Understanding the 2024 Amendments to Malta’s Private Residential Lease Laws: Key Changes and Compliance Guidelines

In June 2024, Act XX introduced important amendments to the legal framework governing private residential leases. These changes aim to clarify existing provisions, enhance protections for both tenants and lessors, and establish higher standards for leased properties. This article provides an overview of the key updates, including registration requirements, lease termination rules, and habitability standards, as well as insights into the transitional period for implementing these amendments.

Termination of Leases Due to Institutionalisation

A significant change to the Civil Code relates to the treatment of lessees who become permanently dependent on institutions, such as hospitals or elderly homes. The amendment to Article 1555A treats such situations as equivalent to the lessee’s death, resulting in the automatic termination of the lease. This adjustment replaces the previous provision that allowed the transfer of tenancy rights to certain family members under similar circumstances.

Stricter Notice Requirements for Lease Termination

The amendments update Articles 1573 and 1574, introducing stricter notice requirements for lease termination. Lessors must now provide a minimum of three months' notice via registered letter before terminating a lease for personal use or due to property sale or transfer. This change aims to offer greater security to tenants, allowing them sufficient time to make alternative arrangements.

Extended Registration Deadlines and Retroactive Effect

The changes to the registration process under Article 4 are particularly significant. The registration period for private residential leases has been extended from 10 to 30 days, allowing lessors more flexibility to comply. Importantly, registration now has retroactive effect, ensuring that tenants' rights are protected from the lease’s commencement date, even if registration is delayed. The process has also been modernized, with a shift to mandatory online submissions, simplifying compliance for lessors.

New Habitability Standards for Rental Properties

The amendments grant the Minister the authority to set minimum habitability standards for leased properties, including regulations on the maximum number of occupants per dwelling. The Housing Authority is responsible for enforcing these standards, ensuring that rental properties are safe and not overcrowded. This focus on habitability aims to improve living conditions for tenants and establish clear benchmarks for lessors to meet.

Clearer Guidelines for Lease Renewals

A new provision, Article 9A, clarifies the process for renewing lease agreements. Any renewal must adhere to the terms of the original agreement, with a potential rent increase capped at 5%. The renewal period must be for at least one year. If a renewal is not formalized but the lessee continues occupying the property, the Housing Authority can impose fines for non-compliance, encouraging transparency in lease extensions.

Simplified Process for Lessee Substitution and Addition

Articles 9B and 9C introduce provisions for substituting or adding a lessee with the consent of all parties involved. These changes allow for flexibility without creating a new lease agreement or altering the original leasing period. Incoming lessees assume any existing obligations, ensuring continuity in the rental agreement.

Gradual Implementation for Existing Leases; Immediate Application for New Agreements

To ease the transition, leases that began before June 2024 remain governed by the previous rules, allowing lessors and tenants to continue under their current terms without immediate changes. This phased approach prevents disruptions and allows time to adjust to the new requirements.

For lease agreements entered into after the amendments came into force in June 2024, the new rules apply immediately. This ensures that new leases align with the enhanced protections and standards, promoting fairness and transparency in the rental market from day one.

Conclusion

The June 2024 amendments to the law on private residential leases represent a significant shift towards greater clarity, fairness, and transparency in rental agreements. By refining notice periods, modernizing registration procedures, and emphasizing minimum standards for habitability, these changes aim to protect both tenants and lessors. With a transitional period in place, stakeholders have time to adapt to the new framework, ensuring that the rental market continues to function smoothly while aligning with these updated legal standards.