Introduction to the Private Residential Lease Act
With the introduction of the Private Residential Lease Act 2019, as from January 2020, any residential lease contract must be registered within 30 days from their commencement, subject to an administrative fee. You can do so online www.rentregistration.gov.mt
A contract of lease is only registerable if it includes the requisites found within the Civil Code;
1. Property address and description
2. Rental period
3. The agreed use of the property
4. Whether the lease can be extended and in what matter
5. The rental fee and how this will be paid
6. The amount required as a deposit by the lessee by way of security, for the performance of his obligations
an inventory attesting the condition of the premises as well as the state of any furniture and appliances supplied by the lessor.
The following clauses (Forbidden Clauses) which are inserted in a private residential lease contract, shall be deemed to be without effect and therefore null:
1. clauses providing for automatic termination other than non-fulfilment of lessee’s obligations (no clause is permitted that automatically terminates lease if lessee is in default of payment),
2. clauses which authorise lessor to reduce, without equivalent consideration, any benefits stipulated in the contract,
3. clauses that exempt lessor from any of the responsibilities to which he is bound by law
4. clauses which impose the payment of additional considerations other than the rent, the deposit, the insurance on contents and contributions in accordance with Condominium Act,
5. clauses which impose on lessee any additional consideration for the use of the movables, beyond the payment of rent for use of dwelling,
6. clauses which stipulate the payment of a fixed amount, separate from rent, for the consumption of water/electricity/other utility service 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,
7. clauses which limit the use which one is expected to make of a residence.
Long Private Residential Lease
A lease negotiated for a primary residential purpose shall be for a minimum period of 1 year. The only two exceptions to the minimum 1-year period are “short private residential leases” and “room rentals”.
Tenants may withdraw from such leases by means of a registered letter after the lapse of 2, 4 or 6 months, depending on whether the lease is contracted for a period of less than 2 years, less than 3 years, or more than 3 years respectively. If the landlord does not notify the tenant 3 months before the date of expiration of the lease by means of a registered letter, a long private residential lease shall be automatically renewed for a further period according to the terms of the original lease.
Short Private Residential Lease
A lease negotiated for a duration of less than six months that can only fall within the hereunder scenarios. The contract must stipulate under which category the contract is being entered into under pain of nullity.
(a) non-resident workers who would be employed either for a period under 6 months or to complete a specific task within a maximum period of 6months;
(b) non-resident students enrolled in courses inferior to 6 months;
(c) residents who would need to rent an alternative primary residence for a period of less than 6 months;
(d) non-residents needing to rent a tenement for a period of less than 6 months, provided that they would not be seeking to establish their long residence in Malta.
Rent may increase according to property inflation and only if there is an express provision in the lease, but in any case, the increase cannot be more than 5% .
Fines and Nullity of Contract
Failing to abide by an enforcement notice, (to regularise the anomaly of not registering the contract ) issued by Housing Authority or the making of a declaration for any purpose of the Act which is false, will constitute an offence, leading to a fine ranging from €2,500 and €10,000.
The legal status of an unregistered lease remains unclear. The Act stipulates that an unregistered lease is to be considered “null” imposes an additional fee for late-registrations. It also provides the tenant with the possibility to register the lease himself if the landlord fails to do so.
Moreover, the Act goes on to state that an unregistered lease shall be considered a de facto lease, whereby the Housing Authority is empowered to issue an enforcement notice in relation to it, forcing the landlord to comply with the law. The possibility of a late-registration fee and the possibility for the tenant to enforce the registration himself, implies that a de facto lease is not actually “null”, but rather “irregular” and “prohibited”.
This new legislation places a burden and useless admin and bureaucracy on the Landlords, especially when dealing with short lets. Time will tell how well people will respond to this and whether they will actually conform with the requirement of contract registration.