New Rental Reforms for both landlords and tenants.
As of the 1st January 2020, Malta is seeing new regulations with rental contracts.
With the implementation of these new regulations, the government is ensuring more stability in this industry. The new laws not only cover rental contracts but also regulates the minimum and maximum rental periods and notice periods.
Landlords must register the rental contracts the with the Housing Authority within 10 days from the commencement of the lease. The contract needs to be registered online on the website www.rentregistration.gov.mt
Which leases fall under the new regulations?
- Rental agreements of residential property entered into or renewed after 1st January 2020
- Rental agreements of residential property entered into after 1st June 1995 and still in effect after 1st January 2021
Which leases are not affected by the new regulations?
- Rental agreements entered into with the government
- Rental agreements of property rented exclusively for tourism purposes
- Rental agreements of property rented as a second residence or as a holiday home
- Rental agreements of property entered into prior to 1st June 1995
What are the obligations of the lessor and lessee?
All contracts as per above stated must be registered otherwise they will not hold any legal grounds and a fee must be paid.
Contracts for Long lets (not less than 1 year)
- The first 6 months are an obligation for the lessee to rent the property
- After the 6 months, the lessee can be released from the contract by giving at least 1 month notice by means of a registered letter.
- If the lessor does not intend to renew the lease, the lessee must be informed three months prior to the termination of the contract by means of a registered letter.
- If the lessor fails to notify the lessee within the established period, the lease is renewed automatically for a year.
- The obligation of contract is for one year but the lessor and lessee may agree on a longer lease contract.
Contracts for more than 3 years
- The first twelve months (12) are mandatory for the lessee;
- Following the obligatory twelve months, the lessee may be released from the contract by giving at least three (3) months’ notice to the lessor by means of a registered letter;
- If the lessor does not intend to renew the lease, the lessee must be informed three (3) months prior to the termination of the contract by means of a registered letter;
- If the lessor fails to notify the lessee within the established period, the lease is renewed automatically for a year.
Contracts for short lets (6 months duration)
Short let contracts apply only for the following;
- Temporary foreign workers who are employed for six months or less;
- Students pursuing short courses of less than six months’ duration;
- Foreign lessees who would not be seeking to establish ordinary residency in Malta;
- Maltese lessees who need to lease an ordinary residency for a short period of less than six months.
The actual contract
- The lease duration is six months;
- The first month of the lease is obligatory for the lessee;
- Following the obligatory month, the lessee may be released from the contract but is obliged to give at least one week’s prior notice to the lessor by means of a registered letter;
- The contract cannot be renewed.
Shared Residential Space
Lease of a shared residential space means the lease of a separate space in an apartment or building, with shared amenities like the kitchen and bathroom facilities.
Explanation of a shared residential space lease
- The lease duration is six months;
- The lessee may be released from the contract at any time by giving one week’s prior notice to the lessor by means of a registered letter;
- The contract cannot be renewed
Registration Fees
Normal Registration Fee: €10
Normal Registration will be free of charge during year 2020.
Late Registration Fee: €120
Late Registration Fee applies if the registration of the private residential lease contract is not registered within 10 days from the commencement of the lease contract.
Renewal of Agreement Fee: €5
Lease agreements which upon termination are renewed, need to be re-registered and the renewal fee of €5 applies.
No fees are due for the renewal of lease agreements that in the contract specify that the lease will be renewed each year.
Fines applied
For those non conforming with the new Act, can face fines of between €2,500 and €10,000.
The Act can also enforce fines of €1,500 and €4,000 against landlords who attempt to block water and electrical services to the property, or removal of furniture, appliances or personal belongings.
The Housing Authority would have the power to issue an enforcement order and fine of €5,000 against a person found guilty of living in a property and is not registered under the Act.
For further information visit our office in St.Paul’s Bay or contact us on 2010 5070
