TRIAL BY JURY
Victim was already face down on the ground when car drove over him
The head of the Malta Developers Association (MDA), Sandro Chetcuti, believes a serious revision of Malta’s rent laws is required as more and more problems continue to arise for both tenants and landlords.
Chetcuti was presenting six proposals drawn up by the MDA to Parliamentary Secretary for Social Accommodation Roderick Galdes.
In talking about a complete revision of post-1995 rent laws, Chetcuti spoke of numerous instances where landlords experience “fear” from tenants who seriously damage properties or fail to pay their rent and then abscond. He added that should the landlord decide to take the issue up in court, more often than not it takes years for cases to conclude and justice to be served.
On his part, Galdes promptly reminded him that many tenants suffer from inordinate increases in rental prices, landlords not offering tenants contracts and abruptly informing them they need to vacate their property just after a few months or abusive practices where deposits are not returned to tenants.
Both sides agreed that a serious revision on the current laws are needed, with Galdes adding that the government would be launching a white paper on the housing market in Malta in order to get a clear snapshot of the real issues faced by people on both sides.
Chetcuti also proposed the introduction of a social gain for developers. Currently, Maltese law provides for a planning gain – a sum of money developers may have to pay in compensation for the detrimental consequences of a development.
Chetcuti proposed an additional gain for social purposes in order for developers to “give something back” to the community, which could come in the form of a payment towards social funds or the provision of some form of open space within the vicinity. The details of the social gain had not been ironed out in the presentation to the press.
“With this proposal, we hope for any additional wealth on top of what the developer has made not to end up in their pocket, but for that wealth to be spread around.”
Another proposal was for the Housing Authority to identify abandoned properties where the land owners either do not have the money to fix up the place themselves and rent it out, or possibly the owners are elderly and do not have the energy to chase contractors and the like.
Chetcuti specified that the MDA is not talking about completely derelict houses, but properties where €15,000-€20,000 would be enough to get it up to scratch.
It also proposed a scheme whereby developers would allocate apartments for social cases in return for extra floors on their developments. This would translate into the Planning Authority coming into an agreement with developers so that part of their revenue is dedicated to social purposes or even allocating a number of apartments within the development for social purposes. This would prevent the ghettoization of certain areas.
Developers would benefit from advantageous permit conditions, such as being allowed extra floors, in certain areas where this would be suitable.
He reiterated the MDA’s concern that the controversial citizenship-by-investment requirements for rent are far too low, at €1,300, (must exceed €16,000 per year) leaving those citizenship-buyers to choose to rent out such properties rather than opt for the purchase requirement of €350,000.
A long-term approach to the government’s newly launched rent scheme was included in its proposals, where the government is incentivising people to lease out their private property to the Housing Authority for the purposes of social housing.
This scheme has attracted 149 applicants to the scheme so far, and while not all will be served immediately, Galdes hailed it as a “big success”.
Galdes revealed that the government is close to concluding a “social loan” with a “big bank” for the purposes of social housing, and that a “huge” brainstorming session will commence, and all stakeholders are encouraged to contribute to the debate.
The aim is to analyse the current sector and assess exactly why rental prices have gone up by so much.
On this note, Chetcuti stressed that the price of land, distinct from the price of properties, has doubled since 2012. This means that those buying the land in order to develop it are incurring much higher costs, which has a big impact on how the return on that investment is achieved.
He also stressed that the anomaly in the pre-1995 rent laws means that many landowners are forced to rent out their property at a pittance. Another situation arising from those laws is when people inherit land that is tied up to a pre-1995 rental agreement, in which case the rent cannot be altered, and landlords wind up taking out large loans and struggling to purchase a property as a primary home for themselves.
“There are thousands of people in these situations, which is seriously distorting the market.”