Act No. XX of 2024 (the “Amending Act”) has brought about a number of changes to the laws governing leases and private residential leases with the most significant amendments found in the Private Residential Leases Act, Chapter 604 of the Laws of Malta (“Act”). The legislator’s intention behind these changes is to enhance transparency and streamline the legal framework when it comes to residential leases ensuring on one hand more flexibility to both lessor and lessee and on the other hand better tenant protection and a higher standard of habitation.
Pre-1995 Rent laws and Non-Use of lease Property
The only amendment carried out in the Civil Code is the one under Article 1555A (2) which addresses non-use of a tenement in the case of pre-1995 leases which are regulated by the Reletting of Urban Property (Regulation) Ordinance (“Chapter 69”) and the Housing (Decontrol) Ordinance (“Chapter 158”). Prior to the introduction of Act XX of 2024, lessees in pre-1995 leases who were dependent on healthcare institutions could transfer the lease to relatives specified under Article 1531F (which has been repealed). This is no longer the case as now the law expressly states that lessees who are recovering in hospital or in an old people’s home for an indefinite period shall have the same effects as death. Therefore, the provisions of Chapter 69 and Chapter 158 regarding the right to continue the lease upon the lessee’s death apply.
Harmonisation of Notice Periods, Express Renewal & Termination of Lease Agreement
The Amending Act mandates that in the case of long private residential leases, the lessor shall serve the notice to lessee at least from three months before the expiration of the term of lease. Moreover, the lessor must provide evidence that the notice has been sent by registered mail within the stipulated period and to the correct address. If the lessor fails to serve the lessee with a notice or fails to serve the notice within the stipulated timeframe, the period of lease shall be automatically renewed for a period of one (1) year. If on the other hand, the lessor fails to serve the lessee with the notice, but the lessee still decides to terminate the lease, the responsibility falls on the lessee to provide a notice of termination to the lessor within one (1) month from expiry of lease. With the new amendments, the parties can also opt for express agreement of renewal which however cannot include any changes from the original agreement save for the increase mentioned in Article 4 of the Act which allows for a rent increase (up to 5%) and this, if expressly mentioned in the renewed lease agreement.
Registration of Private Residential Leases
Another notable change is the registration period requirement which has increased from ten (10) days to thirty (30) days from commencement of lease. Despite the extension, the lessor is not exempt from fines or criminal proceedings as established by the Act. Moreover, the lessor is now able to register a new lease with immediate effect in the case where the tenant abandons the property without notice. This allows more flexibility to the lessor and ensures that properties are not left vacant due to the default of the lessee.
Cap on Occupants in Private Leases
Another long-awaited amendment is cap on the number of residents in a dwelling house. In fact, on the 1st of September 2024, the ‘Limitation of the number of residents who may occupy a leased dwelling Regulations’ was published which regulations provide a schedule of the permitted residents, which schedule is being reproduced below:
By default, this means that lessees residing in a dwelling house (defined in the Act) which is leased to a number of residents who would not be living together as a family, irrespective of whether the said dwelling house would have been leased entirely, or by means of a number of residential spaces, shared by not more than ten (10) residents living together shall be permitted, provided that the number of residents, bedrooms and bathrooms correspond to the Schedule. The Housing Authority would determine the number of residents by requesting a declaration from the lessor of the number of bedrooms and bathrooms in the dwelling house being leased.
Substitution of the Lessee and Addition of a New Lessee
Substitution of lessees and additions of lessees is also now catered for in articles 9B and 9C of the Act as long as there is the express consent of both lessor and lessee(s). This means that the original lease agreement remains in force and no new lease is entered into. In the case of addition of a new lessee, the latter will be held responsible for any debts prior to his addition and shall also have the right to access the original lease agreement.
Inventory Upon Registration
The Amending Act has removed the requirement to include the amount of security deposit paid by the tenant. When it comes to inventory, the lessor must at all costs present an inventory list which should attest to the condition of the tenement and the state of furniture and domestic appliances supplied by the lessor. Interestingly, the inventory may now be presented solely in the form of photographs provided that these photographic depictions fully attest to the condition of the tenement. An inventory must still be provided even in the case where the tenement is leased out as unfurnished. Providing a detailed inventory list is clearly a step in the right direction to avoid disputes in relation to the condition of the tenement at the commencement and/or termination of lease.
Stricter Penalties
The Amending Act has introduced stricter penalties for non-compliance and the fines can now go up to €2,329.37. Examples of non-compliance include a lease without valid title such as in the case where the lease agreement is not registered in accordance with the Act. Another example would be in the case where the occupants exceed the number in the lessor’s declaration or where false declarations for any one of the purposes of the Act is made by any person.
New Definitions & Clarifications
A number of new definitions have been introduced including the definition of “building or “premises, “dwelling house” and “resident”. Of note, is the clarification given to “lease” which shall also include “sublease”. Moreover, an additional proviso has been added to the definition of “residence” which provides that where the tenement is being leased by a company for the purpose of accommodating its employees and the occupant is paying any form of consideration to the company, the relationship between the company and the occupant shall be deemed a sublease.
In conclusion, the introduction of the amending laws on lease have provided clearer guidelines, more accurate definitions as well as more equitable measures for the concerned parties involved in lease agreements.