The main purpose of this law is to ensure standards of fairness, clarity and predictability in contractual relations between landlords and their tenants, whilst protecting the right to adequate accommodation for everyone.
- The Act applies to all private residential leases entered into or renewed after 1st January 2020.
- Leases signed from 1st June 1995 to 1st January 2020, are out of scope of this act, and shall be regulated by the Civil Code, unless they are still in force as at 1st January 2021.
- Rents of properties owned by the Government of Malta, those leased on very short let to tourists, rents of properties which are not let for a primary residential purposes and those which were let before 1st June 1995, are outside the scope of this law.
Short Let Contracts
The Act defines short-term private residential leases as those which are negotiated for a duration of less than 6 months, to one of the following categories of lesees:
- Non-resident workers who are employed for a period of less than 6 months or are employed to complete a specific task within the same time period.
- Non-resident students who are enrolled in courses for less than 6 months.
- Residents who need to rent an alternative primary residence for a period of less than 6 months.
- Non-residents who need to rent a property for a period of less than 6 months, provided that they are not seeking to establish their long-term residence in Malta.
Every short lease contract must clearly specify which of the above categories the tenant falls into, with the necessary documentation being attached to the contract. Short-term private residential leases may not be extended.
A tenant may not withdraw from a short-term private residential lease before the lapse of one month. Following this first month, he/she may withdraw from the short-term lease at any time, provided that prior notice is given to the landlord of at least one week, by registered letter.
Long Let Contracts
Long-term private residential leases have a duration of at least 12 months. Any long-term private residential lease negotiated for a period of less than one year shall be deemed to have been agreed for a period of at least one year.
The Act provides that the tenant may not withdraw from a long term private residential lease before the lapse of:
- Six months in the case where the lease is for a period of less than two years.
- Nine months in the case where the lease is for a period of two years or more, but less than three years; or
- Twelve months in the case where the lease is for a period of three years or more.
If the tenant withdraws from a long private residential lease before the above-mentioned periods, the landlord may retain an amount not exceeding one month’s rent from the deposit left by the tenant by way of security. This shall be without prejudice to the landlord’s right to proceed against the tenant to collect any other amount due, and shall also be without prejudice to the landlord’s right to terminate the lease for failure of the tenant to comply with one of his obligations.
The procedure for the withdrawal from long-term private residential leases after the lapse of the above-mentioned periods, which includes shorter notice periods which the tenant is to abide by are also outlined in the Act.
Contents of the Private Residential Lease Contract
All private residential lease contracts are to be made in writing and shall include the following details:
- The address of the property being leased
- The agreed use of the property
- The period for which the lease is being made
- If and how the lease may be extended
- The value of the monthly rent to be paid, together with the method of payment
- The amount of security deposit being paid by the tenant for the fulfilment of his obligations
- An inventory list document, describing the state of the property and of any furniture, accessories, appliances etc. being supplied by the landlord with the property.
Contracts cannot be registered if any of the above requirements are missing, and therefore the private agreement shall be considered null and void.
Registration of Private Residential Lease Contracts
It is the landlord’s duty to register the private residential contract, including its renewal, with the Housing Authority within ten days of the commencement of the lease.
Contracts which remain unregistered shall be null and void. An application for registration may not contain more than one private residential lease. If the landlord fails to register the contract, the tenant may proceed to register the contract himself/herself, at the expense of the landlord.
The rent value may be freely negotiated between the parties with or without the assistance of a broker or estate agent. Unless agreed otherwise, the rent shall be calculated on a monthly basis and, unless agreed otherwise between the parties, in no case may the landlord request advance payment of more than one month’s rent. This is separate and irrespective of the landlord’s right to request any suitable amount by way of security that is acceptable to the tentant.
Rent values may be reviewed once every year and in the absence of any specific agreement, the rent cannot be revised during the term of the lease. Increases in rent may not exceed the annual variations recorded in the Property Price Index published by the National Statistics Office, and in no case may exceed more than 5% of the previous rent.
Shared Residential Spaces
Contract for the lease of a shared residential space shall have a duration of six months and the tenant may withdraw from the lease at any time, by giving one week prior notice to the landlord by registered letter. No penalties may be imposed on the tenant for exercising his/her right of withdrawal.
Monitoring and Enforcement
The Chairperson of the Malta Housing Authority is empowered by law to enter a private property being occupied by any person, subject to the prior issue of a warrant by a Magistrate, in order to determine whether the property is being occupied by any person/s who do not have a valid title of lease.
If it appears to the Authority that any property is occupied for a residential purpose by any person without a valid title of lease, the Chairperson shall issue an enforcement notice to the person or persons granting the enjoyment of the tenement without having formalized their relationship according to law.
Adjudicating Panel for Private Residential Leases
The Act also provides for the setting-up of an Adjudicating Panel, which shall have exclusive jurisdiction to decide disputes relating to private residential leases to which the Act applies, in so far as the claim does not exceed the value of €5,000. This panel consists of an advocate acting as Chairperson, and between two to four professionals with knowledge and expertise in the real estate sector.
For more information from Alliance Letting, please speak directly to Abigail Simiana – Alliance Letting COO.