Navigating Long Term Rental Agreements in Malta: A Quick Guide for Tenants and Landlords

Renting a property in Malta involves a unique set of considerations, shaped by local legislation and market norms. Understanding the Malta Rent Laws is crucial for both tenants and landlords to ensure a fair and legally sound rental experience and minimise risks.

In this latest edition of The Property Pulse we will delve into some of the specifics of renting in Malta, outlining the advantages, potential pitfalls, and red flags within the framework of local rent laws.

For Tenants who are looking at finding the Right Home in Malta

Advantages:

1. Legal Protection: The Malta Rent Laws provide tenants with certain protections, including stipulations on rent increases and notice of eviction procedures. It pays to familiarise yourself with the various options or to use a competent agent who can guide you. Check out some of the non-negotiable terms at the end of this article which you MUST know.

2. Flexibility: Renting offers the freedom to choose your living situation based on current life circumstances without long-term commitments.

Pitfalls:

1. Rental Market Fluctuations: The Maltese rental market can be volatile, with prices fluctuating based on tourism and expat demand. Ensure your lease agreement has clear terms regarding any rent adjustments within the confines of the law.

2. Utility Bills: Some properties may have higher utility rates due to agreements predating 2014. Confirm the applicable rates before signing the lease and ensure that the proper forms are attached to the service provider to get the best rates.

Red Flags:

1. Lack of a Written Lease: Verbal agreements are challenging to enforce. Ensure you have a written lease, as mandated by Malta's rental laws. If the agent or landlord suggest a verbal agreement RUN.

2. Unregistered Rental Agreements: Landlords are legally required to register rental agreements with the Housing Authority. Unregistered agreements could lead to legal complications. Luckily the law allows the tenant the possibility of registering the contract himself should the landlord refuse.

For Landlords: Leasing Your Property in Malta

Advantages:

1. Profitable Market: With a strong demand from locals and expatriates, renting out property can be quite profitable. Keep maintenance costs in mind, an annual tax of 15% flat rate and your spend of fixtures, fittings and furnishing which need to be replaced from time to time.

2. Asset Appreciation: Property in Malta generally appreciates over time, offering landlords long-term capital gains.

Pitfalls:

1. Regulatory Compliance: Landlords must adhere to strict regulations, including registering the lease and ensuring the property meets specific standards.

2. Tenant Rights: Maltese law protects tenants from sudden eviction and excessive rent increases, requiring landlords to navigate these restrictions carefully.

Red Flags:

1. Incomplete Tenant Screening: Failing to thoroughly vet tenants can lead to issues with rent collection and property maintenance.

2. Ignoring Maintenance Requests: Tenants are more likely to respect a well-maintained property. Neglect can lead to larger issues and tenant dissatisfaction.

A more detailed look at the terms in Maltese Rent Laws for Tenants and Landlords.

Contracts must be registered at a fee and within a specific timeframe otherwise they will be considered null at law.

For private residential leases, the landlord must register the contract within 10 days of commencement of the lease agreement. Otherwise the tenant can register the contract himself and retain part of the rent for the reimbursement of the administration fee.

A separate registration is required for every new private residential lease.

Contract needs to include details of:

• Rental period
• Whether the lease can be extended and in what matter
• The rental fee and how this will be paid
• The amount required as a deposit
• An inventory of the property in question (to make any disputes easier to tackle)

If any of these requirements are missing the contract cannot be registered and the Housing Authority could declare it null and void.

Contract cancellations and notice periods

Long term leases cannot have a duration of less than one year. The lease shall cease to have effect upon the expiration of the stamp, as long as the landlord gives notice to the tenant of at least three months through a registered letter.

If the landlord does not give the tenant a notice of termination within this time period, the private residential lease will be automatically considered renewed at law for a period of one year.

For one-year contracts, the tenant has the right to cancel the contract after 6 months with a notice period of 1 month. For contracts of 2 years the notice period is doubled and 3 years or more – 3 months.

The tenant may not withdraw before the lapse of the Di Fermo period as follows:

• 6 months if the lease is for a period of less than 2 years
• 9 months if the lease is for a period of two to three years
• 12 months if the lease is for a period of more than 3 years

If the tenant opts to cancel the rental agreement before these periods the landlord can retain an amount not exceeding one month’s rent from the deposit left as security. The tenant is required to withdraw from such leases by means of a registered letter.

Rent Prices and Increases

The new rent regulations do not impose any restrictions on the price for rent but is left in the hands of the parties involved in the negotiations. Rent is usually paid on a monthly basis (in advance) and under no circumstances may the landlord require the advance payment of more than one month’s rent. The landlord is also obliged to provide the tenant with a receipt of payment.

Rent may only be increased if there is an express provision in the lease agreement, and if so, it may only be increased once a year.

The increase may not exceed the annual variations recorded in the property price index as published by NSO and cannot exceed the previous rent by more than 5% per annum.

Forbidden Clauses

Clauses which, even if inserted in the contract, would be deemed to have no legal effect, include:

• Clauses for which provide for the automatic termination of a contract
• Clauses which authorise the lessor to reduce any benefits without a reduction in rental
• Clauses which impose the payment of additional considerations other than the rent, deposit, insurance on contents or maintenance of common parts limited to the duties of the lessee.
• Clauses which impose payments for the use of movables
• Clauses which stipulate the payment of the fixed amount of consumption for water, electricity and other utilities if such amount does not reflect the actual consumption
• Clauses which limit the uses which one is expected to make of a residence

Additional right for tenants

The new rent rules make it a criminal offence for a landlord to forcefully evict the tenant from a property which the latter occupies as his primary residence. This only applies in the case of rental agreements covering private residences, but not in the case of room renting.

Landlords who infringe such rule are subject to fines ranging between €1,500 and €4,000 – extending to unauthorised entry into the property, removal of furniture or personal belongings from the property, and the suspension or interruption of water and electricity services. Tenants are also being provided with access to their utility bills directly through the local energy provider ARMS Ltd.

In such instance the landlord must bring the matter before the appropriate Rent Regulation Board.

The tenant will nonetheless be bound to pay the landlord an amount equivalent to rent until he evicts the property. A demand for such compensation may be made simultaneously with the demand for termination of the lease and/or for the eviction of the tenant from the rented residence.

Both tenants and landlords in Malta must navigate a rental landscape that is shaped by specific local laws and market conditions. Understanding and respecting these legal stipulations, while also being aware of the broader aspects of rental agreements, can lead to a successful and stress-free rental experience.

Always consult with an Licensed Agent for the most accurate and personalised advice on all your real estate requirements.

***

For more information on buying, selling or renting, residential or commercial properties in Malta get in touch with me on ??99497735 or or at the details below.

RE/MAX Advantage Msida, University Roundabout Msida?

?? 21 222 123??? [email protected]

Licensed Real Estate Agent and Broker in Malta since 2008

Follow my Socials on?www.Linktr.ee/clivedemicoli?

#malta #RealEstate #remax #homes #islandlife #property #luxury #luxuryhomes #team #joinremax #luxuryliving #architecture #style #design #Licensed #Agent #Realtor #ForSale #HomesForSale #property #Investment ?