Private residential leases

In light of the recent passage of Act No. XX of 2024 of the laws of Malta, as of the 18th of June, 2024, significant amendments have been introduced to the law regulating private residential leases that necessitate a clear and thorough explanation. This article serves to elucidate the key changes and introductions brought forth by the amended legislation, providing a comprehensive overview for stakeholders and interested parties alike.

Amendments to the Civil Code

Article 1555A(2) concerning lessees who are recovering in the hospital and have been certified by the institution to be dependent upon it was amended. For the purposes of lease continuation, “the said permanent dependence shall have the same effects as the death of the lessee.”Naturally, death brings a contract to its natural end as one party can no longer fulfil their obligations.

With regard to Article 1573, for the lessor to dissolve a lease on the ground of personal desire, a proviso has been enacted to include the period within which notice must be given to the lessee for private residential leases under the Private Residential Leases Act, i.e. that of 3 months prior.

Conversely, Article 1575(1) concerns the alienee of a leased property desiring to dissolve the lease. A proviso has been enacted for private residential leases, establishing that the lessor must give notice via registered letter 3 months prior.

Amendments to the Private Residential Leases Act

New definitions have been included in the Private Residential Leases Act (‘the principal act’):

"Building" or "premises" shall now mean“a house or other building, or part thereof, which is used or may be used for residential purposes in accordance with the provisions of the relevant laws.”

"Dwelling house" shall mean“a building or part of a building separately let, which includes any land or garden forming an integral part, or enclosed within the precincts of such dwelling house, but does not include any movable structure, vessel, or vehicle.”

These definitions refer to specific parts of the establishment and do not limit their scope to the house/building in its entirety. A dwelling house can include the land or garden integral to it.

Additionally, "lease" shall include “sublease.”A proviso has been included regarding the definition of "residence" when a tenement is leased by a company to accommodate its employees. If the employees pay consideration to the company, the relationship is deemed to be a sublease.

Article 3 of the principal act, which outlines its applicability, now states that the principal act shall not apply to tenements let or granted on emphyteusis before June 1, 1995. Moreover, the provisions of the principal act will not apply to leases entered into after June 1, 1995, if they originate from a controlled private residential lease under the Reletting of Urban Property (Regulation) Ordinance or the Housing (Decontrol) Ordinance.

Amendments Affecting the Lessor

An important amendment affecting lessors is the change in terminology from ”duty” to “obligation” regarding the time frame for registering private residential lease contracts. This amendment is one which has more serious legal effects. While a duty is what one ought to do as their responsibility, an obligation is an irrevocable must, i.e., an act that you are bound to carry out. However, given the increased severity, the time limit imposed on the lessor to file the private residential lease has been extended from 10 days to 30 days.

Additionally, for private residential leases entered into after June 1, 1995, but before the principal act came into force, and which were still in force on January 1, 2021, no declaration of any amount shall be deposited by the lessee as security.

Regarding the conditions for the validity of the writing of a contract of private residential lease listed in Article 6(1), an amendment has been introduced establishing that if one or more essential conditions are absent, the agreement shall be null and void.

Another change for lessors is that the registration process shall now be completed “exclusively online.”

Amendments Affecting Both Lessor and Lessee

Article 9A shall come into force, allowing for the explicit and deliberate extension of an agreement's term, known as "express renewal." However, while an express renewal clause may be included, no other changes may be made to the original agreement except for the permissible increase in accordance with Article 14, which shall never exceed five percent (5%).

Additionally, agreements that were meant to expire before December 31, 2020, shall not be registered unless accompanied by an express agreement of renewal signed between the parties. This renewal must be for at least one year, though the parties may choose a longer period.

Article 9B has been introduced, allowing any party to request the substitution of the lessee in a private residential lease. However, this substitution requires the express consent of both the lessor and the lessee(s). This article also introduces the terms "outgoing lessee" and "incoming lessee," where the former is the original lessee and the latter is the new lessee replacing the former.

Furthermore, Article 9C introduces the possibility of adding a lessee to the agreement, but only with the express consent of both the lessor and the existing lessee(s). The new lessee will be responsible for any debts incurred before their addition to the agreement. Importantly, they must have access to the original lease agreement and all relevant registration details.

Conversely, Article 9D stipulates that if both parties agree to end the lease early, or if the tenant leaves without informing the lessor, the lessor can apply for a new lease on the same property. This is allowed even if the original lease period has not ended, provided the landlord notifies the relevant authority about the early termination or abandonment. The Authority will inform the previous lessee about the lessor’s request to cancel the lease.

However, if the tenant abandoned the property, cancelling the lease does not free the lessor from responsibilities to the previous lessee if the landlord rented the property to someone else in bad faith. Additionally, canceling the lease does not affect any claims the lessor might have against the lessee who abandoned the property.

Author: Dr Catriona Cuschieri

For any further information or assistance please contact Dr Robert Tufigno.


Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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