Malta Private Residential Leases Act 2020 – Property Management Guide
If you’re a landlord in Malta, you know that property management is a complex undertaking, and one of the most critical aspects is leasing, that’s why it’s essential to be aware of the Private Residential Leases Act. This act was introduced in 2019 and governs the rental of private residential properties in Malta.
The Malta Private Residential Leases Act of 2020 (Cap. 604) provides comprehensive guidelines for private residential leasing, ensuring that landlords and tenants are protected by clearly defined rights and obligations. The main purpose of the act is to ensure that everyone has access to adequate accommodation, and it provides various protections for landlords and tenants. In this article, we’ll provide an overview of the act and highlight some key points that you need to know.
Private Residential Leases
It’s essential to note that the Malta Private Residential Leases Act only applies to private residential leases. This means that it doesn’t cover commercial properties or properties rented out for short-term accommodation, such as holiday rentals.
Long Leases
A Long Private Residential Lease cannot have a duration of less than one (1) year.
One-year lease contract:
The initial six months are mandatory for the lessee. After six months, the lessee can terminate the contract by providing one month’s notice via registered letter. If the lessor does not intend to renew the lease, the lessee must be informed three months prior to the contract termination via registered letter. Failure to notify the lessee within the established period results in automatic renewal of the lease for one year. The minimum duration is one year, but longer lease contracts can be agreed upon between the lessor and lessee.
Two-year lease contract:
The first nine months (9) are mandatory for the lessee. After nine months, the lessee may terminate the contract by giving two months’ notice via registered letter. If the lessor does not intend to renew the lease, the lessee must be notified three months before the contract termination by registered letter. Failure to provide the required notice results in automatic renewal of the lease for one year.
Three years or longer:
The first twelve months (12) are mandatory for the lessee. After twelve months, the lessee can terminate the contract by giving three months’ notice via registered letter. If the lessor does not intend to renew the lease, the lessee must be informed three months prior to the contract termination by registered letter. Failure to provide the required notice results in automatic renewal of the lease for one year.
Key Considerations: Lease Extensions, Termination, and Rent Increase Limitations
The Act also stipulates that rent increases for lease extensions shall not exceed 5%. It’s also important to note that lessees have the option to terminate or extend their leases. If the lessee does not do so at least three months before the end of the lease, the lease is automatically renewed by the Housing Authority and shall continue to be in force. And if the lessee terminates the agreement within the specified notice period and meets all other conditions outlined in the lease, including payment of utility bills and the absence of any damages or breakages, the lessor must refund the security deposit in full.
Short-Term Leases
1- Eligibility and Duration
Short-Let contracts apply to specific scenarios:
- Temporary foreign workers employed for six months or less.
- Students enrolled in short courses lasting less than six months.
- Foreign lessees not seeking to establish ordinary residency in Malta.
- Residents needing to lease an ordinary residency for less than six months.
2- Duration and Termination
The lease duration is six months. The first month of the lease is obligatory for the lessee. Following the obligatory month, the lessee may be released from the contract but is obliged to give at least one week’s prior notice to the lessor by means of a registered letter. However, the contract cannot be renewed.
Conclusion
In conclusion, the Malta Private Residential Leases Act is an essential piece of legislation for landlords and tenants. It provides various protections for tenants, such as notice periods, security deposit refunds, and rent increase limits. However, it’s essential to note that the act only applies to private residential leases and not commercial properties. If you’re a landlord or tenant, we recommend that you familiarize yourself with the act and consult with legal professionals if necessary.
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