On the 14th of July 2023, a legal notice titled “Expired or Expiring Emphyteutical Concessions Regulations 2023” (L.N. 161 of 2023), was published with immediate effect, introducing a system in which expired or expiring temporary or sub-emphyteutical concessions of land (whether residential, agricultural or commercial), which were originally granted by the Government of Malta or its predecessors in title, can be extended for a period of fifty (50) years.
These regulations apply to two types of emphyteutical concessions, namely, expired concessions where the Government has not yet taken back possession of the land, and expiring concessions set to expire no later than the 31st of December 2030. Empyteutical concessions (whether expired or expiring), which are not eligible under the regulations include:- (i) emphyteutical concessions approved by a special resolution of the House of Representatives; (ii) emphyteutical concessions which exceed 1,500 square meters (except for concessions of agricultural land); (iii) emphyteutical concessions granted for kiosks including ticket booths, street vendors, and mobile hawkers; (iv) emphyteutical concessions granted following a call for tender process; and (v) emphyteutical concessions granted on agricultural or rural land that fall within a development zone in accordance with local plans.
According to the regulations, in the case of an expired emphyteutical concession, an emphyteuta still in possession of the conceded land, shall submit an application with the Lands Authority within three (3) years from the date of entry into force of the regulations. On the other hand, in the case of a still to expire emphyteutical concession, an emphyteuta shall submit an application with the Lands Authority before the end of the empyteutical concession’s expiration. According to the regulations, each and every application submitted with the Lands Authority shall be supported by a declaration signed by the applicant, confirming that all the content of the application is correct and there are no other relevant facts, information or documentation which had they been known by the Lands Authority, would have led to the rejection of the application.
The Lands Authority shall have a right to reject any application it may receive in accordance with the regulations, and in such case, shall provide reasons for its refusal in writing. An applicant shall have a right to appeal the decision of the Lands Authority before the Administrative Review Tribunal established by article 5 of the Administrative Justice Act (Cap. 490 of the Laws of Malta).
New emphyteutical concessions granted in terms of the regulations shall have an annual ground rent calculated at two percent (2%) of the open market value of the land (free and unencumbered), established by independent architects. This annual ground rent shall be revised upwards by ten percent (10%) every ten (10) years. All costs incurred in obtaining the expert valuation and other costs related to the execution of the new emphyteutical concession shall be borne by the applicant.
In addition to the above, and solely in the case of applications submitted by emphyteuta whose emphyteutical concessions would have already expired by the date of application, the regulations prescribe that a singular lump sum payment shall be due by the applicants for their occupancy of the land from the date on which the emphyteutical concessions would have expired, until the date on which the new emphyteutical concession is published. The lump sum payment shall be calculated in accordance with the terms and conditions of the original concession.
It is to be noted that the regulations distinguish emphyteutical concessions or agricultural leases granted on agricultural land from the rest, and prescribe that, in the case of an expired or expiring emphyteutical concession which was granted on agricultural land where there are no farms built or buildings intended primarily for the keeping of cattle for rearing and fattening or any other domestic animals (i.e. arable land), the Lands Authority shall grant the same land to the applicant under a title of agricultural lease (qbiela) and the annual rent shall be established by the Lands Authority in accordance with the rates for agricultural leases.
On the other hand, in the case of an expired or expiring emphyteutical concession which was granted on agricultural land where there are farms built or other buildings primarily intended for the keeping of cattle for rearing and fattening or any other domestic animals, the Lands Authority shall grant an emphyteutical concession over the same land to the applicant, and the annual ground rent shall be established by the Lands Authority in accordance with the rates for ground rents on agricultural land.
By virtue of the coming into force of these regulations, emphyteuta in possession of emphyteutical concessions over residential, agricultural and/or commercial land, originally granted by the Government of Malta or its predecessors in title, which have expired or are soon to expire in the next seven (7) years, are afforded legal certainty on the future of their title over such land. These regulations also entitle those in scope to secure bank financing for investment into their land.