The Private Residential Leases Act takes effect as of 1 January 2020, which means that any contract signed or renewed after this date must follow the new rules. The new rules also apply to residential rental agreements that are in force as of 1 January 2021, including all documents signed after 1 June 1995.
The new law does not apply to social—agreements with the government—or touristic leases, nor for contracts signed before 1995.
Landlords can register rental contracts on the official Rent Registration website by clicking here. A step-by-step guide on the proper registration process is available here.
A minimum of one-year (1) mandatory duration applies to long lets, while short-term rental contracts cannot exceed six (6) months in length.
Short-let contracts can only be signed for:
- non-resident workers employed for less than six months;
- non-resident students attending courses shorter than six months;
- non-residents who need housing for less than six months and do not seek to establish long-term residence in Malta; and
- residents in need of alternative accommodation for less than six months.
Requirements
The landlord must register every private rental contract with the Housing Authority no later than ten (10) days after signing the document. This rule applies to new contracts and renewals too.
The rental agreement must be recorded in writing and must specify the rental period—and whether it can be extended—, the amount of rent per room, as well as shared spaces if the tenant only rents a room.
The rental contract has to include the amount of deposit paid by the tenant and the payment method of the monthly rent.
The landlord must provide an inventory of the contents and condition of appliances and furniture in the rental place.
Termination
If the landlord wants to terminate a long-let contract, a notice must be sent to the tenant three (3) months before the end of the rental duration. Should the landlord fail to do so, the contract automatically renews for another period.
Short-let contracts terminate on the date of expiry. Neither the landlord nor the tenant has to give notice.
The landlord is allowed to come up with the initial rental price on their own. The landlord can only raise the rental price once a year. The raise cannot exceed 5% of the annual rental price, which figure is in line with the Property Price Index by the National Statistics Office.
Should a contract miss any of the items mentioned above, the agreement is immediately considered void.
The landlord must make sure that there is an adequate supply of water and electricity in the rental place. They must also present the correct utility tariff and bills to the tenants, shared proportionately among them.
The landlord has the right to demand compensation from the tenant if the latter remains in the property after the contract expires.
Fines and Jurisdiction
The sole regulator to oversee the market is the Housing Authority. At the same time, the Private Residential Leases Unit, a new body, will see its establishment soon.
Anyone who does not follow the rules can be fined for €2,500-€10,000. Landlords attempting to block utilities or remove furniture and appliances can be fined for €1,500-€4,000.
Anybody found living in a property not appropriately registered in line with the regulations can be fined €5,000.
Housing Authority representatives have the right to enter any rented home at any reasonable time to verify whether the tenant occupies them.
Tax Credit
Landlords letting a single-bedroom property for a minimum of two (2) years are eligible for a tax credit of €200. Letting a property for a minimum of three (3) years offers a €300 tax credit.
Landlords letting a double-bedroom property for more than two (2) years are eligible for a tax credit of €300 while letting a property for more than three (3) years offers a tax credit eligibility of €400.
The highest tax credit eligibility is €400 and €500, in case of properties of three bedrooms or more, in case of minimum two-year and minimum three-year rental duration, respectively.
The Maltese government expects the new law to bring security to a haphazard market. However, the Malta Developers’ Association criticised the new rules, saying they will damage the freedom of landlords and tenants to draft up contracts.
Are you a landlord letting a room or apartment? Download our checklist to make sure you are in line with the new rules.
DISCLAIMER:
The present article serves the purpose of giving you general information and a general understanding of the law. The article is NOT legal advice. By reading our articles, you understand that there is no legal relationship between you and NoAgentFees.com. You should not act upon this information without consulting licensed legal entities.
Stay safe! Always record agreements in writing to avoid disputes. Verbal agreements are not legally binding. Always read the contract carefully. Take your time with it. If you do not understand something, ask for legal advice. You must understand the gravity of every single word and must make sure that details are correct. Sign every page if the document has many pages. Keep a copy of the agreement with you. Always consult a lawyer when in doubt.