‘Historic’ new controlled leases law amending pre-1995 rent laws will commence on 1 June

The new controlled rent reform, approved by Parliament last Tuesday, will come into effect on 1 June and amend Malta’s pre-1995 rent reforms, Housing Minister Roderick Galdes announced on Wednesday.

The objects and reasons of the Rent Reform Bill are to revise controlled leases where the amount of rent paid to the landlord does not meet the proportionality test, whilst the maximum remains controlled however the amount is calculated on the market value of the premises at the time the rental amount is calculated.

As of 1 June, the law will come into place and affect around 10,000 families that have signed protecting leases before 1995.

This reform is “the biggest social reform in our country”, Galdes said.

The amended law will observe the concept of aging, meaning that special attention will be given to elderly citizens to ensure that they are not eradicated from their houses.

Additionally, landlords can increase the annual rent up to two per cent of the property’s market value.

Tenants, Galdes continued, will be safeguarded with a housing benefit that will cover the largest share of the increase in rent up to €10,000 yearly. Tenants in gainful employment will benefit from the rent subsidy issued by the Housing Authority , thus ensuring that no more than 25% of one’s income is spent on rent. The difference between this amount and the new rental fee will be covered by the subsidy.

Professionals and all the necessary help will be made available to tenants as well as landlords to tackle any pre-1995 rent issues.

Galdes also stressed the importance of the Rent Regulation Board, who will be regulating and deciding on the individual pre-1995 rent cases. The Board will ensure complete impartiality to both tenants and landlords, he said.

The reform is a “historic step forward” for Malta, Galdes said, and will strike a well-needed balance between the needs of landlords and tenants.

The Government will not stop with this amendment, but is strengthening the provision of adequate and affordable housing, Galdes added.

Galdes was joined by Dr Kurt Scerri and Dr Stefan Cutajar, who outlined the legislative details of the rent reform.