For decades, Malta's rental laws have been a legal minefield, balancing the rights of landlords against the protection of tenants. However, recent constitutional judgments are shaking up the status quo, with court ruling that aspects of Malta's rent control framework infringe upon property owners' fundamental rights.
A system under scrutiny
A recent judgment delivered by the First Hall of the Civil Court (Constitutional Jurisdiction) on 28th February 2025 adds to the mounting jurisprudence questioning the constitutional legitimacy of Malta's rent laws. The case, Emanuela Farrugia vs L-Avukat tal-Istat et, revolves around a long-term lease bound by Chapter 69 of the Laws of Malta; a statute that has long been criticised for disproportionately favouring tenants at the expense of landlords.
The plaintiff, Emanuela Farrugia, inherited a property that had been rented out under a pre-1995 rental agreement at a rate far below market value. By law, she was restricted from evicting the tenant and even from increasing the rent to a level that reflected the current market rates. Farrugia argued that this legal framework amounted to an unjust expropriation of her property rights without adequate compensation, violating both the Maltese Constitution (suprema lex) and the European Convention on Human Rights (ECHR).
The legal conundrum: Tenant protection vs. property rights
Historically, Malta's rent control laws were implemented as a social safety net to protect tenants from sudden evictions and skyrocketing rent prices. However, many of these laws date back to a time when economic and housing conditions were vastly different.
Before amendments introduced in 2009 and 2021, landlords were often left with no real avenue to regain possession of their property. Even after these legislative updates, landlords still face significant hurdles in adjusting rental rates, as increases are capped at 2% per year of the property's free-market value; a restriction that fails to account for inflation and rising property costs.
A constitutional violation?
In its ruling, the court found that the legal framework governing such long-term leases placed an excessive burden on landlords. The judgment pointed out that while rent control laws serve a social function, they must also be balanced against the rights of property owners to enjoy their possessions.
The court cited Article 37 of the Maltese Constitution, which protects individuals from being deprived of their property without fair compensation. However, it concluded that Article 37 had no legal basis in the case, as Article 47(9) of the Constitution explicitly states that laws enacted before 1962 are not safeguarded by this provision, making Chapter 69 of the Laws of Malta, enacted in 1931, exempt from its protection.
Additionally, the court referenced Article 1 of Protocol No. 1 of the ECHR, which guarantees the right to peaceful enjoyment of property. While acknowledging that the amendments introduced by Act XXIV of 2021 provided some relief, it held that these changes were still insufficient. As a result, the court found that the existing rent laws continued to impose a disproportionate burden on landlords, failing to strike a fair balance between the legitimate interests of the tenant and the fundamental rights of the landlord.
Precedents and ECHR Influence
This case is not an isolated one. The European Court of Human Rights (ECtHR) has repeatedly ruled against Malta in similar disputes, finding that its rent control regulations imposed excessive and disproportionate burdens on landlords. In cases such as Amato Gauci v. Malta, Bradshaw and Others v. Malta and Cassar v. Malta, the ECtHR determined that Malta's failure to provide landlords with adequate legal remedies violated their property rights. In the latter case, the ECtHR specifically stated the following: "... the Maltese State failed to strike the requisite fair balance between the general interest of the community and the protection of the applicants' right of property."
Malta has been compelled to amend its rent laws in response to these judgments, yet many argue that reforms have not gone far enough.
It is important to note that while the court has ruled aspects of Malta's rent laws unconstitutional, this does not mean that the law is automatically repealed or that all future cases will be decided in the same manner. Unlike jurisdictions that adhere to the principle of stare decisis, Malta's legal system does not consider constitutional judgments to be binding precedents. Each case is assessed independently, meaning that similar claims may still yield different outcomes. However, this is not to say that such rulings lack influence. As Judge Emeritus Giovanni Bonello observes in 'Misunderstanding the Constitution', while constitutional judgments exert pressure for legislative reform, they often become "pretty verbiage, devoid of any legal weight." Nonetheless, the need for legal certainty remains, as the repeated condemnation of Malta's rent laws creates growing momentum for reform, signalling that change may be inevitable.
What's next for rent laws in Malta?
As constitutional rulings continue to challenge Malta's rent laws, the government will need to navigate a complex legal and social landscape. This judgment marks another significant step towards a more balanced and legally sound rental framework, one that safeguards both tenant security and landlord rights in equal measure.
With further constitutional challenges on the horizon, the evolution of Malta's rent laws is far from over. Whether the government will take a proactive approach or be forced into change by continued court rulings remains to be seen.
Sarah Demicoli is a Trainee Advocate at Ganado Advocates.
Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report.