22.02.06 / New Article
Peter Caruana Galizia's article - 'Hybrid Holiday Home' - is now online.
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BCGL Advocates expands its offices to include a new wing.
   
'Talking Point'
Peter Caruana-Galizia LL.D.

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Frank Salt (Talking Point 31st August 2004) believes that the general protection afforded to tenants against termination of the lease and increase in rent under what are commonly referred to as the rent laws can be gently phased out by co-operation between the government and the opposition.

He believes that the reason no party has tackled the issue whilst in government is purely one of losing the votes of the unprotected tenants to the other party. This argument may well be true in the hunting and trapping world, despite the growing numbers of voters who are actually alienated by this impasse, but there is much more to the preservation of the 1939 status quo than that. As a start, the issue should, like Gaul, be divided into three parts as there basically three types of leases which are protected: dwelling houses, commercial premises such as shops and warehouses, and any other urban property such as garages for private cars and secondary residences. Agricultural leases are yet another problem

The status quo in the case of dwelling houses is a social service managed by the state at the expenses of the owners and should the protection go, the state will have to re-house at its expense as many of the tenants survive on low pensions or social assistance. Hardly a short term option and even Dar Malta in Brussels may not be big enough. A more realistic approach would be for the state to allow for a reasonable rent established by an independent board or commission based on a combination of square metres, location and condition. The state can then subsidise the rent in those cases where the tenant, following a suitable means test, can not possibly afford that amount. The state will recover a substantial amount of the rent in tax in any case and the subsidy should not prove to be so painful to the government and ultimately the taxpayer.

The unfairness of it all, however, reaches its peak with commercial leases such as shops, stores and offices as in these cases the law is artificially reducing the tenant’s cost of sales and allowing him a bigger slice of his gross profit margin. There is no social justice at play here and there is unlikely to be much fall out on the government in that there are no families to re-house or tenants reduced to living below the bread line. Therefore not many votes are at risk. Here again, as perhaps the complete and sudden removal of protection may be too traumatic for our over-cosseted tenants, the fair and reasonable rent (and I do not mean 40% above 1914 levels as at present) could be again be established by an independent board or commission based on fixed and transparent criteria allowing for index linked increases and also ensuring some further limited protection against unilateral termination.

Many owners have more or less resigned themselves to not getting possession of their residential property back and harbour no desire of living in them especially when this is in depressed areas or old, uncomfortable, impractical and dilapidated. Or changed and split up beyond recognition by the Department for Social Housing. What is unacceptable is the ridiculous return coupled with the arrogance and abuses of many of the tenants, even more so when the tenant is actually the government.

Reform of the rent laws is not the end of the world for the party in government or the tenants. The justification of retaining post-war emergency legislation fades away with every passing year and market forces will eventually ensure a level and fair playing field.

This article appeared in the Times of Malta, September 2004.

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