TENLAW: Tenancy Law and Housing Policy in Multi-level Europe This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement no. 290694. National Report for MALTA Author: Kurt Xerri Team Leader: Sergio Nasarre Aznar National Supervisor: Patrick J. Galea Peer reviewers: Tamara Petrovic, Kart Pormesiter, Fanny Cornette National Report for MALTA Table of Contents 1. Housing Situation ...................................................................................... 4 1.1. General Features ................................................................................... 4 1.2. Historical evolution of the national housing situation and housing policy .............................................................................................................. 4 1.3. Current situation ................................................................................. 14 1.4. Types of housing tenures ................................................................... 15 1.5. Other general aspects of the current national housing situation ... 23 2. Economic, Urban and social factors .................................................... 26 2.1. Situation of the housing market ......................................................... 26 2.2. Issues of price and affordability ........................................................ 30 2.3. Tenancy contracts and investment ................................................... 33 2.4. Other economic factors ...................................................................... 35 2.5. Effects of the current crisis ................................................................ 36 2.6. Urban and social aspects of the housing situation .......................... 38 2.7. Social aspects ..................................................................................... 42 3. Housing policies and related policies ................................................. 44 3.1. Introduction ......................................................................................... 44 3.2. Governmental actors ........................................................................... 45 3.3. Housing policies .................................................................................. 47 3.4. Urban policies ...................................................................................... 50 3.5. Energy policy ....................................................................................... 52 3.6. Subsidization ....................................................................................... 56 3.7. Taxation ................................................................................................ 64 4. Regulatory types of rental and intermediate tenures ......................... 68 2 4.1. Classifications of different types of regulatory tenures .................. 68 4.2. Regulatory types of tenures without a public task ........................... 68 4.3. Regulatory types of tenures with a public task ................................ 71 5. Origins and development of tenancy law ............................................ 73 6. Tenancy regulation and its context ..................................................... 88 6.1. General introduction ........................................................................... 88 6.2. The preparation and negotiation of tenancy contracts .................... 97 6.3. Conclusion of tenancy contracts ..................................................... 104 6.4. Contents of tenancy contracts ......................................................... 115 6.5. Implementation of tenancy contracts .............................................. 148 6.6. Termination of tenancy contracts .................................................... 169 6.7. Enforcing tenancy contracts ............................................................ 186 6.8. Tenancy law and procedure “in action” .......................................... 190 7. Effects of EU law and policies on national tenancy law .................. 205 7.1. EU policies and legislation affecting national housing policies ... 205 7.2. EU policies and legislation affecting national tenancy laws ......... 207 7.3. Table of transposition of EU legislation .......................................... 224 8. Typical national cases ........................................................................ 234 9. Tables ................................................................................................... 240 9.1. Literature ............................................................................................ 240 9.2. Cases .................................................................................................. 247 9.3. Abbreviations .................................................................................... 262 9.4. Legislation ......................................................................................... 263 3 1. Housing situation 1.1. General Features The Maltese archipelago consists of three islands: Malta, Gozo and Comino. The country, which bears the name of the largest island, obtained independence from Great Britain in 1964. The archipelago is situation in the centre of the Mediterranean Sea and it covers no more territory than 316 sq. km. With a population of 421,364 and an average annual growth rate of 0.9% it is the most densely populated country in the EU at 1,333 persons per sq. km.1 Malta joined the European Union on the 1 May 2004 and four years later it also adopted the Euro. The Maltese housing market is characterised by a high home ownership rate and it is usually classified within the Southern European or Mediterranean Welfare Model although 164 years of British rule have also lent it certain characteristics from the Liberal regime. Most planning policies that were implemented in the post-war period are also directly tracable to the popular British concepts of the time. A striking difference with its neighbouring countries, however, is the sustained direct involvement of the State in the provision of housing for the low-income sectors that ranks the Maltese social housing sector as the highest in its region. 1.2. Historical evolution of the national housing situation and housing policy Please describe the historic evolution of the national housing situation and housing policies briefly. o In particular: Please describe briefly the evolution of the principal types of housing tenures from the 1990s on. Explain the growth and decline of the different tenures and the reasons why that happened (e.g. privatisation or other policies). Post-war developments Before the Second World War housing supply was strictly speaking a monopoly in the hands of private developers. It was only the late 1940s and early 50s that witnessed the first large-scale Government intervention in the housing sector. Aerial attacks had razed to the ground thousands of buildings in the densely populated harbour area and as a result there were huge problems relating to housing shortages. The main challenges that the post- war period presented the Maltese administration were in fact the reconstruction of worst-hit zones and the provision of housing for those who were left stranded. At the time Malta was still governed by a Council2 composed of elected and nominated members until the reintroduction of self- government in 1947. The Council had set a temporary repairs section of the 1 Central Bank of Malta, Quarterly Review, 2013:4, 103. 2 The Council of Government was under British rule. 4 Public Works Department, the aim of which was to render fit for habitation the thousands of houses damaged by the war. Yet the policy did not foresee any government-built programmes for the immediate future.3 In 1943, the enactment of the Housing (Requisition) Act allowed Government to requisition4 private properties for state use. This measure, although designed to be temporary lasted four decades. Building activity in Malta was limited to what was necessary. The period of post-war reconstruction witnessed the budding proposals for a proper planning system in Malta. 1945 saw the establishment of the Housing Department, but by that year the number of households living in sub-standard dwellings had gone down considerably5 (the last attack suffered by Malta was in November of 1942). During these years the Housing Department’s clear focus was on allocating requisitioned dwelling houses to the war homeless. The late 1940s kept seeing attempts by the government to counter the spiraling rise of costs of living, but rent restriction proved to be only a temporary panacea since these measures had the counter-effect of discouraging prospective builders from developing new properties.6 The only option for the government was the requisitioning of privately-owned premises which had been left vacant by their owners. By the beginning of the 1950s the problem of war homelessness had been effectively dealt with. Housing was once again taken to the fore of the political agenda under the newly elected government of 1955. Mr. G. A. Atkinson, an advisor to the colonial office, estimated the need of 10,000 new dwellings in the island and his advice prompted the implementation of the three housing affordability schemes: the Second Storey Scheme, the Reconditioning of Sub-standard Housing Scheme and the Rental Housing Scheme.7 Political turmoil with the Colonial Government, however, hampered the domestic