Legal Court Report

DR. JOSEPH LIA

On 28th April 2023, the Rent Regulation Board presided by Magistrate Dr Noel Bartolo (application ref. 518/21 NB) handed down a partial ruling on a claim by the owner of a property which was subject to a lease agreement, for an increase in rent not exceeding 2% of the value of the property in question in accordance with article 12B of the Housing (Decontrol) Act (Chapter 158 of the Laws of Malta).

This provision of law (catering for such increase in rent of up to 2% of the market value of the property) applies to rental and emphyteutical agremeents entered into before 1st June 1995. In this particular case before the Rent Regulation Board, the property was taken on temporary emphyteusis back in the 1970s; when this expired in 1999 the emphyteuta continued to reside in said property, protected by the laws of the time, under a title of lease.

The tenant submitted by way of preliminary plea, that in 1999 an agreement was reached between the parties, on the amounts of rent to be paid once the temporary emphyteusis had expired. The tenant pleaded before the Rent Regulation Board, that the 1999 agreement amounted to a Novation and therefore article 12B was not applicable. On its part, the Rent Regulation Board did not agree with the tenant’s plea. It held that the 1999 rental agreement could not be seen in isolation, but was to be considered together with the preceding title of emphyteusis and therefore the arrangement was one which commenced before 1st June 1995. It argued that, for there to be a Novation, the original agreement had to be completely extinguished, and not merely modified. There also had to be evidence of animus novandi between the parties i.e. intention to extinguish the old agreement and commence a competely new, separate one which was incompatable with the previous. The Rent Regulation Board ruled that from the evidence presented before it, it was clear that this was not the case and that the parties, when negotiating and entering the lease agreement in 1999, were merely extending the right to reside in the property in question albeit under a new title. Consequently article 12B of Chapter 158 was deemed applicable and the case lodged, for an increase in rent of up to 2% of the value of the property, is set to continue.