on rent in Malta. The Act, enacted on the 8th of November 2019, applies to Private Residential Leases entered into or renewed after the entry into force of the Act.
Leases granted after the 1st June 1995 and which are still in force on the day of the entry into force of the Act shall continue to be regulated exclusively by the provisions of the Civil Code, except for the cases specifically mentioned in the new Act.
New requirements for lease contracts
The new law has introduced a number of salient requirements which all lease contracts entered into after the entry into force of the Act must necessarily adhere to. One important requirement which has been introduced is mandatory registration of the lease agreement with the Housing Authority. Furthermore, the law lists a number of required clauses which must necessarily be included in the written agreement.
Forbidden Clauses
The Private Residential Leases Act also lists a number of clauses which, if included, will be considered null and without effect. Amongst the forbidden clauses listed in the law are clauses providing for the automatic termination of the contract other than the non-fulfillment of the lessee’s obligation under certain articles of the Civil Code, or the non-observance of any one of the conditions of the lease for which termination had been expressly foreseen, and clauses authorising the lessor to reduce without equivalent consideration any benefits stipulated in the contract. Registration of the contract with the Housing Authority shall not act as validation for the clauses therein.
Distinction between short and long leases
Short and long lets are defined in the Private Residential Leases Act. Long private residential leases must have a minimum duration of one year, whilst short private residential leases cannot extend to longer than six months. Further provisions regulating each type of lease are included in the new law.
Compliance and monitoring
The competent authority to carry out compliance with the new regime is the Housing Authority. The law endows the Housing Authority with a number of powers in carrying out compliance and monitoring functions. The Chairperson of the Authority and such officer, employee or any other person as may be authorised by the Chairperson with the assistance of the Police Force, shall have the right to enter the private tenement, or verify whether the tenement is being occupied by any person. Such measure may only be done for the specific purposes outlined in the law and access shall require the prior issue of a warrant signed by a magistrate. New offences are also introduced in the Private Residential Leases Act.
Establishment of Adjudicating Panel
The Adjudicating Panel, established by the Private Residential Leases Act, has exclusive jurisdiction for disputes relating to private residential leases. However, this jurisdiction is limited to claims amounting to less than €5,000 and relative to a registered contract.
Registry of Defaults
All defaults linked to private residential leases shall be recorded by the Housing Authority and kept in a registry for the reference of prospective lessors or lessees. Records are cancelled automatically within the lapse of three years.
The above article is published for general information purposes only and does not constitute legal advice. For queries relating to property law in Malta, contact us here.