right to housing Archives - aditus foundation

Residential Leases Act: The First Step Forward – Instability and Exorbitant Prices Yet To Be Addressed

Joint Press Statement

A coalition of 20 NGOs active in the social field view the Residential Leases Bill as the first step forward. The NGOs had presented a proposal for rent regulation in February 2018 and reacted to the White Paper on this subject in October 2018. This Bill introduces a much-needed framework with basic rights and obligations on tenants and landlords, and is clearly the result of serious research work and a broad consultation process. However, the Bill very marginally addresses the predominance of short-term contracts that lead to widespread instability, and fails to tackle the most pressing issue of exorbitant rent prices.

The sudden and continuing hike in rent prices is pushing thousands of persons into precariousness, hitting hardest those on low and medium wages and pensions as well as persons in vulnerable situations such as women experiencing domestic violence. Thus, much more will have to be done if Government is to achieve its objective, as set out in the White Paper, of making rent a housing alternative.

The NGOs welcome several provisions of this Bill. We favourably view the obligation on landlords to register contracts that include an inventory and the amount of money deposited, coupled with dissuasive measures against renting without a valid contract. It is also positive that the Housing Authority will be responsible for private residential leases, related enforcement and an adjudicating panel that will speedily decide on minor disputes.

We positively note that tenants will have the right to access utility bills, and that landlords will have to inform the tenant three months before contract expiry whether they intend to renew the lease or otherwise.

The proposed Act would establish a one-year minimum contract period for residential leases. One year is glaringly insufficient to guaranteeing a degree of stability to the tenant, leaving the current situation of short-term contracts more or less unchanged. The coalition of NGOs, when reacting to the White Paper last year, had proposed a three-year minimum in order to start addressing the issue of tenants living precarious lives.

The three-year minimum proposed by the NGOs would be binding on the landlord, with the tenant able to leave the place during the contract period without any penalty on condition they give due notice. Government plans to grant tax credits to landlords who offer contracts that are longer than one year are positive, but this will unfortunately have only a limited effect on incentivising longer-term contracts.

The Act would regulate annual rent-price increases by pegging them to the Property Price Index and capping them at 5%. However, this regulation only applies to increases during contract duration, that is, to those cases where landlords provide contracts that are longer than one year. Unreasonable rent increases, with no limit whatsoever, would still be allowed following the end of the contract period. The coalition of NGOs had proposed that the monthly rent to be paid in any new contract, irrespective of whether it is with the same or a different tenant, should not be higher than 10% of the last monthly rent paid under the previous contract.

This would prevent exorbitant increases in rent-prices following the expiry of contracts. We had also proposed the creation of a Rent Value Index that would enhance public knowledge on the private rental market and lead to a degree of rent-price stabilisation. The Rent Value Index would list rent-value in different areas and for different classes of property according to their size and quality. There would be a rule stating that an initial price should not exceed 10% of the price listed for that particular category within the Rent Value Index. This proposal has not been taken on board.

Besides these points on the principles underpinning the regulation framework, the NGOs also have specific points as feedback regarding some articles, namely:

The Bill allows two exceptions to the obligatory one-year minimum contract term. These exceptions apply when i) proof is presented attesting that the lessee is a non-resident worker or student whose stay in Malta will be shorter than six months, or a resident who needs to rent an alternative primary residence for a period of less than six months, and ii) in the case of room rentals. Whilst the first set of exceptions is understandable, the second should be removed. Tenants renting rooms should be afforded the same protection as those renting a whole unit.

The Bill states that the landlord has thirty days to register the contract from commencement of the lease. However, the law does not spell out that a contract should be in place from the first day of the lease and, when not, the lease is to be considered a de facto one with the protection afforded to tenants in such leases.

In the absence of such a provision, landlords who are caught leasing without a contract can simply claim that thirty days from the commencement of lease have not yet passed, and it will be very difficult for the tenant to prove otherwise.

The Bill gives the right to the tenant to access their utility bills. The Bill should go further and establish a mechanism whereby the tenant has automatic access to their water and electricity bills.

The coalition of NGOs will continue to push for a rent regulation framework that enhances stability and peace of mind for tenants and landlords, eliminates discrimination and which avoids situations of precariousness, always bearing in mind that adequate housing is a fundamental human right.
Andre Callus, on behalf of the Coalition of NGOs.

To this end, the NGOs will be presenting their reactions and proposals during the Bill’s discussion in the Parliamentary Committee prior to its enactment.

Issued by:

aditus Foundation
African Media Association Malta
Alleanza Kontra il-Faqar
Forum Komunita’ Bormliża
Integra Foundation
Isles of the Left
Koperattiva Kummerċ Ġust
Malta LGBTIQ Rights Movement
Malta Humanists Association
Malta Tenant Support
Mid-Dlam għad-Dawl
Moviment Graffitti
Platform of Human Rights Organisations in Malta (PHROM)
SOS Malta
Spark 15
The Critical Institute
The Millennium Chapel
Third World Group Malta
Women’s Rights Foundation
Żminijietna – Voice of the Left

“WHERE HAS OUR HUMANITY GONE?” JOINT NGO STATEMENT ON THE QORMI FARM HOUSING OVER 100 MIGRANTS

We are extremely shocked and saddened at the discovery of around 120 migrants living in absolute squalor in a Qormi farm. As details of the incident continue to unfold, a story of exploitation, abuse and dehumanisation is emerging. It is disconcerting that some people are able to treat fellow human beings with such contempt and disregard for their dignity.

It is now a well-established fact that sustaining economic growth in Malta is dependent on diverse forms of migrant labour. And yet, there appears to be very little acknowledgement of the fact that the migrant labour force forms the backbone of economic growth. Without this acknowledgement, there remains very little space for respect, let alone appreciation and inclusion.

As a result of Malta’s steady economic growth more and more people, across the socio-economic spectrum, are being forced out by the relentless rise in real estate and rental prices. For an increasing number of people, a month’s salary will not cover a month’s rent.

The shortage of affordable and decent housing is affecting hundreds, if not thousands, of persons including Maltese, Europeans and migrants.

A toxic blend of housing costs, labour exploitation and racism ensures that many African migrants are positioned at the far end of the socio-economic spectrum. Over the past few months there have been more and more reports of migrants being forced to pay obscene prices to live in the most abhorrent and inhumane conditions simply because they have nowhere else to go.

This situation is unacceptable and something must be done in order to curb this profit-driven assault on human dignity.

However, evicting migrants with no pre-warning and providing no viable alternatives cannot and must not be part of the strategy. The fundamental human right to housing requires the Government to ensure that all persons are able to secure a roof over their heads, especially the most vulnerable. In this particular case, we emphasise that the Government has a legal and moral responsibility to ensure that the welfare of the entire labour force be prioritised over economic growth and increasing profits for the few.

Specifically, the competent authorities have an urgent responsibility to work with all the relevant agencies to ensure access to dignified accommodation. The Government must immediately pursue a strategy to ensure that decent and affordable housing is made available for all, regardless of where they fall on the economic ladder.

Furthermore, the Government is urged to take concrete action to implement the promised rent reform, taking into account the rent reform proposals put forward NGOs and other stakeholders, to address the skyrocketing rental prices that are hitting Malta’s most vulnerable populations hardest.

It is our duty, as a nation, to ensure that no person lives in such terrible conditions and that we value the humanity of all persons as we do our own. It is also our duty not to turn a blind eye to such terrible incidents, but to act promptly in order to prevent further human suffering and work towards making Malta a truly better place for all.

This press release is being issued by the following 28 organisations:

aditus foundation, African Media Association, Allied Rainbow Communities, Caritas Malta, Christian Life Community – CLC Malta, The Critical Institute, DrachmaLGBT, Drachma Parents Group, Integra Foundation, International Association for Refugees, JRS Malta, Justice and Peace Commission of the Archdiocese of Malta, KOPIN, Malta Emigrants’ Commission, Malta Humanist Association, Malta LBGTIQ Rights Movement (MGRM), Men Against Violence, Migrant Women Association, Moviment Graffitti, Platform of Human Rights Organisations in Malta (PHROM), Richmond Foundation, Solidarity with Migrants, SOS Malta, Spark15, St. Jeanne Antide Foundation (SJAF), Victim Support Malta, We Are, Women’s Rights Foundation.

Rent Regulation for a Fairer Society

Press Conference 24 February 2018

A coalition of seventeen organisations working in different sectors, including aditus foundation, are today launching a document with a Proposal for Rent Regulation in Malta. Malta has almost no regulation in the rental market, and the law of the jungle currently applies. This is forcing many tenants to lead precarious lives, with only temporary roofs over their head and no place to call home.

There is a pressing need for rules in the rental market in order to establish some fairness and to create more stability. Thus, we applaud the Parliamentary Secretariat for Social Housing for working on a White Paper about regulation in this sector, to be published shortly, and look forward to contributing to the consultation process.

The Proposal for Rent Regulation in Malta is based on the recognition that people have a fundamental human right to adequate housing.

Skyrocketing rent prices over the last few years are hitting vulnerable groups the hardest, such as pensioners and low-income groups. Tenants regularly paying their rent are finding themselves forced out of their homes due to overnight exorbitant increases in the rent price requested, or having to use the largest part of their wage/pension for rent payment.

This reality is also increasingly affecting other groups, such as the youth, some of whom have no other option but to live in rented places due to unaffordable property prices.

As property prices continue their steep rise, the number of Maltese people living in rented places is destined to increase at a fast pace and, in a few years, it will not be uncommon for Maltese people to live in rented places. The introduction of effective rent regulation at this juncture is essential to ensure that the rental market is not driven exclusively by the urge for quick profits, without any consideration to the impact on individuals, society and the economy, but is sufficiently regulated for the benefit of all.

We believe that landlords will benefit too from a regulatory framework since this will increase clarity and peace of mind. Rent regulation will not stop landlords from making profits out of rented property.

The rent regulation model in this document has been developed by looking at rent regulation laws in other European countries. In fact, Malta is one of the very few EU countries where there is no effective rent regulation in place. The type of rent regulation present in European countries ranges from controls on initial prices (present in countries such as the Netherlands, Austria, Denmark, Sweden and France) to regulating contract length and rent-price increases (present in countries such as Belgium and Germany).

It is to be underlined that the model in our proposal has no relation to pre-1995 rent legislation that existed in our country. The model we are proposing here would not impose any tenant-landlord relationship, other than that established in contracts that have the agreement of both in the context of clear and fair rules.

The main points of our proposal are:

A tax regime that incentivises long-lets through lower tax rates for longer leases
The creation of a state registry of properties on the rental market as well as the establishment of a public entity responsible for rent regulation
The registration of properties that are up for rent, where the first price set in the first contract will be considered as the ‘initial price’
The possibility for landlords to increase rent-prices yearly during the duration of a contract by a percentage that does not exceed the cost-of-living-increase percentage. Once a contract expires, the landlord is allowed to draw-up a new contract with the same, or a different, tenant. In either case, the price set in the new contract cannot be higher than 10% of the last monthly rent paid under the previous contract. Besides the 10% limit, the price set in any new contract cannot be more than 25% higher than it was five years earlier. This is to avoid having landlords entering into short-term contracts in the knowledge that following each contract, they would be able to increase the rent by 10%
The establishment of a Rent Price Index that lists prices in 1) different areas and 2) for different classes of property according to their size and quality. Landlords would input in the state registry specifications pertinent to their property. An initial price should not exceed 10% of the price listed for that particular category within the Rent Price Index. This would prevent abuse (such as setting unrealistically high initial prices) whilst giving landowners ample leeway in setting initial prices, since the Rent Price Index would in itself reflect market prices, and the initial price can even be 10% higher
A system for the termination of contracts similar to that outlined in employment law
Provisions for clear rules on deposited money, payment of utility bills and upkeep of property
Protection for persons on existing lease agreements
The regulation of Agencies and a legal standing to a Tenants’ Union
A tax on empty rentable property that disincentivizes rent on the black market and increases the amount of properties for rent.

Rent regulation, which is the focus of our proposal, should only constitute one dimension of a strategy on affordable housing. Our country still lacks a comprehensive Housing Policy that aims to ensure the availability of affordable housing, including both affordable properties and affordable rent prices.

Affordable housing depends also on other factors, such as the availability of social housing and the overall strategy with regards to property and construction. Thus, it is being suggested that rent regulation is placed within a broader National Action Plan on property and affordable housing.

The following organisations are putting forward the Proposal for Rent Regulation in Malta:

Moviment Graffitti, Alleanza Kontra il-Faqar, Forum Komunita’ Bormliża, Malta Tenant Support, Malta Humanists Association, The Millennium Chapel, Żminijietna – Voice of the Left, aditus foundation, Malta Gay Rights Movement, The Critical Institute, Spark 15, Mid-Dlam għad-Dawl, Women’s Rights Foundation, African Media Association Malta, Koperattiva Kummerċ Ġust, Integra Foundation and Third World Group Malta.