Enacted by virtue of Act XXVIII of 2019, the Private Residential Leases Act (hereinafter referred to as the ‘Act’) aims to regulate the contractual relations between lessors and lessees and to protect the right to adequate accommodation.
Applicability of the Act
The Private Residential Leases Act 2019 regulates private residential leases and does not include leasing of property for commercial reasons or leasing to seasonal tourists.
The Act is applicable to any long or short private residential leases, including the letting of shared residential space, entered into after 1st January 2020 as well as any residential leases entered into before 1st January 2020 which would still be in force on or after the 1st of January 2021.
Guest houses and dormitories
This is subject to a proviso in Article 3 of the Act stipulating that leases entered into prior to 1st June 1995 and which are still in force will continue to be exclusively regulated by the Civil Code.
On the other hand, the Act shall not be applicable to:
- a)Tenements belonging to the Government of Malta, except for those tenements owned by private foundations set up for the purpose of providing affordable housing;
- b)Tenements let exclusively to tourists for tourism purposes;
- c)Tenements which are not let for a primary residential purpose;
- d)Tenements let before the 1st of June 1995;
- e)Urban tenements where contracts of emphyteusis or sub-emphyteusis have been or are about to be converted into leases by virtue of law
Long Private Residential Lease vs. Short Private Residential Lease
The Act distinguishes between long private residential leases and short private residential leases.
Short private residential leases are defined as any lease negotiated for a duration of 6 months, which may not be renewed, and satisfies any one the following categories of lessees:
- a)Non-resident workers employed for a period of less than 6 months or else only to complete a specific task within a maximum period of 6 months;
- b)Non-resident students who are enrolled in courses for less than 6 months;
- c)Residents who need to rent an alternative residence for a period of less than 6 months;
- d)Non-residents who need to rent a tenement for a period of less than 6 months, provided that they would not be seeking to establish their long residence in Malta.
On the other hand, long private residential leases are any leases negotiated for primary residential purpose, which are not classified as short private residential leases and have a duration of not less than 1 year.
Registration of Private Residential Lease Agreements
In terms of the Act, lessors are now obliged to register all lease contracts entered into, including their renewal, with the Housing Authority.
Such obligation is applicable to residential property leases commencing:
- On or after 1st of January 2020 or;
- Between 1st June 1995 and 31 December 2019, with the lease agreement remaining in force as of 1st January 2021.
Lease contracts entered into on or after the 1st of January 2020 must be registered within 10 days from the date of commencement of the lease, whilst leases entered into before the enactment of the Act which will still be in force up until 1st January 2021, are required to be registered by 1st of January 2021.
First time registration of lease agreements shall be against a fee of €10. Registrations in 2020 shall be free of charge. Renewal of agreements shall be at a fee of €5. Should lease agreements be registered later than 10 days from the commencement of the lease, a late registration fee of €120 shall apply.
The Act further indicates that unregistered residential leases agreements will be considered null and void.
Requisites for a valid lease agreement and forbidden clauses
All residential lease agreements must now be made in writing and are required to include the following standard clauses:
- a)The tenement to be leased;
- b)The agreed use of the tenement let;
- c)The period for which that tenement shall be let;
- d)Whether such lease may be extended and in what manner;
- e)The amount of rent that shall be paid and the manner in which such payment shall be made;
- f)Any amount deposited by the lessee by way of security for the performance of his obligations and
- g)An inventory, in the form of documentary evidence, attesting the condition of the tenement as well as the state of any furniture and domestic appliance supplied by the lessor.
Should one or more of the above standard clauses be absent in the lease contract, the residential lease contract shall not be registrable and hence considered as null and void.
The Act also underlines clauses which are not allowed to be put in a lease agreement and should these be included, they will be considered as having no effect.
Termination and withdrawal of Long Private Residential Lease Agreements
Long private residential leases shall be terminated upon the expiration of the term included in the lease agreement, whether such term is conventional, legal or judicial, provided that the lessor gives notice to the lessee at least 3 months of such termination by registered letter. In the event that such notice is not served on the lessee, then the lease agreement shall be deemed to have been renewed for a further period of 1 year.
Furthermore, the lessee may also withdraw for the agreement provided that he may only do so after the lapse of:
- 6 months where such a lease is for a period of less than 2 years;
- 9 months where the lease is for a period of 2 years or more but less than 3 years;
- 12 months where the lease is for a period of 3 years or more.
Withdrawal from Short Private Residential Lease Agreements
In terms of the Act, a lessee may not withdraw from a short private residential lease before the lapse of 1 month. Upon the lapse of 1 month, the lessee has the right to withdraw from the short private residential lease agreement at any time, provided that a withdrawal notice is given to the lessor at least a week prior by registered letter.
The lessor and the lessee may however agree to an alternative method for the lessee to withdraw, provided that such conditions are more advantageous to the lessee than what is stipulated by law.
Shared Residential Spaces
The Act also regulates the lease of shared residential spaces providing that the lease agreements for shared residential spaces need to be registered with the Housing Authority and shall have a duration of 6 months, without the possibility for renewal.
The lessee may withdraw from the lease of shared residential space at any time, provided that he gives 1 week prior notice to the lessor by a registered letter.