New rent regulations, taking effect as from 1st January 2020, aim to regularise the long term residential letting market in Malta and Gozo. Below we will focus on the most important points of these new laws regulated by the Malta Housing Authority.
You can view all the long term lets offered by deReday Gozo Homes here.
Who does it concern?
- All residential leases entered into on and after 1st January 2020.
- Residential leases to be renewed on and after 1st January 2020.
- Residential leases entered into after 1st June 1995 and which would still be in effect on 1st January 2021, whether with the original term or renewed. These must be registered by no later than 1 January 2021.
Which leases are exempt from these new regulations?
- Lease agreements entered into with the Maltese government.
- Lease agreements for accommodation rented exclusively for tourism purposes.
- Lease agreements for properties which will not be the Lessees main residence and can be classed as a secondary residence or holiday home.
- Lease agreements entered into prior to 1st June 1995.
Lease contracts registration
All agreements which fall under these regulations’ remit, as described above must be registered with the Housing Authority within 10 days from commencement of the lease by the Lessor or a representative such as an estate agent.
Registration fees are set at €10 for a new lease and €5 for a lease extension. No fees are due to the Housing Authority if the lease agreement specifies that said lease will be renewed automatically each year. N.B.: The Housing Authority is waiving fees for new leases during the year 2020.
Lease contract details
For a lease agreement to be valid, it must include the following;
- The lease rental period.
- The monthly rent and payment method.
- The deposit amount.
- An inventory of contents.
All the above must be included in the lease agreement, otherwise, it will not be possible to have it registered and will be considered null and void.
Monthly rents and price increases
Monthly rent prices are not regulated and parties are free to negotiate the monthly rent. There are however some regulations to keep in mind.
- Unless agreed otherwise, rent is to be paid on a monthly basis with Lessor providing Lessee with a receipt for each payment.
- Any advance payments cannot be more than the equivalent of one month’s rent.
- Unless there is a specific condition in the lease agreement rent cannot be increased.
- If rent is to be increased it is only possible once a year and such increase cannot exceed the increase in the annual property price index and can’t be more than 5% per annum.
Termination notice period
Any lease agreement signed must have a term of at least one year. If the landlord does not give termination notice at least three months prior to the expiry of the lease by registered mail, the lease will automatically renew for a period of one year.
The first six months of a one-year lease are mandatory for the Lessee, following which, the Lessee can be released from the contract by giving at least one month notice to the Lessor by means of a registered letter.
In the case of a two-year lease, the first nine months are mandatory for the Lessee. The minimum notice period (after the first nine months) is two months. Said notice must be served by registered letter.
If the lease is for three years or longer, the first twelve months are mandatory for the Lessee. The notice period (after the first twelve months) is three months, served by means of a registered letter.
If the Lessee terminates the lease earlier than described above, the Lessor has the right to forfeit the deposit paid in his favour up to the maximum of the equivalent of one month’s rent.
Typical invalid clauses in a lease agreement
- Any clause that provides for the automatic termination/cancellation of the lease agreement.
- Any clause that imposes additional payments by the Lessee such as the use of furniture and advance payments on utility bills. Communal areas fees, insurance and security deposit are allowed.
- Any clause that can limit the use of the property as a residence.
Things to note
The Lessor cannot forcibly evict the Lessee from a property which is the Lessee’s primary residence. It is also prohibited for the Lessor to enter the property without the Lessee’s permission, remove furniture and personal belongings or suspend utilities.
If the Lessee fails to follow the lease agreement conditions including remaining in the property after the expiration of said agreement the Lessor cannot forcibly evict the Lessee and must refer the matter to the Rent Regulation Board.
It is pertinent to note that the Lessee must still pay rent until the property is vacated.