The GRTU has asked the two main political parties for commitment that whoever is elected to government will revise the rent law because many business owners, especially ones with premises in Valletta, are being very negatively affected.

While both parties have said they are ready to resolve issues, no party has given commitment.

In a press conference earlier today, attended by a good number of angry business people, the GRTU explained that amendments to the Civil Code introduced in 2009 included provisions that shocked the commercial community.

Community premises leased prior to1995 (and which fell foul to a few other conditions), are faced with an ultimatum of 20 years for leased properties and 10 years for sublet properties.

The measure is threatening the existence of a substantial percentage of small and medium enterprises. The GRTU added the measure is discriminatory and curtails businesses from their civil right of property enjoyment.

GRTU director general Vince Farrugia said that while the GRTU met the two political parties, none has paid attention to the needs of commercial tenants. He believes thousands of people are affected with a good percentage of them unaware of the situation they face.

The issue was not resolved in the past legislature because Members of Parliament had a conflict of interest. While not giving names, he said there were notaries, lawyers and architects among them.

The law states: “A lease of commercial premises made before 1 June 1995, shall in any case terminate within 20 years, which start running from 1 June 2008, unless a contract of lease has been made stipulating a specific period. A contract made prior to 1 June 1995, and which is to be renewed automatically or at the sole discretion of the tenant, shall be deemed as if it is not a contract made for a specific period and shall as such terminate within 20 years which start running from 1 June 2008”.

In the case of subletting of commercial tenements before 1 June 1995, these shall be terminated on 31 May, 2018, unless done by agreement with the lessor, in which case such sublettings shall be regulated by such agreement: Provided further that the lease shall be established according to the Property Market Value Index.

Mr Farrugia highlighted that a good number of business establishments facing these difficulties were set up when little business existed and the low rent served as an incentive. In fact, the government used to use such property to encourage individuals to set up shop. Over the years, property was passed on from generation to another and subletting occurred.

The GRTU is insisting on restoring equity and equilibrium by means of a formal structure.

The Property Market Value Index needs to be established. This index, which is already provided for in the law, would provide both tenants and landlords with a formula to obtaining a fair rent figure, bringing both sides closer to the payment of a fair rent – the main criteria for the introduction of the mentioned ultimatums.

Moreover, the GRTU proposes the introduction of a Commercial Rent Committee in addition to the Rent Regulation Board. This will have a pre-trial mediatory role.

The Rent Laws have completely disregarded the investment made by thousands of small enterprises which, over many years, have provided service to the community, generated employment and economic growth and were successful without the possibility of state aid or tax credits.

The GRTU reiterated that the new government is to appoint an Independent Commercial Rent Law Review Commission, chaired by a retired Judge or magistrate, and having one member nominated by the GRTU, to represent commercial tenants.

The Commission will establish the negative impacts that exist for commercial tenants and make recommendations to the government to mitigate the identified negative impacts.

GRTU is contending this commission is to be appointed within one month of the formation of a new Cabinet and the Review Commission would then submit its report within two months of appointment.

The proposed amendments and solutions must then come within three months of the Commission’s report.

 Impact assessment on businesses needs to take place and the deadlines given must be removed.

Among the business people who expressed their concerns was GRTU council member and owner of a Valletta retail outlet Therese Fenech Azzopardi. She pointed out that she would like to retire and hand the shop over to her daughter but this does not make sense when she has a good job and would have to give up the shop after 17 years.

In addition, these tenants are finding it difficult to invest in their shops and cannot take bank loans.

A pharmacy owner also pointed out he used to pay some €580 annually in rent and this has gone up by 15% three times, since the reform. This will again be going up by another 5% for a number of years according to the law. Now the property owners are asking for the whole amount per square metre – something he deems not realistic, even though in the past he used to tell the property owners to raise the fee.

The pharmacy employs 10 people.