Reforms in Maltese Residential Leases: ACT No. XX of 2024

On the 18 June, 2024, the Government Gazette of Malta published ACT No. XX of 2024, marking the introduction of several amendments to the Civil Code (Chapter 16 of the Laws of Malta) and the Private Residential Leases Act (Chapter 604 of the Laws of Malta). These amendments introduce a series of changes intended to provide clearer guidelines and protections for both lessors and lessees, longer timeframes for lease registration and further develops the legislation surround the renewal and termination process of leases, among other considerations.

There haven’t been many changes to the Civil Code. However, in relation to pre-1995 leases, when the tenant requires permanent institutional care or hospitalization, resulting in the tenant no longer using the leased property, such tenants will now be treated as if they had died. This would result in the pre-1995 lease being regulated by the applicable laws on the matter, further ending debates on the transfer of such leases. Additionally, the Act mandates that lessors must give a minimum of three months’ notice before terminating a lease if they intend to reclaim the property for personal use or if the property is to be sold, if expressly stipulated in the lease agreement.

The main changes introduced affect the more recent Private Residential Leases Act. Lessors are now required to register private residential lease agreements with the relevant Authority within 30 days of commencement, an increase from the previous 10-day requirement.  Moreover, the Act specifies that inventory lists must now include photographs with descriptive captions, regardless of whether the property is furnished or unfurnished. This thorough documentation helps to prevent disputes over the condition of the property and its contents at the beginning and end of the lease term. Interestingly the inventory list may now be presented solely in the form of photographs, provided these photographs clearly, fully, and unequivocally attest to the condition of the tenement and any supplied furniture and domestic appliances.

The new legislation empowers the Minister to set minimum habitability standards for leased properties, including limits on the number of occupants. The Authority is prohibited from registering any lease agreements that do not meet these standards. This measure is intended to improve living conditions for tenants and ensure that properties are maintained to a certain standard.

 ACT No. XX of 2024 introduces several changes to the renewal and termination of leases. The Act allows for express renewals of leases, meaning that both parties can explicitly agree to renew a lease under the same terms, except for the permissible rent increases. This prevents lessors from making significant changes to the terms of the lease without the tenant’s consent.

Furthermore, the Act provides clear guidelines for the substitution or addition of lessees, through the introduction of several new articles, an aspect previously not catered for. With the consent of the lessor and other lessees, new tenants can be added to the lease agreement without creating a new lease or interrupting the legal periods of the existing lease. This flexibility is particularly useful for shared living arrangements.

In cases where a tenant abandons the property without notice or the lease is mutually terminated, the lessor can now register a new lease for the property immediately. This provision ensures that properties are not left vacant and can quickly return to the rental market.

The Act also enhances the enforcement powers of the relevant Authority. It introduces stricter penalties for non-compliance, such as occupying a property without a valid lease agreement or failing to register a lease. Administrative penalties can now reach up to €2,329.37, ensuring that landlords adhere to the legal requirements.

In conclusion, ACT No. XX of 2024 represents a comprehensive effort to modernize and regulate the private residential lease market in Malta. By introducing clearer guidelines and stronger protections for both tenants and landlords, the Act aims to create a fairer and more transparent rental market. This legislation is a significant step forward in ensuring that all parties involved in rental agreements are treated equitably and that their rights and obligations are clearly defined.