Law is pro-landlord in Malta, but courts are impossibly slow

July 18, 2006

Landlord and tenant law in Malta is pro-landlord.

Malta seaview houses

Rents: Can landlord and tenant freely agree rents in Malta?

Rents can be freely negotiated on the lease of any dwelling house entered into on or after the 1st June 1995. This paper deals exclusively with leases made after this date.

Rent increases may be freely agreed between landlord and tenant. No law restricts the mechanism for such rent increases.

Non-residents are in some ways still restricted in the purchase of property in Malta, and in the granting of property on lease, even after the achievement of EU membership. However luxury premises owned by non-residents may normally be granted on lease. Furthermore there are no restrictions on properties purchased in special designated prestigious areas.

Security Deposits

The parties are free to negotiate any amount of security deposit. It is common for the landlord to retain an amount equivalent to one month rent at the commencement of the lease as security deposit, which will be returned to the tenant at the end of the lease if all his obligations are fulfilled.

Rent is normally payable monthly in advance, and rental deposits are not frequently taken. A payment of rent in advance for more than six months may be null in certain circumstances.

What rights do landlords and tenants have in Malta, especially as to duration of contract, and eviction?

The parties are free to negotiate any duration. If the duration is longer than 16 years, care must be taken in drafting and in the conditions, to avoid the danger that the lease could be interpreted to be another type of contract (emphyteusis) not intended by the parties.

Notice is voluntary at the expiry of the lease of a determinate period, unless it is a contractual condition.

Malta Mediterranean propertiesIf, after the end of the lease, the tenant is allowed to continue enjoying the premises, the lease will be considered to be tacitly renewed under the same conditions, for a period equivalent to the way the rent was agreed. For example for one month, if the rent has been agreed upon at so much a month. Tacit renewal does not take place if the landlord had given notice to the tenant to vacate. If the lease is tacitly renewed, then notice is required by the landlord.

The parties are free to negotiate any grounds for early termination, including to allow the tenant to terminate at will, though this is not common. An almost standard clause allows the (non resident) tenant to terminate the lease should he need to leave Malta. A reasonable notice period is always inserted. Early termination by landlord or tenant is always possible if there has been a serious breach of express or implied conditions of the lease, whether this is contractually stated, or not. The parties are free to negotiate any additional grounds for early termination.

Any lease for a period exceeding two years must be in writing, on pain of nullity.

The ordinary courts have competence in any arising dispute. However, in the case of a money claim up to €2,360, the Small Claims Tribunal is exclusively competent. Furthermore, in the case of a money claim up to €11,800, that is certain, liquidated and due, the claimant may, in lieu of a court case, file an official demand in the registry of the Court, and if within 30 days of service the claim is not contested, the demand becomes enforceable as if it were a court judgement.

THE EFFECTIVENESS OF THE LEGAL SYSTEM

Collection of Rent:
(A) under 11,800 Euros:
If claim is not contested:
• Completion of service of demand (normally): 10 days
• Completion of service of demand (normally): 10 days
• Time for demand to become an enforceable title: 30 days
• Enforcement of demand (approximately): 150 days
If claim is contested, duration of trial:
• Small Claims Tribunal: 90 days
• Magistrates Court: 400 days+
• If appealed, a further: 200 days
• Enforcement of judgement (approximately): 150 days
Collection of Rent: 0.10%
(B) over 11,800 Euros: Duration of trial if claim is contested but tenant does not give a satisfactory prima facie defence to the judge (approximately): 90 days
Duration of trial (if claim is contested and tenant gives a satisfactory prima facie defence): 730 days+
• If appealed, a further: 1095 days +
• Enforcement of judgement (approximately): 150 days
Eviction of tenant
If not contested, or if claim is contested but tenant does not give a satisfactory prima facie defence to the judge (approximately): 90 days
• If contested: 400+ - 730 days +
• If appealed, a further: 200+ - 1095 days+
• If appealed, a further: 200+ - 1095 days+
The eviction judgement will normally allow the tenant 2-3 months to vacate. If he does not -
• Enforcement of judgement (approximately): 30 days
Notes: Only an approximate idea can be given. The time depends on many factors, including the complexity of the issues, and the caseload and modus operandi of the particular Magistrate / Judge.

Brief History: Recent changes in Malta's landlord and tenant law

The ordinary law of Landlord and Tenant has since 1868 been the abovementioned Civil Code provisions. In 1939, special "emergency" legislation was introduced, giving very strong protection and advantages to tenants, and extensive power to the Housing Authority to requisition premises. This legislation is still in force - around a quarter of the housing stock is still rent-controlled - although the power of requisitioning has practically been abolished. However, by a law passed in 1995, leases entered into after 1st June 1995 are excluded from the application of this special legislation, and the ordinary law applies.

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