January 2020 saw the introduction of the latest legislation governing the rental of residential properties in Malta. The rental legislation introduces new duties for both tenants and landlords, such as the registration of the rental contract and contract terms. It is solely regulated by the Housing Authority. Engel & Völkers Malta CEO, Benjamin Tabone Grech who took an active part in the rental reform, has welcomed the new reform, stating that it is a good step towards increasing professionalism and stability in the sector, which will reduce abuse.
When do the new regulations come into force?
The Private Residential Leases Act came into effect on January 1st 2020
What contracts do the new regulations cover?
The 2020 rental regulations cover all rental contracts signed after June 1st 1995. All property owners who are renting their property for a primary residential purpose have to register these properties with the Housing Authority.
What contracts are excluded?
The new rental regulations exclude:
- Properties owned by the Maltese Government
- Properties rented for the sole purpose of tourism
- Properties under contract of Emphyteusis (Properties that are let by landlords for long lets and are structurally improved by the tenant)
- Properties rented out as holiday homes or as a second residence.
- Properties rented before June 1st 1995.
What is the difference between short term and long term rental contracts?
Short term contracts are contracts with a duration between 6 months and 1 year. These include non-resident workers who are employed for a period less than six months , non-resident students who are enrolled in courses for less than six months, residents who need to rent alternative primary residence for a period of less than six months, and non-residents who need to rent a tenement for a period of less than six months provided they would not be seeking a to establish long residence in Malta.Short lets contracts need to specify which one of these categories applies to the contract and provide supporting documentation.
Long- term contracts are those with a duration of one year or more.
What are the new duties for which landlords are accountable?
Landlords are required by law to register private rental contracts within 10 days. The contracts as well as the deposit have to be registered with the Housing Authority. They can also be registered online via this link: https://rentregistration.mt/ To register the contract online, one needs to set up an account or else log in with the E-ID.
Every new private residential lease requires a separate registration. Rental contract renewals taking place after 1st January 2021 also need to be registered.
Landlords are bound to ensure that there is an adequate supply of utilities (water and electricity) and show the correct tariff and bills proportionately shared amongst tenants.
What should the Rental Contract comprise of?
The rental agreement should state:
-The rental duration and whether and how this can be extended.
-An inventory of the property eg. furniture and appliances available and their current state
-The rental amount and deposit fee
-The intended use as agreed
If any of these elements of the contract are not established, it will be considered void.
A sample contract can be downloaded from the following link https://rentregistration.mt/forms/
How do the new regulations affect rental prices and payments?
The new regulations state that rent increase can happen only once a year and can’t be more than 5%. (in line with the Property Price Index issued by NSO)
Rent is due to be paid monthly, unless otherwise is agreed, and the landlord cannot ask for payment in advance of more than one month’s rent under no circumstances. A receipt of payment from the landlord to the tenant is also obligatory by law.
Is there a cost to registering contracts?
In 2020 registration of rental contracts is free of charge (as long as it is registered within 10 days). The fee will amount to €10 from 2021.
Contracts which are not registered within 10 days incur a late registration fee of €120
For agreements which are to be renewed, the fee is €5, unless the agreement specifies that the lease will be renewed every year. In this case, no fees are due.
Failure to pay these fees will result in the contract being considered void.
Can a tenant report a tenancy?
Yes, tenants can report a tenancy via this website. https://rentregistration.mt/reporting-a-tenancy/
What duties do tenants have?
Tenants have to concede to a strict notice term if they wish to withdraw from a long term rental contract.
In the case of a one year contract, the tenant has an obligatory 6 month period where the contract cannot be cancelled, following that, one needs to give a minimum 1 month’s notice. In the case of a two year contract, the tenant has an obligatory 9 month period where the contract cannot be cancelled, following that, one needs to give a minimum 2 months’ notice. For contracts of three years or longer, the tenant has an obligatory 12 month period where the contract cannot be cancelled, following that, one needs to give 3 months’notice.
Notice of termination has to be sent via a registered letter.
What new rights do tenants have?
A landlord cannot forcefully evict a tenant from a property which is occupied as a primary residence by the tenant. Tenants also have access to utility bills.
What fines can be incurred?
The following fines can be incurred
- Fines for renting out or occupying property for residential purposes which does not conform with the requirements of the act can amount to between €2,500- and €10,000
- Landlords who attempt to block utilities such as water and electricity or who remove furniture, appliances or personal belongings can incur fines between €1,500 and €4,000
- Persons found guilty of living in a property that is not registered under the Act can be liable to an enforcement order issued by the Housing Authority and fined €5,000.
Can a rental contract be terminated?
No, a rental contract cannot be terminated at any time. In order for the contract to be terminated, notice must be sent 3 months before the contract expires. If the tenant does not get the letter within this time, the contract will be renewed for one more year.
In the case of short term leases, these are terminated on the date that is agreed, without either tenant or landlord needing to give notice.
What is a Shared Residential Space
The new rental regulation makes provisions for the rental of shared residential space. This is the leasing or renting of a separate space in a building with shared amenities. In such cases, lease duration is of 6 months and the contract cannot be renewed. The contract can be cancelled at any time during this period given that one week of notice is given via a registered letter.
What services do Engel & Völkers Malta offer to smoothen the transition to the new regulations?
Engel & Völkers agents are available to help you out with any queries or concerns that you might have about the new rental regulations, whether you are a tenant or whether you are looking for a property to rent. Our agents are also happy to register the rental contract on your behalf. We also offer the service of compiling the inventory.
Triq in-NegozjuBKR 3000 MriehelMalta
Phone +356 2347 0000Fax: +356 2347 0199