Last Updated on Thursday, 4 March, 2021 at 8:59 am by Andre Camilleri
The Malta Business Weekly spoke to Michael Bonello, Chief Executive Officer of Alliance Real Estate Group and Head of MDA’s Estate Agents Section, regarding the recent rent reforms announced this week.
On Saturday, as part of a major reform centred on pre-1995 rents, Prime Minister Robert Abela announced that landlords of properties bound under pre-1995 rents would be able to claim up to 2% of the property’s market value in rent.
Are you in agreement with the recently proposed rent reforms?
Yes, of course, considering the fact that parts of our current rent laws are deemed to be unconstitutional in their present form, I think that you cannot but fully agree with these very relevant suggestions that propose to fix this long-standing situation.
Were you involved with the consultation process?
Yes, with the Estate Agents section of the Malta Developers Association, which I am now heading, I have been involved in various meetings where this topic was discussed on different occasions.
In your position, how are they being received?
These proposals were just announced this weekend, and I do not have sufficient feedback on how they have been received so far. There are still many details that need to be clarified and in something as complex as this, every case is different, so we need more time to evaluate things with responsibility. Government is signalling a definite determination to balance out the different and sometimes conflicting interests and change the situation for everyone’s benefit. How this will work in practice remains to be seen.
The PN stated “it’s too little too late”, do you agree?
We are not yet in a position to know how wide-ranging and effective these announced reforms are going to be, but in my opinion, we must appreciate that some action is always definitely better than none. Over the past several decades, we have had different legislatures of various political beliefs that left the pre-1995 rent situation lingering to reach the stage we are in today; and now that we have some definite movement on this, even if some tweaking may be necessary in the future, at least things seem to be moving in the right direction.
If so, what could have been done differently, in your opinion?
Primarily, I would say all this should have been addressed head-on years ago. Even Dr Abela himself is quoted as admitting “the state’s failure to act quicker and more decisively”. Anyway, now we are here let us see how things will work in practice.
What will happen to those individuals and families negatively impacted by the reforms, or who may be not in a financial position to accommodate such changes?
This has been the most challenging part of this crisis and probably the reason why such decisive action has been delayed for so long. According to news reports I’ve read so far, the Prime Minister has pledged the Government’s full support for social welfare beneficiaries and pensioners so that any negative impact on them will be nullified, and this is estimated to cost Maltese taxpayers about €9 million over the next three years. Not only will Government be paying 100% of the tenants’ rental cost increase up to €10,000 each, but those affected by the change will also be offered help and free legal advice by a new department to be set up within the Housing Authority.