Amendments to Chapter 158 were introduced by Act No. XXVII of 2018. The amendments affect the leases created by virtue of a previous title of emphyteusis or sub-emphyteusis which commenced before the 1st June 1995 through the application of article 5, 12, or 12A of Chapter 158.
The constitutionality of the provisions of Chapter 158 has been challenged repeatedly in front of the Maltese Courts and in front of the European Court in Strasbourg. Since the case of Amato Gauci v. Malta, (App no 47045/06 [ECHR, 15 September 2009]), the majority of the cases brought by owners arguing a breach of their rights to property have been upheld by our Courts and the Court in Strasbourg.
Parliament has now introduced amendments to Chapter 158, supposedly to try and remedy the situation and decrease the excessive burden put on owners by operation of the law. It is doubtful whether these amendments will satisfy constitutional requirements. The workings and application of the means test, the length of proceedings in front of the Rent Regulation Board and the application of the increase in rent might still amount to a breach of Article 1 Protocol 1 of the European Convention and Article 37 of the Constitution due to the lack of proportionality between the rights of the owner and the rights of the community at large and lack of procedural safeguards to remedy such situation.
Landlords can now file an application before the Rent Regulation Board demanding that the rent be revised to an amount not exceeding 2% per annum of the open market freehold value of the dwelling house.
At the initial stage of the proceedings, the Board must conduct a means test in accordance with the Continuation of Tenancies (Means Testing Criteria) Regulations (Subsidiary Legislation 16.11). The means test shall be based on the income of the tenant between the 1st January and the 31st December of the year preceding the year when the proceedings are commenced and the capital of the tenant on the 31st December of the said year.
Where a tenant does not meet the criteria of the means test (i.e. has the necessary means in accordance to the regulations) the tenant will be given five years to vacate the premises and the amount of rent payable in those five (5) years will be double the rent which would have been payable in terms of articles 5, 12 or 12A of Chapter 158.
Where a tenant meets the criteria of the means test (i.e. does not have the necessary means in accordance with the regulations) the tenant will have to start paying an increased rent to a maximum of 2% of the market value of the premises. However, the Board after viewing the particular circumstance of that case can order that the increase is gradual. The rent will be revised after six (6) years either by an application to the Board or by mutual agreement of the parties.
An application to the Board can also be filed if there is a ‘material change in circumstances during the continuance of a lease’. The owner can request a revision of the conditions of the rent on account of their causing a disproportionate burden upon him. An owner may also demand the dissolution of the lease if he can prove through unequivocal evidence that the tenant is not a person in need of the social protection provided by articles 5, 12 or 12A of Chapter 158. However, the owners cannot file a case citing ‘material change in circumstances during the continuance of a lease’, if an application requesting the increase of the rent up to 2% of the market value (as described above) is pending or if less than three (3) years have elapsed from judgment.
According to the proviso to Article 2 of Chapter 158, regarding the definition of a tenant, it is stated that a tenant includes ‘the children, and any brother or sister, of the tenant who are not married and who reside with the tenant at the time of his or her death and any ascendant of the tenant who so resides with the tenant.’ Where the tenant is a person described in this proviso, the tenant shall only acquire a right to occupy the dwelling house for a period of five (5) years upon the expiration of which the tenant shall vacate the said dwelling house. The compensation for occupation of the dwelling house payable to the owner during this period shall, unless the occupier meets the income and capital criteria of the means test, amount to double the rent which would have been payable in terms of articles 5, 12 or 12A.
The amendments described above shall apply also where any emphyteusis, sub-emphyteusis or tenancy in respect of a dwelling house regulated under articles 5, 12, or 12A has lapsed due to a court judgment based on the lack of proportionality between the value of the property and the amount receivable by the landlord and the person who was the emphyteuta or the sub-emphyteuta or the tenant still occupies the house as his ordinary residence on the 10th April 2018. In such cases it shall not be lawful for the owner to proceed to request the eviction of the occupier without first availing himself of the provisions of this article.
When deciding on the constitutionality of the provisions of Chapter 158, the Maltese Courts, in recent judgments, usually declare that there has been a breach of Article 1 Protocol 1 of the Convention and Article 37 of the Constitution and that the tenant cannot avail himself of the Articles of the Chapter 158 to continue to reside in the dwelling house (Vide Dr Cedric Mifsud u Dr Michael Camilleri noe v. L-Avukat Generali u Carmelo Camilleri & Dr Cedric Mifsud u Dr Michael Camilleri noe v. L-Avukat Generali u Andrew Azzopardi et decided by the Constitutional Court on 31st January 2014 and 25th October 2013 respectively). The Courts, in constitutional proceedings, will not order the eviction of the tenant.1 The landlord would have to file a separate case demanding the Court to evict the tenant. By the application of the amendments above, this request for eviction will no longer be allowed before using the procedure set out in the amendments.
1 Vide Josephine Azzopardi pro et noe vs L-Onorevoli Prim Ministru et deciz fis- 27 ta’ Gunju 2017 [Rik 96/2014 - Illi gie deciz diversi drabi mill-Qrati taghna li l-proceduri kostituzzjonali mhumiex il-forum addattat sabiex jigi deciz jekk inkwilin ghandux jigi zgumbrat jew le. Din il-vertenza tispetta lill-qrati ordinarja jew lill-Bord li Jirregola l- Kera skont il-kaz. Dak li huwa rilevanti hija l-konsiderazzjoni li, fil-kaz li jinstab li ligi hija vjolattiva tad-drittijiet fundamentali ta’ xi parti, dik il-ligi ma tistax tibqa’ tinghata effett bejn il-partijiet kemmil darba u sakemm l-applikazzjoni taghha tkun leziva ghad-drittijiet fundamentali ta’ dik il-parti (ara sentenza Curmi vs Avukat Generali, Kost 24/06/2016)
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