Political gimmicks are not new to these islands. Some are harmless and are merely used as a ploy to attract attention, but are less innocent in scope. On Saturday 11 June, our very own Green Party launched a campaign aimed at abolishing our rent laws. AD will be collecting signatures to force a referendum apparently aimed at abolishing any reference to rent and leases from our statutes. The reasoning behind this bright idea is to force the government’s hand to change our rent laws.
Allow me to put forward some personal reflections on the matter. There is no doubt that we all acknowledge that the rent laws are antiquated and, as a consequence, have in the past and to the present day put many property owners in a disadvantaged situation. Those who signed lease agreements decades ago have to all intents and purposes transferred their property without little chance of it ever being returned. Rented property has passed through generations, without the rent keeping up with increases in other property markets. Raising the rent is almost forbidden and those who have taken advantage of the rent laws in fact pay less rent in monetary value than what their grandparents did.
There is consensus in this country that the rent laws should be revisited and changed for an equity between lessor and lessee to be found. The discussion and the lack of agreement is how this balance should be set and at what speed. Politicians have taken a long time to make up their minds, not because they are incapable of drafting a new legislation but because they have recognised that the issues are complicated, delicate and if not handled with care could disturb our social fabric.
In his announcements Dr Harry Vassallo repeated the common perception that rent laws have not changed because they are unpopular and will lose votes. I can give a list of a number of measures that the Nationalist Party in government has taken in the recent and distant past that certainly cannot be described as vote catchers. Notwithstanding their unpopularity, the measures were taken for the good of the nation. The rent laws problem is difficult not because it is a political hot potato, but because the wrong decision could result in certain categories of people having to live in cardboard boxes.
Dr Harry Vassallo is encouraging the public to sign the referendum petition by saying property prices are high due to these antiquated rent laws, thereby insinuating that once the laws are changed property prices will drop and become more affordable. Forgive me for scratching my head in amazement and disbelief. In 1995 the rent laws were reviewed and changed with the intention of striking a balance between lessee and lessor.
In a nutshell, the amendments meant that any lease agreement signed after June 1995 would rule supreme and the antiquated rent laws did not apply. Therefore, the lessee and the lessor knew exactly the date of termination of the lease and the rent was determined by the parties and not by a Rent Regulation Board.
When first set in motion in 1995, the expectation was that a large percentage of vacant properties would be rented out, because it was now safe to rent to Maltese nationals as there was not the fear that the property would be taken over in eternum by the tenants. Ten years on, one can safely say this amendment did not change the rental market as drastically as was hoped.
In my opinion this is because we all prefer to purchase property rather than rent. In reality renting is not a cheaper option. Many have argued that they prefer paying a higher mortgage payment than paying rent, simply because they become owners of that property. Property market prices are dictated by the forces of the market; at the moment many prefer purchasing property and will not even consider renting, even though paying rent might be a slightly cheaper option.
Furthermore, the assumption that landlords want their property back in order to re-rent at more favourable prices is a fairytale. From my experience, landowners struggle to take hold of their property in order to speculate, as they have a right to. Some have seen it financially advantageous to pay the tenants ridiculous sums of money merely to terminate the lease agreement in the hope of reaping a handsome profit after developing and selling the same properties.
Therefore, Dr Vassallo’s assumption that a new rent regime will lower property prices is simply fallacious and in my view the opposite may happen.
Then why do I personally think that the rent laws need a modern approach? Simply because now is the right time to do it! It is not fair that landlords receive ridiculously low rents for their property, without having a realistic chance of having the property returned to them and with the ongoing risk of having to finance substantial structural repairs. It is simply not on.
The current rental situation has bred abuse. It is a well-known fact that grandchildren ostensibly take up residence with their grandparents (sometimes by merely changing the address on their identity card) in order to claim recognition from the landlord following the death of their grandparents.
However, as politicians we must protect the social fabric in that those who genuinely rent premises will not end up unable to afford to have a roof over their heads because the legislator has suddenly allowed a dramatic increase in rents. Forcing people out of homes and businesses with the stroke of a pen is criminal, as is using the law to effectively steal somebody else’s property. I find that this is the crux of the problem and our dilemma.
Alternattiva Demokratika has the luxury of being able to play politics with gimmicks and sensationalism. The Nationalist Party does not enjoy the same luxury. Every decision it takes will affect families’ lives on both sides of this issue, be they tenants or landlords. A mature discussion is of the essence in this respect by all those concerned, with a view to continue amending our rent laws.
Dr Mifsud is a PN candidate and president of the College of Councillors of the PN. This contribution reflects his personal opinion.