Landlords Pulling Out Of Malta’s Rental Market Because Of New Law, Developers’ Lobby Head Warns
Several landlords have reacted to a new rent regulation law by pulling their properties from the rental market entirely, Malta Developers Association head Sandro Chetcuti has warned.
Chetcuti told Lovin Malta that the MDA, which represents landlords, has conducted market research among notaries, banks, the tax authorities and estate agents and has tangible data which proves that buy-to-let sales are decreasing and that many landlords are trying to sell properties they used to rent out.
He dismissed an allegation by an informed source who told Lovin Malta that the MDA’s opposition to the rent law stems from its desire to protect big players, rather than everyday landlords.
“We don’t want to protect the few big people, far from it,” he said. “We represent normal landlords, many of whom used to invest in bonds and who have now bought apartments to rent out.”
Sandro Chetcuti
Chetcuti said the MDA has absolutely no problem with the law’s stipulation that obliges landlords to register their rental contracts with the Housing Authority but rather with the fresh bureaucracy and conditions imposed on landlords.
As per the new law, landlords can only increase rent prices by a maximum of 5% per year, must give tenants three months notice before evicting them and must provide the state with a detailed inventory of their property, including the condition of furniture.
“The government shouldn’t interfere in the agreements between landlord and tenant, it should just ensure that rents are registered so it can obtain tax income from them,” Chetcuti said.
“There can also be incentives for long-term letting so prices don’t get inflated, but I think the market has already stabilised now. There’s so much supply that if all this bureaucracy is removed, the market will find its level by itself.”
“If we keep introducing new restrictions and excess bureaucracy, we’ll reduce the supply once more which will defeat the purpose of the law.”
Sandro Chetcuti (left) said he is convinced Prime Minister Robert Abela (right) will address the MDA's concerns (Photo: MDA)
He also said the registration process itself should be simplified so that landlords will only need to send the Housing Authority a brief description of the rental deal and a copy of the contract. With rent contracts registered, the state will be able to oversee and take action against contractual abuse, such as if landlords increase the rent against the terms of the rental contract.
Chetcuti said he is convinced Prime Minister Robert Abela is listening to the MDA’s concerns and will amend the law appropriately.
“The Prime Minister is aware of the situation, he’s intelligent enough to understand it and I have trust in him that he’s going to address it.”
The MDA head also reiterated his call on the government to compensate landlords who remain bound by rental contracts entered into before 1995, when the government liberalised the rental market. The Constitutional Court has since declared that forcing landlords to rent properties below their market value is unconstitutional.
“If an elderly woman is renting a property for €200 a year, we don’t expect her to end up homeless but we do expect the state to compensate the landlord,” he said.
READ NEXT: Manuel Delia Sued In Bulgaria By Owner Of Shuttered Maltese Bank
