The Controlled Leases Reform bill should be introduced so that it would solve the problems for both the tenants and property owners, Prime Minister Robert Abela told Parliament on Monday. 

The objects and reasons of this Bill are to revise controlled leases where the amount of rent paid to the landlord does not meet the proportionality test, whilst the maximum remains controlled however the amount is calculated on the market value of the premises at the time the rental amount is calculated.

It addresses issues regarding protected leases, which is a lease signed before 1995. At the end of the lease, the owner of the property cannot stop renting it to a certain family, so it is automatically extended. The rent could not increase substantially as well.

“There are 10,000 families living in residences governed by laws of 1995, most of them pensioners who are living with uncertainty. Rather, they have certainty that today or tomorrow they will be kicked out of their homes,” the PM noted. 

There is also the issue regarding the owners of these properties, Abela noted, which are not receiving a just compensation for their own property. “These are the same people that generally do not want to kick out the tenants,” he said. “This reality that what we have lived for 21 years will change today, which will give certainty and peace of mind. We are the government of reforms; a government that is never afraid to decide.”

The rent for such properties stands at around €230 per year, Abela remarked. 

“We several court judgments that confirmed that our rent law does not confirm with the constitution.”

These have removed any protection for the tenants, Abela said. “When you end up in court, you generally end up kicked out of your own home…It is true that in such cases, the housing authority intervened and saw that whoever gets kicked gets an alternative place to reside in. However, we do not believe that this is the only solution, as it doesn’t offer piece of mind.”

That is why a legal framework should be created, Abela stated, in which both the tenants’ and property owners’ rights are taken into consideration.

“We are going to remove uncertainty; as a government, we will ensure the protection of the tenant. It means that the tenants will be given the peace of mind that they won’t be kicked out of the house or that the lease would get higher,” the PM said.

“We are also speaking about property owners who are hurt as well. Such people find themselves saying that either the rent should go up by 40 times or they would have to remove the tenants. These are the realities.”

The PM criticised reforms introduced by past PN governments, claiming that they gave false hope both to the tenants as well as property owners.

Abela said that this reform will give legal assistance to the tenants, but he remarked that “this is not a war against the owners”, but rather to ease the pain of tenants. This is as these would usually be pensioners, he said.

“We will ensure a benefit for rent which will be paid by the government, where no one will pay more than he can. We are not going to leave pensioners alone.”

The PM noted that the government will cover around a maximum of €10,000 per year for the tenants to pay their rent, so as not to be kicked out of the place they are renting and have lived in for a number of years.

The PM also remarked that a lot of consultation took place for this reform to be discussed in parliament.

“This is the principle of social justice which enlightens us to make such decision. It is of no use of identifying the problem without giving a solution,” Abela said.