The Malta Independent 16 May 2022, Monday

Updated: Social NGOs propose minimum rent period should be three years

Kevin Schembri Orland Monday, 26 November 2018, 10:53 Last update: about 4 years ago

The Social Alliance comprising of 20 NGOs today presented their comments and suggestions on rent reform to Parliamentary Secretary for Social Housing Roderick Galdes, as part of the rent reform public consultation.

Andre Callus from Moviment Graffiti read out a number of the proposals. One major point they presented is about rent periods. The White Paper recognises that current practices of providing short-term contracts leads to people having to live precariously. He said that it also outlines two possible frameworks in order to have long-term contracts for residential leases – either a minimum term contract, or tax incentives.

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Callus said that the NGOs propose that contracts be signed for a minimum three-year period, and combine it with tax incentives for longer period terms, thereby also merging the two.

They also took note of the exceptions whereby a landlord can pull out of a contract before it expires, such as the need to reside in the property, or the intention to sell the property or carry out structural works. The NGOs believe that such exceptions should only apply after a lapse of three years in any contract.

In terms of rent increases during the duration of a contract, the White Paper states that the maximum increase allowed could be pegged to the Property Price Index, and possibly also capped. Callus said that the NGOs agree that landlords should be able to raise rent, but believe that the maximum increase allowed should be pegged to the cost-of-living increase, and not the index, through a clear and accessible formula.

Turning to rent stabilisation, the NGOs also propose that when a contract expires, whether a landlord extends the contract with the current tenant or not, the landlord should only be allowed to raise rent by 10% of the previous monthly rent paid. They also proposed the creation of a rental value index, listing rent-value in different areas. They also said that tenants with existing lease agreements need to be protected, as there is a risk that tenants could be forced to leave the property following the enactment of such regulatory framework, or asked to pay exorbitant rent increases. To counter this, they recommend that landlords be obliged to let existing tenants continue living and paying rent for a reasonable period of time, proportional to the time they have been living in the unit, of not less that one third of said period, and that the rent price increase should not be more than 10%.

IGEN comments from The Malta Independent on Vimeo.

Parliamentary Secretary Galdes  explained that, following the consultation period, government will start putting together the legislation which will then go through Parliament.

Galdes said that the rent market needs to be regulated and not be controlled by the law of the jungle.

Galdes also spoke about a future housing policy being drawn up by the Housing authority. He also spoke about the need for affordable housing, and said that government's thought is to call for cooperation with NGOs on government land, for affordable housing, where government would build together with the entities, apartments for rent at affordable rates.

Government also met with the iGaming European Network (iGen), who represent the top 15 gaming companies in Malta, on the proposed rent reform.

Kevin - Moviment Graffiti comments from The Malta Independent on Vimeo.

iGen's representative said that rent regulation is an important topic for the gaming sector, stressing that the sector employs many at entry level, who suffer due to high rents, having to live far away or share apartments.

With regards to minimum rent periods, iGen believes one year should be the minimum length of time.

They also believe that any increase in rent should be linked to an average salary index, and not a property price index. Another major proposal by iGen is that, after the end of a contract period, the current tenant should have a right to renew the contract with any increase in rent linked to a salary index.

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