The New Private Residential Leases Act of 2019

The Private Residential Leases Act of 2019 (“the Act”)

Scope

Act number XXVIII of 2019, the Private Residential Leases Act of 2019 (“the Act”), has been enacted primarily to ensure fairness, clarity and predictability in contractual relations between lessors and lessees and to safeguard and protect the right to adequate accommodation.

Applicability

This Act applies to private residential leases that are entered into or renewed after the entry into force of the Act, subject to the following:

• Leases which were granted after 1 June 1995, and which are still applicable on the day of the entry into force of this Act should continue to be regulated exclusively by the provisions of the Civil Code, except in the cases specified under article 5 of the Civil Code.
• The Act should not apply to tenements belonging to the Government of Malta, tenements let to any tourist exclusively for tourism purposes, tenements which are not let for a primary residential purpose and tenements let before 1 June 1995.
• The Act does not apply to the letting of urban tenements where contracts of emphyteusis or sub-emphyteusis have been or are about to be converted into leases by virtue of law.

Registration

The Act sets the obligation to register private residential lease agreements, including their renewal, whether expressed or tacit. If the lease agreement is not registered, it is considered to be null and void. The registration has to be effected within ten days of the commencement of the lease. In cases of default, an administrative fee will be charged.

Private residential leases which were entered into after the 1 June 1995, but before the coming into force of the Act, and which would still be in force on the 1 January 2021, whether in their original or renewed term, should be registered, provided that the obligation to register should also apply to any lease that is renewed beyond 1 January 2021. The registration requires the declaration of any amount deposited by the lessee by way of security and the presentation of an inventory.

The Housing Authority is empowered to introduce and enforce minimum standards of habitability for tenements which are offered for letting.

Requisites of a lease agreement

The Act also includes the requisites that need to be included in the lease agreement, including the use of the tenement, the duration and whether the lease may be extended. In the absence of any one of the essential requisites, the lease agreement will be deemed null and void.

Interestingly, the Act also outlines the forbidden clauses, which include clauses that stipulate the payment of a fixed amount separate from the rent, for the consumption of water, electricity or other utility services if such amount does not reflect the actual consumption of such utility services by the lessee calculated at the rate reflecting the primary residential use of the tenement and the total number of occupants residing therein.

Private residential lease

A long private residential lease cannot be less than 1 year in duration, provided that this does not apply to short private residential leases or the letting of shared residential space. A private residential lease should cease to have effect upon the expiration of its term, provided that the lessor gives notice to the lessee at least 3 months beforehand by registered letter. This is not applicable to short private residential leases, or letting of shared residential space.

A short private residential lease should cease to have effect by operation of article 1566 of the Civil Code.

Rent

The rent should be freely stipulated between the parties and the rent increases may only take place once every year. In the absence of any expressed agreement, the rent cannot be revised during the term of the lease, given that yearly increases may not exceed the annual variations recorded in the Property Price Index published by the National Statistics Office.

Shared residential space

The Act also provides for the letting of shared residential space, whereby any agreement entered into for the lease of a shared residential space should be of a 6 month-duration.

Monitoring and enforcement

Part III of the Act refers to monitoring and enforcement. Housing Authority officers, and with the assistance of the Police Force (if required), should have the right to enter the private tenement, to verify whether the tenement is being occupied by any person, or to take any photographs after entering or request any legitimate information from any occupier of such tenement, provided that such access should enquire the prior issue of a warrant signed by a Magistrate.

Adjudicating Panel for private residential leases

The Act establishes an Adjudicating Panel for private residential leases with exclusive jurisdiction to decide disputes relating to private residential leases to which the Act applies, in so far as the claim does not exceed the value of Eur 5,000 on matters identified in article 23(2) of the Act. The Adjudicating Panel should only hear claims relative to registered contracts.

Every claim filed before the Adjudicating Panel should be made in writing. The defendant will have ten days to file his reply. The Adjudicating Panel should deliver judgement within the shortest time possible but not later than 5 working days from the date of the last submission by the parties, the witnesses or the experts, as the case may be.

Appeal

Any aggrieved party by a decision of the Adjudicating Panel may appeal within twenty days from the date of the decision of the Adjudicating Panel on a point of law to the Court of Appeal.

GMX Law Firm

GAUCI-MAISTRE XYNOU Legal can assist you with further legal and judicial advice on matters pertaining to lease agreements, including the drafting of lease agreements.