Malta's New Rent Regulations for Tenants and Landlords
As of January 1st, 2020, Malta saw the introduction of new rent regulations and laws, with a particular focus on the duration of rental contracts. The regulations were implemented with the aim of bringing stability to the rental property market.
The new laws and regulations revolve around the reform of the private residential lease agreement for properties that will be let out to tenants working or studying in the Maltese Islands. The new laws mandate that landlords are required to register their rental properties with the Housing Authority. In an effort to protect both the tenant and the Landlord the new laws also impose strict terms on the residential lease contracts as well as the conduct of both the landlord and the tenant.
Which rental contracts are covered by Malta’s rental laws & regulations?
As the new laws and regulations came into effect on the 1st of January 2020 the following contracts entered into are covered by the new reform;
- Residential rental agreements are signed or set to be renewed by or after the 1st of January 2020.
- Residential rental agreements entered into after the 1st of June 1995 that are still in effect after the 1st of January 2021.
Which rental contracts are not covered by Malta’s rental laws & regulations?
The following contracts are not covered by the new reform;
- Rental agreements entered into with the Maltese government or seasonal short holiday lettings to tourists.
- Residential rental agreements of property rented as a second property of residence or as a holiday home.
- Residential rental agreements entered into prior to the 1st of June 1995.
What are the regulations & laws pertaining to rental agreements in Malta?
There are a number of new rules and laws that come with the rental reform, below is a breakdown of the new regulations that have been signed into law.
Registration of the residential rental contract
A lessor is required to register the rental contract entered into with the tenant within ten days from the signing of the contract. Failure to do so could result in a number of fines issued to the lessor. The lessee is also well within their right to contact the Housing Authority and register the rental contract should the lessor fail to do so.
Termination of the residential rental contract
Under the new laws neither the lessor or the lessee may abruptly terminate the rental contract. Should either party wish to terminate the contract due process must be followed.
Should the landlord wish to terminate the contract then notice is to be sent to the tenants in writing via registered mail. The written notice must be sent no later than three months before the expiration of the contract.
The tenant will also have to give written notice to the landlord should they wish to terminate the contract, however, when the notice is given by the tenant depends on the duration of the rental contract. Should the duration of the contract not exceed 12 months the tenant may submit a one month notice after having stayed in the premises for a minimum of 6 months. In the case of a 24 month contract the tenant is required to submit a two month notice after nine months have passed and in the case of a 36-month contract or more a three-month notice can be given after 12 months have passed.
Should neither party give notice of termination the contract will automatically be renewed by the Housing Authority for another 12 months. The above terms for termination do not apply if either party has broken their contractual obligations. In cases of breach of contract, the Housing Authority should be approached.
The new reform also states that tenants need to pay the landlord for the extra days that they reside in the property. This would be worked out as an equivalent rent to the number of days overdue.
When it comes to short-term leases, the contract terminates on the agreed date between the tenant and the landlord. A notice does not need to be given here by either party.
Utilities, rent & rent increases
The new rental legislation states that the cost of rent needs to be agreed upon and stipulated in the contract along with a detailed outline of what the tenant is renting and what areas are deemed shared spaces or common areas. The new laws also prevent landlords from increasing the rent more than 5% at a year and no more than once annually.
Utilities are paid in addition to the tenant's monthly agreed upon rental rate unless otherwise stated. Utilities are paid either on a pro rata basis to the landlord, or directly to the utility’s ARMS company. Tenants do not require the permission of the landlord to approach the utility company.
In addition, landlords also need to provide an inventory of the contents in the rental space such as appliances, kitchen equipment and the condition of the furniture. If this list is not provided, the contract is void. It is in the best interest of the tenant to go through the content and inventory list with the Landlord and confirm all of the contents and their condition.
Fines issues in accordance with Malta’s rental laws & regulations
Anyone who is found to have not conformed with the requirements of the Act can face a fine of €2,500 up to €10,000. Landlords who attempt to block electrical and water services to the property, or who issue the removal of appliances and furniture, can also be fined €1,500 up to €4,000.
For anyone who is found guilty of living in a property that is not registered under the act, the Housing Authority has the right to issue an enforcement order and a €5,000 fine.
Where can you register a residential rental agreement?
If you would like to know more about Malta’s rental reform, our team of experts at Malta Sotheby’s International Realty would be more than happy to assist you. Speak to one of our members today.