The Registration of Private Residential Lease Agreements and Formalities
The legislation regulating the institute of lease has seen a number of developments over the years. For instance, prior to the amendments introduced in 2010, there was no obligation imposed on the parties to a lease to draw up a written lease agreement. At the time, it was common practice for the lessor and the lessee to merely keep track of payments by recording them into a rent book.
The 2010 amendments introduced other changes; such as; establishing a minimum rent amount in respect of residential leases and introducing formalities that must be observed for a lease agreement to be valid at law.
This legislation regulating lease agreements has now been amended through the enactment of the “Private Residential Leases Act” (Chapter 604 of the Laws of Malta) which was introduced primarily to ensure standards of fairness, clarity and predictability in contractual relations between lessors and lessees.
The Private Residential Leases Act applies to private residential leases that are entered into or renewed after the 1st day of January 2020. The amendments brought about by the new Act include a rehash of the formalities required for a lease agreement to be valid at law. These are:
a) a description of the property to be leased;
b) the agreed use of the property to be leased;
c) the lease term;
d) whether and how the lease may be extended;
e) the agreed rent to be paid and the manner of payment;
f) the amount deposited by the lessee by way of security for the performance of the obligations indicated in the lease agreement;
g) an inventory, in the form of documentary evidence, attesting the condition of the property and the state of any furniture and domestic appliances supplied by the lessor.
In order to circumvent issues of legal interpretation and the consequent invalidity of lease agreements, the government has introduced an online portal which provides various templates incorporating the minimum formalities required by the new law (https://rentregistration.mt/forms/).
Additionally, the Private Residential Leases Act also imposes an obligation on the lessor to register the lease agreement with the Housing Authority within ten (10) days from the commencement of the lease. Any lease agreement entered into on or after the 1st day of January 2020 which is not registered shall be deemed to be null and void. Indeed, the law gives the right to a lessee to register a lease agreement at the expense of the lessor in the event that the latter fails to register the same. Registrations may be completed online through the website www.rentregistration.gov.mt.
During the first year the registration fee is set at €10, while the fee for late registration is set at €120. The Private Residential Leases Act establishes a transitory period of one (1) year for the registration of residential leases which were drawn up after the 1st June 1995, but prior to the coming into force the new Act, and which would still be in force on the 1st January 2021, whether within the original term or a renewed one.Author: Joseph Mizzi Related Practice Area: Business