Malta’s Rent Reform: How to Register a Residential Rental Contract

//Malta’s Rent Reform: How to Register a Residential Rental Contract

Malta houses

As part of the newly introduced rent reform, some lease contracts will need to be registered.

As from 1st January 2020 lease contracts for a primary residential purpose must be registered by the owner with the Housing Authority within ten (10) days from the commencement of the lease. The lease contract needs to be registered online on the website www.rentregistration.gov.mt.

The Private Residential Leases Act is only applicable for those lease contracts signed for a primary residential purpose and which were drawn up after 1st June 1995. As per the Act, a “private residential lease” is any long or short private residential lease including the letting of shared residential spaces entered into after the 1st January 2020 and any lease for a residential purpose entered into before 1st January 2020 which would still be in its original or renewed period on 1st January 2021.

The Act does not apply to tenements belonging to the Government on Malta, tenements let any tourist exclusively for tourist purposes, tenements not let for primary residential purposes and tenements let before 1st June 1995.

Registration of a lease contract is best done online using the E-ID or creating an online account through the above-mentioned website. Once logged in, a profile must be created for the individuals, companies or agents who are leasing the property.

In order to register a lease contract one must fill in the property details, tenancy details and details of the lessor and lessee. The signed contract and inventory list also need to be uploaded. Additionally, the lease Agreements which stipulate that the lease will be renewed annually, are required to renew their online registration accordingly.

A separate application is required for every private residential lease that is created and such registration shall be made subject to an administrative fee levied by the Housing Authority. The initial registration will be free charge during the year 2020. As from 2021, a fee of €10 will be charged.

A late registration Fee of €120 is charged if the registration of the private residential lease contract is not registered within 10 days from the signing of the lease contract.

No fees are due for the renewal of lease agreements if the lease contract specifies that the lease will be renewed automatically each year. However, in the case of lease agreements which upon termination are renewed, they need to be re-registered and a renewal fee of €5 shall apply.

All contracts shall be made in writing and shall include the following details:

  1. The tenement to be leased
  2. The agreed use of the tenement being let
  3. The period for which the tenement shall be let
  4. Whether such lease may be extended and in what manner
  5. The amount of rent that shall be paid and the manner in which such payment shall be made
  6. Any amount deposited by the lessee by way of security for the performance of his obligations and
  7. An inventory attesting the condition of tenement as well as state of any furniture and domestic appliances

In absence of one of more of these requirements, the contract shall not be registrable and shall be considered null and void.

The rent shall be freely stipulated between the parties. Rent increases may only take place once every year and may never exceed the previous rent consideration by more than 5%.

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The Act distinguishes between short and long private residential lease contracts.

Long Let private residential lease contracts

A long private residential lease contract cannot have duration of less than one (1) year. Any agreement stipulating a shorter duration shall be deemed to have been agreed for a period of at least one year provided it is not a short private residential lease or the letting of shared residential space.

In the case where the lease is for a period of less than two (2) years:

  • The first six months are mandatory for the lessee who may not withdraw from the lease;
  • Following the obligatory six months, the lessee may be released from the contract by giving at least one (1) month 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.

In the case where the lease is for a period of two (2) years or more but less than three (3) years:

  • The first nine months (9) are mandatory for the lessee;
  • Following the obligatory nine months, the lessee may be released from the contract by giving at least two (2) 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.

In the case where the lease if for a period of three (3) years of more:

  • 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.

Short Let private residential lease contracts

The term “short private residential lease” refers to any lease negotiated for the duration of six (6) months falling in any of the below categories:

  1. Non-resident workers who are employed for six months or less;
  2. Non-resident students pursuing short courses of less than six months’ duration;
  3. Non-residents who need to rent a tenement for less than six (6) months and who would not be seeking to establish ordinary residency in Malta;
  4. Residents who need to lease an alternative primary residence for a short period of less than six months.

The contract should identify the specific category within which the lessee falls. Otherwise, the lease is treated as a long private residential lease.

In the case of short private residential leases:

  • The first month of the lease is obligatory for the lessees;
  • 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.

As already outlined before, the provisions of the Act shall not apply to tenements let to any tourist exclusively for tourism purposes. The Act defines a ‘tourist’ as a person who is travelling to and staying in places outside his usual environment for not more than 1 year for leisure, business or other personal purposes other than by taking up employment to establish his business in the place visited.

However, if a property is registered as a holiday furnished premise in accordance with the “Malta Travel and Tourism services Act’, the Act shall still apply if the applicant does not qualify as a tourist.

Shared Residential Space

  • A 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.
  • 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.

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Disputes

Failing to register a lease may constitute a criminal offence leading to fines of up to €10,000.

To submit a dispute, a dispute form must be filled. The filled and signed forms must be physically submitted at the Housing Authority Offices (Address: 22, Pietro Floriani Street, Floriana, FRN1060).

The following fees apply:

Filing of any claim/counter-claim: €10.00

Filing of any reply: €7.00

Tenants failing to fulfil the rental agreement conditions, including missing monthly rent payments cannot be forcefully evicted by the landlord. The latter must bring the matter to the Rent Regulation Board.

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This information shall in no way be considered professional advice. For more assistance kindly contact us on info@csagroup.mt and we will get back to you shortly.

2020-06-10T07:01:13+00:00January 9th, 2020|

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