Parliament convened on Monday to discuss the amendment to the Housing (Decontrol) Ordinance of 1979.

Justice and Home Affairs Minister Tonio Borg opened the debate by explaining that the proposed bill affects a specific category of people: those who are Maltese citizens, who are occupying the property concerned as their ordinary residence (hence excluding properties such as garages, shops, warehouses and summer residences), who have come into the property by title of sub-emphyteusis, who entered into the emphyteutical agreement before 1979 for a period of 30 years, and to whom the sub-emphyteusis was granted in the context of a perpetual emphyteusis.

Dr Borg explained the latter clause by giving as example the case of person A – the owner of the land – who gives the property to person B via perpetual emphyteusis, and in turn B passes the property on to individual C via temporary sub-emphyteusis.

The problems start when the ground rent expires. Under the 1979 law, people who satisfied the above conditions were given the impression that they could convert the temporary ground rent into a perpetual one by multiplying it by six – paying Lm6 in perpetual ground rent for every Lm1 they paid for their temporary one – subject to revision every 15 years according to inflation indices published by the government.

However, said Dr Borg, a 2006 court sentence had opened a legal chasm; in its ruling, the First Hall of the Civil Court stated that holders of temporary emphyteusis titles, and falling within the above definition, cannot convert them into perpetual ones. And so a sizeable chunk of the population, which had purchased property because of the 1979 law, was left without legal protection because they no longer fell under any other legal category, with the risk that they could now lose their homes.

Parliament needs to make sure, said the minister, that families are not thrown out into the street, because they had, after all, purchased their dwelling. One may callously say that they should have sought legal advice in 1979 – but in truth, had they done so back then, they would have probably been told that they were protected, and assured of the possibility to convert ground rent once it expires.

However, the amendment should be fair to both sides, said Dr Borg, and the owner should get fair compensation. Perpetual ground rent should be paid at at least six times the temporary rate, or calculated according to the inflation index, whichever is higher. Ground rent agreements entered into before 1946, the year taken as a benchmark for the inflation index, will be calculated at double the rate until that year, and thence will be multiplied by the rate of inflation. Dr Borg also left the door open for further adjustments to the rate of compensation, once the law reaches committee stage.

The proposed amendment will also include another category of temporary emphyteusis, which is taken as sub-emphyteusis from another holder of temporary ground rent. In such cases, when the first term expires, the ground rent shall be extended to the full tenure of the superseding agreement. When the latter term expires, the ground rent title can then be converted into a perpetual one.

Labour spokesman for justice Anglu Farrugia insisted that government must adopt an even-handed approach. He said that people who entered into sub-emphyteutical agreements may have been misled by notaries, and owners have the right to know when they will be able to start enjoying their property again.

Although the MLP is afraid that a number of people may find themselves evicted, which Dr Farrugia deemed unacceptable, the party believes that ground rent title holders should not end up with more rights than they had in the first place.

Therefore, he said, habitation rights need to be qualified and automatic inheritance excluded. Owners who passed on properties under temporary titles did so in the knowledge that, after a certain number of years, the land would return to them, and so if they are going to be denied such a right, they should be compensated by an amount equal to the amount of which they are going to be deprived.

The MLP spokesman asked if forced repossession of property will fall within the scope of the amendment being discussed, and what would happen if the bill is challenged in court and found to be unconstitutional. Would government then have to pay damages to all those who had signed new contracts, based on the amendment?

Parliamentary Secretary in the Justice and Home Affairs Ministry Carmelo Mifsud Bonnici said that recent Popes have told us that there is no peace without justice. Likewise, can there be no economic well-being without certainty, and as the current situation stands, the whole property market is facing uncertainty.

Dr Mifsud Bonnici said that the principle of private property gives a title of stability and the right to the occupier to continue occupying his or her property, and such stability is needed no less than by elderly people, who may now be facing eviction, because a court ruling has revoked what the 1979 ordinance had led them to believe – that they were set for life.

PN MP Mario de Marco said that the housing problem should not be solved by the private sector, except in emergency situations, but should be borne by government. Putting himself in the property owners’ shoes, Dr de Marco asked whether it should not be the owner himself or herself who should decide how much he or she should be compensated in respect of the property of which they are being deprived. What if, for example, the property value is not reflected by the inflationary rate?

Dr Borg wound down the session by saying that he will seek a certificate of the constitutional validity of the amendment, failing which the bill would come back to Parliament to be discussed anew.

No objections were raised to the proposed second reading of the bill, following which it will be referred by the House to the Permanent Committee for the Consideration of Bills.

Yesterday being a public holiday, Parliament was adjourned until today’s session.