Rent reform is long overdue

Over the years, successive governments have refrained from carrying out essential far-reaching changes to rent legislation.

The emergency which justified the original restrictive legislation was instead made more restrictive over the years. Court decisions from Valletta to Strasbourg denouncing the current state of play have been piling up. The rent reforms of 1995 and 2008 cannot be discarded, however they were not followed up. They were appropriate small first steps but too much time elapsed with no adequate follow-up action. Successive governments have been reluctant to disturb a hornet’s nest hoping that somehow time will solve the matter.

It is within this context that Government’s proposal to carry out a root and branch reform of the 9,700 remaining pre-1995 tenancies is thus a responsible and courageous political move. Through it government will be shouldering the accumulated shortcomings of all its predecessors, red and blue, which have generally ignored the matter over the years. The Greens in Malta have over the years actively campaigned on this specific issue: justice for the landlords must be carried out together with adequate protection of vulnerable tenants.

At the time of writing the statements made by Prime Minister Robert Abela and Social Accommodation Minister Roderick Galdes have not been followed up with the publication of the specific legal texts which will implement the policy declarations made.

The proposals as described so far, are, in my view acceptable in principle. It is however expected that when the detailed legislative proposals are published, these are accompanied by studies carried out, including costings. An essential healthy public debate needs to be adequately buttressed by well-researched background information.

The proposal as spelled out by Abela and Galdes is based on two fundamental points. It seeks to tread the difficult path of protecting both tenants and landlords.

Tenant protection will be achieved through ensuring that vulnerable tenants will at all times have access to a home, be it their current one or, in some cases, possible alternatives provided through access to social accommodation. This is essentially a transitory provision applicable to the identified 9,700 pre-1995 tenancies and is undoubtedly a restrictive condition on landlords. It is however of central importance. It is to be counterbalanced by a mechanism which determines a more reasonable determination of rental income which will be coughed up by the state in part or in whole depending on the vulnerability of the tenant. It is also a mechanism which over the past years has generally been accepted by the Courts as constituting a fair and reasonable rental income.

Of fundamental importance in the proposal as communicated so far is the manner of determination of the payable rent. This will not be left completely to the whims of market forces as it will be capped at 2 per cent of the property’s value. This signifies that, hopefully, some lessons have been learnt from the fallout resulting from the complete liberalisation of the post-1995 rental market.   

The proposal will be addressing an accumulated social problem with a substantial financial outlay consisting of millions of euros annually.

So far, the rent payable in respect of pre-1995 tenancies have been subsidised by the landlords who, in a number of cases are themselves in need of help! It is appropriate that this support is shouldered by the whole community, through the state, who now steps forward to shoulder the problem in the spirit of national solidarity.

So far most have acknowledged that pre-1995 tenancies are a tough challenge. What matters, now, is that we face this challenge head-on. It cannot be postponed any further.

published on The Malta Independent on Sunday: 7 March 2021

Magħna taf fejn qiegħed

 Il-ġimgħa d-dieħla nisimgħu s-suffara li ssejjaħ elezzjoni ġenerali.

Alternattiva Demokratika ser terġa tkun hemm fuq id-Distretti kollha. F’uħud b’kandidat wieħed, f’oħrajn b’iktar.

Il-programm elettorali ta’ Alternattiva Demokratika bħal dejjem ser ikun ċar fuq issues li partiti oħra jevitaw. Hekk ġara fil-passat dwar id-divorzju u r-riforma tal-liġijiet tal-kera. Il-partiti l-oħra evitaw dawn is-suġġetti fil-kampanja elettorali imma mbagħad kellhom jiffaċċawhom fil-Parlament.

Alternattiva Demokratika m’hi ostaġġ ta’ ħadd, għalhekk titkellem ċar.

AD tkompli tkun l-akbar difensur ta’ dak li baqa’ mill-wirt ambjentali Malti, tistinka għal aktar spazji pubbliċi u infrastruttura aħjar. AD mħiex ostaġġ tal-kaċċaturi u n-nassaba, l-iffissati fil-logħob tan-nar, l-abitanti illegali tal-Armier, u spekulaturi u żviluppaturi bla rażan. Issejjaħ għal politika sostenibbli dwar l-art u l-ilma, għal politika ekonomika progressiva, bħal żieda fil-paga minima u taxxa mit-tielet proprjetà vojta lil hinn.

AD hi favur politika soċjali umana u drittijiet ugwali għal kulħadd, fosthom il-minoranzi fil-politika soċjali u tal-familja, bħall-persuni b’diżabilità, il-persuni LGBT u kull tip ta’ familja. AD hi favur ugwaljanza bejn is-sessi, id-dekriminalizzazzjoni tad-drogi għall-użu personali, u l-għajnuna għall-vittimi tad-droga minflok kriminalizzazzjoni.

AD lesta biex taħdem ma’ ħaddieħor, skont programm konġunt maqbul. Taħdem biex dak miftiehem jitwettaq meta nkunu fil-Parlament. Bħala sieħeb minuri, AD tistinka biex tkun żviluppata il-politika bil-kunsens u ma theddidx li tgħaddi tagħha akkost ta’ kollox, konxja mill-fatt li dan iġib l-instabilità.

Vot għal Alternattiva Demokratika jkun vot għall-bidla fil-mod ta’ tmexxija u favur stabbilità.

Jekk temmen li għandhom jkunu fuq quddiem il-ġustizzja soċjali, id-drittijiet ċivili, il-ġustizzja ambjentali, l-iżvilupp sostenibbli, il-modernizzazzjoni ekoloġika u, fuq kollox, ir-riforma tal-istituzzjonijiet għat-tisħiħ tad-demokrazija, mela taf fejn qiegħed mal-Alternattiva Demokratika. Vot għall-PN jew għall-PL ifisser vot għas-sistema staġnata taż-żewġ partiti.

Jekk vera trid il-bidla, ivvota Alternattiva. Magħna taf fejn qiegħed.

Ħarsien għal min jixtri daru

minn Carmel Cacopardo

ippubblikat nhar l-Erbgħa 21 t’April 2010

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Għadu kmieni biex jiġi eżaminat l-effett tar-ri­for­­ma tal-liġijiet tal-kera. Iridu jgħaddu ftit tas-snin oħrajn biex dan ikun jista’ jsir. Li qed iseħħ bħalissa huwa l-aġġustament tal-kirjiet eżistenti. Kemm dawk residenzjali kif ukoll dawk kummerċjali. Aġ­ġus­tament li ilu jistenna aktar minn 60 sena biex isir!

Sadanittant in-nies tibqa’ tixtri l-proprjetà u kontinwament teżamina l-opportunitajiet li s-suq jipprovdi. Is-suq tal-kera jeħtieġ ftit tas-snin biex jiżvilup­pa mill-ġdid. Imbagħad ikun ap­prezzat li hemm ċirkostanzi fejn jaqbel li tikri flok tixtri pro­p­­rjetà.

In-nies li tixtri sfortunatament mhux dejjem hi konxja tad-drittijiet tagħha. Min ibigħ dan jafu sewwa u mhux darba jew tnejn li jkun hemm min japprofitta ruħu minn din is-sitwaz­zjoni. Huwa fl-opinjoni tiegħi meħtieġ li min ibigħ ikun obbligat li jipprovdi informazzjoni sħiħa u korretta dwar dak li qed jinbiegħ. Dan jgħodd kemm meta l-bejgħ isir direttament mis-sid kif ukoll meta jsir permezz ta’ aġent.

F’diversi pajjiżi oħrajn hekk isir. B’mod partikolari l-aġenti tal-proprjetà (‘estate agents’) għand­hom rwol importanti f’dan is-sens. Min jagħmel użu mis-servizz ta’ dawn l-aġenti ġus­tament jassumi li dawn jassi­guraw il-kwalità. Jiġifieri meta biex tixtri l-proprjetà tagħmel użu minn servizz ta’ aġent tal-proprjetà inti tassumi li dan l-aġent ikun diġà eżamina sewwa dik il-proprjetà. Tassumi wkoll li l-aġent ikun jista’ jiggwidak lejn dik il-proprjetà l-aktar addattata għall-ħtiġijiet tie­għek. Fl-ebda ħin ma jgħaddi­lek minn moħħok li meta aġent jaċċetta fuq il-kotba tiegħu xi proprjetà biex joffriha għall-bejgħ, din tkun difettuża, għax fost affarijiet oħrajn ma tkunx mibnija skont il-permessi. Meta tmur għand l-aġent tmur għax tafdah u allura tistenna li jagħtik l-informazzjoni kollha li tkun meħtieġa. Ma tistenniex li aġent ma jinformakx għax ma jafx, jew, agħar li jaħbilek informazzjoni biex ikun jista’ jdaħħal il-kummissjoni dovuta lilu mill-bej­jiegħ hekk kif jiġi negoz­jat il-bejgħ.

Sfortunatament l-affarijiet mhu­­­miex dejjem hekk. Għal­kemm in-numru ta’ każijiet mhu­­­wiex wieħed kbir, dan qie­għed dejjem jiżdied. Xi aġenti qegħdin joffru proprjetà li dwar­ha jew ma jagħmlux il-verifiki inkella jagħlqu għajnejhom għal dak li jaraw. Ma jiħdux pjaċir meta xerrejja potenzjali jirrealizzaw li kienu se jingidmu u wara li jieħdu parir ifittxu li jħassru kull impenn li jixtru jew konvenju li jkunu għamlu (meta dan ikun possibbli).

Dawk li jfittxu parir għax ma joqogħdux fuq dak li jgħidilhom l-aġent jagħmlu dan biex jassiguraw ruħhom li ma jin­gid­­mux. Sfortunatament iżda, hemm ftit, dawk li jafdaw wisq, li xorta jingidmu. Il-flus li jkunu laħqu ħallsu b’sagrifiċċju mhux dejjem ikun faċli biex jiġbruhom lura.

Mhux darba jew tnejn li ltqajt ma’ każijiet li l-proprjetà offruta għall-bejgħ minn aġenti tal-proprjetà tkun difettuża fis-sens li tkun mibnija b’mod li ma tkunx koperta b’permess tal-bini. Bosta drabi, għal min jif­hem, ma jkunx diffiċli li tiden­tifika dan il-fatt. Mhux il-każ li nsemmi hawnhekk każijiet spe­ċi­fiċi, iżda naf b’numru. Xi dra­bi l-problemi jitfaċċaw wara l-iffirmar tal-konvenju u xi drabi wara l-kuntratt ukoll.

Dawk li jixtru l-proprjetà jagħm­lu sagrifiċċji kbar biex ikunu f’pożizzjoni li jħallsu għall-akkwist li jagħmlu. Jagħm­lu użu minn dak li jkunu faddlu kif ukoll jissellfu mill-banek. Għand­hom dritt għal servizz ħafna aħjar milli qed jingħataw uħud. Min joffri jew jiffa­ċilita dan it-tip ta’ bejgħ qed jonqos u jagħti isem ħażin lil kul­ħadd.

L-ebda wieħed mill-aġenti tal-proprjetà ma jixtieq jieħu l-inizjattiva biex ma jaċċettax fuq il-kotba tiegħu proprjetà difettu­ża. Jippreferu li jaħslu jdejhom billi jgħidu li mhix res­ponsab­biltà tagħhom li jieħdu dawn it-tip ta’ deċiżjonijiet.

Ikun f’loku li l-aġenti tal-pro­prjetà jieħdu l-inizjattiva huma u jistabbilixxu bejniethom rego­li li japplikaw għall-aġenti kollha li bihom jipproteġu l-ewwel nett lill-konsumatur u b’mod indirett lilhom infushom ukoll. Jekk dan idum ma jsir naħseb li wasal iż-żmien li l-Parlament jikkonsidra li jirregola hu din il-ħidma. Għax il-konsumatur jeħ­tieġ li jkun protett minn sidien u aġenti bla skrupli.

Greening Housing Policy

 

published on Sunday, September 21, 2008

by Carmel Cacopardo

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The social objectives of housing policy can and should be attained without causing further damage to our urban fabric and natural environment.  Housing like all other areas of policy should be compatible with the environment, otherwise it should be seriously re-examined.

 

Over the years, in the absence of a rental market (for most) home ownership became the only manner in which they could acquire a home. As a result today around 70% of Maltese families reside in owner occupied residences. The reform of rent legislation currently in the pipeline will introduce an alternative through the reassembly of a rental market. Over time this should ensure that it is once more possible to live in a reasonable and decent home without being its owner. A forty year mortgage could be history for the upcoming generations.

 

Ensuring that each and every one of us has decent accommodation  housing his family is a social need, but the decision as to whether to own a residence is not. It is an investment decision which in a great number of cases is today subsidised through the taxpayer’s pocket under the guise of social policy. This distinction has not been made easy by a sixty year inertia in reforming rent legislation. 

 

With at least 60,000 vacant properties at hand there is surely no social need to build more dwellings except maybe to justify the existence of the construction industry which currently employs some 11,500.

 

The rent reform White Paper rightly points out that whether one rents or purchases a residence is an economic choice. Although such a statement is theoretically possible, at this point in time no choice is available.

 

In the absence of a rental market, home ownership has for years been the focal point of housing policy. Public monies have been used to construct housing estates containing hundreds of dwelling units whilst at the same time at least 60,000 vacant dwellings have been allowed to accumulate. In the long term this is the situation which the rent reform exercise will have to address.

 

The process will be slow and painful. It will reverse past injustices. It will however inevitably create new pains as well as new gains.

 

The community will be a net beneficiary as in the long term there will be less building construction going on while it is hoped that no more agricultural land will be taken up. The pressure for demolition of old properties should dwindle. Vacant properties may at last generate a decent income for their owners.

 

In order to survive the construction industry will have to commence a restructuring exercise. A larger part of it will have to shift from construction works to the rehabilitation of dilapidated properties as well as participating in a much needed urban regeneration. There will be a demand for skills which are not sufficiently available today. The traditional building trades will be highly in demand, slowly at first but at an increasing rate subsequently. Sufficient time is available for retraining in order that the shift causes the least pain possible in the employment sector.

 

The rent reform currently in the pipeline is the first step in the inevitable greening of housing policy. It will tackle the most obvious environmental deficiency of social policy in Malta and it will in the long term prove that it is possible to attain the highest level of social standards in housing policy and at the same time observe all environmental norms of modern society.

 

Other steps will necessarily follow.  If one pays rent at commercial rates it will be logical to seek smaller residences thereby reducing the rental bill by doing away with unnecessarily large homes. Coupled with the diminishing size of the typical Maltese family this will lead to an increased mobility of the family unit, moving from a small dwelling on its formation, to a larger one when additional space is needed and possibly back again to a small residence in old age.

 

These practical consequences in addition to an effective moratorium on large scale building construction would result in a reduction of the expense required in running a decent home. This saving would be primarily in the energy costs which could be reduced substantially through the use of smaller residential units.

 

In an article published by Joseph Darmanin in the BOV Review entitled The Computation of a Housing Affordability Index for Malta  in the Spring 2008 issue  it is concluded that first time buyers are gradually being pushed out of the housing market. Housing affordability is presently linked to purchasing of property, as a rental market is practically inexistent at the lower end of the scale. Housing affordability is gauged by comparing the Housing Price Index with the disposable income. It resulted to Joseph Darmanin that in 2007 the median house prices were 8 times the average per capita income whilst in 2000 they were just 6 times the average per capita income. This leads to the conclusion that over the past eight years it has become less affordable to purchase a property. At the lower ends of the scale the pinch is felt sufficiently to be able to pose the question as to whether the whole “home ownership policy” at the forefront of housing policies for the past 25 years is sane.

 

There are no easy answers to obvious questions which everybody has been evading for so long.

 

The are obviously two options.

 

The first is more of the same insane home ownership politics as a result of which we may end up with banks dishing out home loans repayable over 60 years or more such that it will be possible for our children to inherit a mortgage in addition to a home!   With the spiralling cost of property and more of the same this will be the inevitable result.

 

The alternative is to abandon home ownership as a social policy tool and substitute it with a policy of assisted rent. Those who cannot afford to buy their home should not be forced to. They have the right to an alternative.

 

Rent reform if adequately tackled can provide the solution. Those who cannot afford to own their own home can be assisted to rent a suitable residence: suitable for their needs. There is no need for a large three-bedroomed flat at the taxpayers expense for a newly wedded couple: a one-bedroomed one would be sufficient initially.  Subsequently they can move on depending on their real needs.

 

I am aware that this runs contrary to the manner in which housing politics has developed over the past 60 years. The state has always been expected to provide for all. In reality it cannot, never has and should not be expected to. Rent reform paves the way for a role of the private sector to place on the market properties which can be rented out. The properties required are available. The only heavy investment required is in goodwill! Financial outlays required will in the long term be significantly lower than those made available to date, and most probably with better results.

 

This will lay the foundation for housing policy to commence on the path of sustainable development. Social needs will in this manner be satisfied through a respect for environmental norms.

The Nature of Green Politics

published on September 13, 2008

by Carmel Cacopardo

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On being elected leader of the Greens in England and Wales last week, MEP Caroline Lucas stated: “There is a huge number of people out there who want to hear our message and we want to get better at getting it across. I want to get our message out about social justice. Everyone knows we are the party of the environment. What fewer people know is that if you are looking for the real progressive force in British politics today, it is the Green party”.

During the March 2008 general election, the PN took on board most of AD’s environmental policies. The MLP is now taking on board AD’s campaign on civil rights: divorce, gay rights, local council voting at age 16. AD’s campaign on rent reform has borne fruit. A consensus seems to be developing around AD’s electoral proposal on the energy surcharge: having a low or no charge for basic use and a high charge for excessive users.

An impressive contribution by a political party which has not yet made it to Parliament!

It is to early to state whether the PN and/or the MLP are trying to be greener than the greens. The emerging interest of the PN and the MLP in Green politics is positive as, in fact, this is coalition building by the back door!

It is to be borne in mind that Green parties are not restricted to environmental issues although, as stated by Ms Lucas, the environment is that area of politics with which Greens are mostly associated.

The Charter of The Global Greens, approved in Canberra in 2001, in fact identifies six principles forming the basis of Green politics: ecological wisdom, social justice, participatory democracy, non-violence, sustainability and respect for diversity. Viewed together, they form the basis of Green politics. All six are enshrined in the policy positions taken locally by AD.

Humankind is part of the natural world. We must respect all the other species forming part of this world. All forms of life are to be valued as all belong to the same natural world. This signifies that we must learn to live within the ecological and resource limits of planet earth and that we must ensure fulfilling the basic duty to respect biodiversity and life-support systems. Where we have little or no knowledge we must be cautious and tread carefully, thereby ensuring that we do not prejudice present and future generations. Basic to the achievement of social justice is the equitable distribution of resources. Social and environmental justice are thus intertwined.

Green parties the world over are firm believers in subsidiarity. AD will by the time of publication of this article have made public its proposals for a reform of local government. AD will argue for a strengthening of local government in Malta through devolution of additional responsibilities, clearer funding rules, Green tendering procedures at a local level and the need to introduce a referendum to decide on development projects having a significant impact on the locality.

The Greens respect diversity. Diversity of opinion. Ethical pluralism. Diversity in gender orientation. This has to be reflected in everyday politics. Hence, the Greens stand up against homophobia and support the right of gays and lesbians to be treated as equal persons of our community to which they too contribute through their daily toil.

The Greens favour divorce in contrast to those who believe in the theocratic powers of the state of imposing the beliefs of a section of the community on the rest. Those who believe in the indissolubility of marriage have a right to freely practise their beliefs. However, they have no right to impose their beliefs on the rest of the country. The state in Malta is still theocratic in this respect. It is about time that the winds of change open up the doors of ethical pluralism. Divorce has been recognised in Malta since 1975 but only for those who have the financial means to proceed to a foreign jurisdiction.

The effects of the March 2008 electoral campaign will take some time to sink into the psyche of the Maltese voter. It is not just about electoral promises which will not be fulfilled. Nor about scandals such as the Mistra one or the reversal of dubious pre-electoral decisions such as that on the development at Transfiguration Avenue in Lija. Voters are realising that the major parties avoided issues in March but subsequently had to face them. The shipyards debacle is a case in point wherein government intransigence had to give way to a civil society insistence on dialogue. Common sense eventually prevailed.

In the months ahead, the Greens in Malta will continue to face the issues and present to the public the progressive options which lie ahead.

AD u l-White Paper dwar il kera

 

Illum, kmieni wara nofsinnhar iffurmajt parti minn delegazzjoni ta’ AD li tlaqgħet ma John Dalli, Ministru tal-Politika Soċjali.

 

Il-laqgħa serviet biex AD għaddiet lill-Ministru Dalli kopja tar-reazzjoni ta’ AD għall-White Paper intitolata Il-Ħtieġa ta’ Riforma. Sostenibilita. Ġustizzja. Riforma.

 

Għal AD ir-riforma għandha titwettaq billi filwaqt li ssir ġustizzja mas-sidien tal-propjeta li refgħu fuq spallejhom il-piż ta’ emerġenza permanenti, ma jinħolqux inġustizzji ma l-inkwilini, prinċipalment ma dawk li diġa huma fir-riskju tal-faqar.

 

L-ewwel skop tar-riforma hi li ssir ġustizzja.

 

It-tieni skop huwa wieħed ambjentali u dan billi meta l-propjetajiet preżentment vojta jitqegħdu fuq is-suq ser ikun hemm inqas ħtieġa ta’ bini ta’ iktar propjeta. Inqas propjeta titwaqqa’, inqas art verġni tinbena.

 

It-tielet skop huwa wieħed ekonomiku : il-pajjiż jutilizza aħjar ir-riżorsi li għandu.

 

Fil-waqt li AD taqbel b’mod ġenerali mal-proposti stabiliti fil-White Paper hemm tlett aspetti partikolari li tħoss il-ħtieġa li tissottolinea:

 

l-ewwel : ir-riform proposta tintrabat mal-familja tradizzjonali u tinjora forom ġodda ta’ familja li qed jiżviluppaw f’Malta ukoll; fosthom il-familja komposta minn koppja mhux miżżewġa kif ukoll familja komposta minn żewġ persuni ta’ l-istess sess; dawn il-familji ukoll għandhom id-drittijiet li liġi riformata tal-kera għandha tirrikonoxxi;

it-tieni : ir-riforma tipproponi perjodu transitorju twil wisq (għoxrin sena) għall-kirjiet kummerċjali; dan il-perjodu ser iservi ta’ tentazzjoni għal min jitħajjar idawwar l–arloġġ lura;

it-tielet : hemm kirjiet li s’issa huma esklużi mill-proposti li saru; dawn jikkonċernaw il-każini tal-banda, każini sportivi, każini tal-partiti politiċi u kirjiet ta’ propjetajiet minn NGOs li jservu ta’ bażi minnfejn dawn iwettqu l-ħidma tagħħom; fil-waqt li hemm bżonn li anke dawn il-kirjiet ikunu liberalizzati, imma jrid ikun ċar li l-komunita’ permezz tal-Gvern għandha tkun lesta li toħroġ sussidju kulturali/sportivi biex tgħin lil dawn l-għaqdiet anke b’apprezzament għall-kontribut li qed jagħtu għall-binja tal-fibra kulturali, sportiva u soċjali ta’ dan il-pajjiż.

 

Għal snin twal Alternattiva Demokratika kienet l-unika leħen favur ir-riforma tal-liġijiet tal-kera. Għandna sodisfazzjoni kbir li issa n-numru ta’ dawk li qed jaqblu qiegħed jiżdied.

 

Interweaving Social and Environmental Policy

published on Sunday July 13, 2008

by Carmel Cacopardo

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Rent reform brings to the fore two very important issues: social policy and sustainability. On the one hand is the delicate balance between property rights and social justice, on the other is the need to use land resources sustainably in the interests of present and future generations.

AD has been campaigning for rent reform for years. In 2006, as part of its Rent Reform Campaign, AD published a document entitled Rent Reform: A Declaration of Principles in which it emphasised that rent reform should be all-embracing and not limited to legislative proposals. Rent reform requires buttressing by adequate housing policies in order to ensure that government creates the required environment that is so necessary for the development of a healthy rental market. A healthy rental market that matches the supply of residential property with demand will reduce the urge to take up more virgin land for so-called development, as existing demand can be successfully met from the stock of vacant property.

Through the removal of unnecessary shackles, rent reform aims to use the market to provide a decent home for everyone in the full knowledge and respect of mutual rights and obligations. It should be clear to one and all by now that while everyone has the right to a decent dwelling, this does not equate to home ownership. Unfortunately, this is what has happened in the past quarter century.

As the recently published White Paper rightfully emphasises, whether one purchases or rents a property is an economic choice determined by what is currently available on the market. In the past 60 years the rental market has been distorted and not permitted to develop. Instead, the state, through its organs, assumed the functions of a property developer. While the state built housing estates, gobbling up virgin land, it established a pattern of behaviour to be followed by so-called developers. The end result is 53,000 vacant properties as in November 2005. Some would say it is closer to 70,000 now. It is difficult to obtain a worse certificate than this to attest to the mis-management of our built up property!

The White Paper, entitled The Need for Reform. Sustainability, Justice and Protection, is not the end of the story. It is just the end of the beginning, hopefully marking the political decision to act! It seeks to redefine the legal framework within which the rental market will be permitted to develop in the immediate future. Through a set of transition periods it will slowly dismantle the barriers set up over the years that limit the access of owners to their properties. The pace of the transition is undoubtedly not acceptable to all. Some wish to see it move faster; others consider it as already being too fast.

The manner whereby leases are only inherited in specific and predetermined circumstances is the central proposal of the White Paper in relation to residential leases. The White Paper limits the inheritance of leases to three instances. The first instance is the case of the surviving spouse, the second is that of the tenant’s offspring and the third instance is that of parents aged over 60. In the first instance, no changes are being proposed to current legislation. In the latter two instances, the White Paper limits this right as a one off occurrence in respect of those who, on 1 June 2008, had been residing with the tenant for five years or more. All other cases not falling within these parameters will, in terms of the White Paper, be entitled to a transitional five-year lease on the basis of paying the market rent. Subsidies by the state to assist those who cannot afford this will be available through reinforcing existing rental aid schemes administered by the Housing Authority.

The White Paper rightly introduces into the equation the economic worth of those who would inherit the lease. Those who are entitled to inherit a lease but earn in excess of €25,000 per annum, or have an economic worth in excess of €125,000, will have to shoulder the expenses of their own accommodation. Subject to a temporary and transitional lease of three years’ duration at a rental value determined at three per cent of the value of the property, the White Paper reasonably recommends that in such cases the right to inherit a lease will not be operative.

The point of contention with all this is that government is limiting itself to the civil rights of the traditional family, ignoring the fact that society in Malta is not static and has developed alternative families. At the time of writing, a news item is emphasising that one out of every five births in Malta in 2007 took place outside wedlock. That is 20 per cent. It implies alternative families, in particular single-parent families as well as unmarried couples who are cohabiting.

The White Paper thus limits itself to traditional definitions of the family, ignoring in the process alternative family units made up of unmarried couples, single parents or same sex couples. Pointing this out and taking a definite stand in favour of the civil rights of alternative families does not mean taking a contradictory stance on the proposed rent reform: insisting on the removal of restrictions on the one hand and promoting further restrictions on the other. It means that rent reform also has to take note of the social realities of this country and should ensure that, in its determination of the civil rights of tenants, no section of the Maltese population should be discriminated against. In this particular aspect, the White Paper proposes an ostrich-like social policy. It seems that, just like the ostrich, the authors of the White Paper believe that if they ignore the emerging social realities they will disappear. In fact they are continually on the increase. These are not new rights but existing rights that are as yet unrecognised by the Maltese state. In this respect, the White Paper needs to tune in to the realities of Maltese society in the 21st century.

In dealing with commercial leases, the White Paper is very generous with the current pre-1995 tenants. It proposes a maximum 20-year transition period, which I think is excessively long. Such a long transition period gives elbow room to those who would undoubtedly be urged at some point in time to turn the clock back 60 years. The shorter the period, the better: 10 years as a maximum transition period would, in my opinion, be more than enough.

Those who own properties let to band clubs will undoubtedly not consider the White Paper acceptable, as it does not address their problem. In fact, the White Paper places the issue of property let to political parties, band clubs, sports clubs and other organisations considered of a social nature outside its parameters. Minister John Dalli has publicly clarified that government intends to address these issues, hopefully through the same initiative as the rest of the rent reform process. This is another headache yet to come. But it is no use discussing these issues in a vacuum. It would be best to postpone comments until such time as specific proposals dealing with them are presented for public consultation.

On the whole, the proposals put forward by the White Paper on Rent Reform should result in the interweaving of social and environmental policy. Through ensuring that the market works without undue interference, with government functioning as a regulator instead of assuming the role of a market basher, a developed rental market can in time mop up vacant properties, thereby reducing the need for the large scale “development” that has turned the Maltese Islands into one large building site.

When considering the above, AD is of the opinion that, overall, the White Paper is a positive exercise that aims to reach a reasonable balance between different interests in civil society. If government takes serious note of all the alternative proposals that will be announced in the public debate, its proposals may be substantially improved. AD is willing to act as a social and political partner in order to ensure a reform that is sustainable in social, economic and ecological respects.

Carmel Cacopardo is an architect and civil engineer and spokesman for Alternattiva Demokratika on sustainable development and local government.

 

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You may also view the following posts in this blog. They discuss the Rent Reform White Paper  :

https://carmelcacopardo.wordpress.com/2008/07/01/riforma-fil-ligi-tal-kera-l-ewwel-reazzjoni-ta-ad/

https://carmelcacopardo.wordpress.com/2008/07/01/the-rent-reform-white-paper/

https://carmelcacopardo.wordpress.com/2008/07/08/cleaning-up-the-mess/

Cleaning up the mess

 

published Tuesday July 8, 2008

by Carmel Cacopardo

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Over the years governments could not be bothered with rent reform. The resulting mess is such that the purposes of rent reform at this stage is primarily one of restoring sanity in the use of built-up resources. The White Paper aims at removing the accumulated injustices faced by generations of landlords, without creating new ones, and paves the way to reduce the perceived need to embark on more so-called development.

As aptly pointed out by the White Paper, the decision whether to buy or to rent is an economic choice depending on whether the annual rental value of a property is more attractive than the cost of purchasing property. This is an issue for the market to resolve over a period of time. To date the state has repeatedly intervened, strangling the rental market, encouraging home ownership and thereby putting on high gear the rape of our countryside and village cores. Rent reform is thus not just concerned with the rights of landlords and tenants but with housing policy, sustainable development and social and environmental justice.

A useful point of departure in this discussion is that throughout the years, primarily as a result of the maze of rental legislation, it has been next to impossible to distinguish between the right to accommodation and the right to own a home.

The concept of home ownership as successfully marketed by different governments and skilfully manipulated by the construction industry is considered a right.

The result is that our families are burdened with mortgages spanning a lifetime for properties which rather than providing them with a home are providing them with an investment which most can ill-afford but yet are forced to have.

The net beneficiary is the building industry, which as a result of this artificial demand keeps on churning out residential units at increasing prices and reducing sizes, at the end pleasing no one but themselves and the banks!

The state through the Housing Authority (and its predecessors) is the major culprit in this respect. Throughout the years political parties viewed the concept of home ownership as the means through which to make good the vacuum created by rent legislation, which was patched up in time of emergencies and has thereafter been retained as a permanent relic of these emergencies.

The White Paper entitled The Need For Reform. Sustainability, Justice And Protection, seeks to reverse all this. It attempts a solution through 33 recommendations most of which are valid and should be supported.

They are, however, underpinned by three issues which merit some discussion.

Firstly, there are too many perceived exemptions.

The separate consideration of agricultural leases may be valid. But this has to be considered within the context of a detailed examination of the agricultural sector, including measures required to halt the further sub-division of agricultural holdings. The party in government had tackled this issue in an electoral manifesto presented for the 1981 general elections. It needs to be revisited urgently and simultaneously with an examination of agricultural leases.

The White Paper is also not applicable to political parties, band clubs, sports clubs and other organisations of a social nature. Social Policy Minister John Dalli has clarified that this area of the rental market will be liberalised too, although they are not covered by the White Paper recommendations.

As long as the issue of rent reform applicable to agricultural property, political parties and other organisations is also tackled in the same spirit found in the White Paper there should not be any difficulty with its acceptability.

The second issue is an anachronism in that the White Paper selects the traditional family as worthy of social protection and dumps emerging relationships. This ostrich-like social policy ignores cohabiting couples and same sex couples. I have no difficulty in subscribing to a policy of reinforcing and defending the traditional family but I find it reprehensible that those who select an alternative lifestyle are dumped as not being worthy of the same civil rights as the rest of us.

Thirdly, the White Paper creates transitional protective periods which are too long. The 20-year transition period for commercial leases, in particular, could easily be halved. This would reduce the urge of those who could be tempted to lobby for a reversal of the proposed reforms.

Barring the above, the White Paper is positive and presents a reasonable proposal on the basis of which a reform of rent legislation can be carried out. If the government takes serious note of all the alternative proposals that will be announced in the coming weeks, the White Paper recommendations may be substantially improved.

The Rent Reform White Paper

uploaded on 1 July 2008 at 11.55am

 

In this contribution I will limit myself to commenting on the 33 recommendations which the Rent Reform White Paper brings forward for our consideration. The comments are the following :

 

The White Paper starts off  by requesting a guarantee not to advocate interventionist measures. This is obviously directed at the MLP in order to declare itself not to reverse any changes made. AD is in agreement in principle with the general thrust of the White Paper, though there are a number of details which are not to our liking.

 

As a first point we deal with exemptions. Political parties should not be exempted. They should shoulder  the burden. Secondly rather then exempting band clubs and sports associations government should fund these associations through specially allocated monies earmarked for culture and sports. Thirdly agricultural holdings have been left out of this exercise. Hopefully an additional exercise limited to agriculture will be carried out separately.

 

The White Paper discusses the issue of vacant property. Obviously this can only be resolved if the causes for property staying vacant are tackled. Having easier procedures to resolve such inheritance disputes would be a help – both time-wise and moneywise. The second cause is identified as being that of owners not being known – this should relate to a very small amount of properties : land registration of property should further reduce these cases. The third cause is economic cost of rehabilitation : MEPA has reduced the size of a number of Urban Conservation Areas in 2006 thereby reducing restrictions on the redevelopment of properties in the effected areas. But in the case of properties in sensitive areas rehabilitation will undoubtedly remain costly. This could be tackled through identifying a use compatible to the property  and making available public funds to assist in the rehabilitation. Owners have a duty of care in the case of our historical heritage and other properties in sensitive areas but the state should shoulder part of the financial responsibility on behalf of the community.

 

Existing tenants are to be recognised. The surviving spouse (except where legal or de facto separation is the case) will have the right of substitution. The recognition of the surviving spouse brings to the fore one of the deficiencies of the proposed reform. It only recognises the traditional family unit. It does not recognise the civil rights of cohabiting couples, both heterosexual and same sex couples. These are emerging partnerships which cannot be ignored. Tenancy rights of civil partnerships should be recognised and applied in this reform.

 

Beneficiaries of a lease (ie those that can inherit a lease) from a sitting tenant or his/her spouse are children (natural, adopted or foster) and ascendants who are older than 60 years. Beneficiaries who must have lived for at least five years with the tenant must satisfy  their eligibility criteria as on the 1^st June 2008. This is an improvement on the most contentious of issues related to rent. It narrows down the numbers of those that can inherit a lease by being specific. The numbers cannot increase as only those who qualify as on the 1^st June 2008 are eligible.

 

Although many would have preferred the complete elimination of inherited leases, AD believes that the proposed solution is an acceptable compromise. It is also fair and reasonable that the right to inherit a lease is a one time right.

 

Occupants who do not qualify for an inherited tenancy are treated humanely by the proposed reform : they are permitted a transition period of five years. Their 5 year tenancy will be temporary subject to the payment of the full market rent and governed by post 1995 legislation. Subject to agreement with the landlord they can extend their stay. Some will require Housing Authority assistance in the payment of rent.

 

Offspring of deceased tenants and ascendants who are entitled to inherit a lease will only be able to do so if they do not surpass the established means threshold : an economic worth of €125,000 or an income higher than €25,000.  This is a realistic measure of social responsibility. As a transitory provision they would be entitled to a temporary lease of  a 3 year duration on the basis of paying a rental value calculated at 3% of the value of the property. This is fair and I would say that it eliminates a sizable chunk of potential cases of lease inheritance.

 

Tenants in long-term residential care would be entitled to transfer their tenancy to an eligible beneficiary. If this option is not exercised within six months the title reverts back to the owner. This is a fair proposal. In addition it deals with an area which has been abused for ages.

 

Exceptional circumstances will undoubtedly arise which are not catered for in the White Paper proposals. A line is drawn, there will be no exceptions. The state will shoulder the responsibility for all those cases which fall between two stools.  Some sense at last.

 

Minimum rent payable is established at €185. Though this level of rent may be considered as too low by most, it will effect negatively a number of tenants who are already on the edge of decent subsistence. Some which are on the poverty line may suffer hardship as a result of this increase which is astronomic when viewed from their economic perspective. The White Paper proposes mitigation measures to those whose means of income are the non-contributory Old Age Pension or social security. This is positive as effectively it is the means through which government is transferring back onto its shoulders the responsibility for assisting social cases.

 

Rental value adjustment for inflation will be carried out every 3 years. There is no established upper limit.

 

The landlord’s responsibility will be limited to the structure of the building, including the roof. All other maintenance and repairs will be borne by the tenant. This is as it should be ! When repair works are carried out by the landlord rent will be increased by 10% of the costs. The tenant may opt to carry out the works himself in which case he will not be entitled to any compensation on termination of the lease. This would ensure that the tenant takes due care of the property rented out to him. Tenants will be able to use existing and future Housing Authority schemes to finance  repairs. It is not clear whether landlords would be able to participate in such schemes, nor whether it would be possible for landlords to part finance the repairs through an application submitted by the tenant  to the appropriate authorities.

 

The White Paper proposes that contracts for commercial properties that include a clause which triggers contract termination by increasing abnormally the rent due at a particular date will remain in effect for a transition period of 20 years (called their “sunset”) unless they are brought to an end earlier by operation of the said clause. At that point the title will revert back to the owner.  AD feels that this transition period of 20 years to be excessive and considers that a 10 year transition would be more than reasonable.

 

Likewise the White Paper proposes a 12 year transition period for the rental value of commercial properties to be adjusted to full rental value. Different routes are proposed dependent on the economic worth of the tenants. AD considers that this transition period to be excessive and considers that it could be reduced to 6 years.

 

Legal entities listed on the Stock Exchange will have a shorter transition period in respect of their pre-1995 tenanted commercial property. Their bonanza will cease on the 1^st June 2009.  AD considers this to be discriminatory. Their should not be any distinction between tenants on the basis of Stock Exchange listing.

 

Sub-letting is henceforth prohibited unless there is agreement between landlord and tenant to this effect. And to close a major loop-hole the White Paper proposes that management agreements will be deemed to be sub-letting. Where sub-letting of a commercial tenancy has taken place prior to the 1^st June 2008 without having been agreed to by the landlord, the White Paper dishes out another very generous transition of  10 years.  AD considers that this is could be reduced to 5 years.

 

Government intends to involve itself in determining what is a fair market value.  For this purpose the White Paper recommends the introduction of an index to establish the market value level of rent for premises in particular localities and areas. AD considers that Government should not intervene in this manner. It should rather establish a fast track mechanism to settle disputes, of which initially there will be a number. The fair rent can be and in most cases will be established amicably between the parties.

 

All controls relative to summer residences and garages will be dismantled as from the 1^st January 2010.

 

When considering the above, AD is of the opinion that overall the White Paper is a positive exercise. If government takes serious note of all the alternative proposals that will be announced in the coming weeks the White Paper recommendations may be substantially. This is the spirit of AD’s criticism.

Riforma fil-Liġi tal-Kera : L-ewwel reazzjoni ta’ AD

 

 

Huwa ta’ sodisfazzjon għal AD li tant insistiet li din l-issue ma tistax titħalla barra mill-agenda tal-pajjiż li sa fl-aħħar wara ħafna tnikkir ingħata bidu għal proċess ta’ konsultazzjoni b’numru ta’ rakkomandazzjonijiet konkreti.

AD qed tistudja l-proposti fid-dettall u iktar tard fi ħsiebha tippreżenta bil-miktub ir-reazzjoni tagħha għall-proposti specifiċi li saru fil-White Paper. Ma l-ewwel daqqa t’għajn iżda nistgħu  ngħidu minnufih li ma jagħmilx sens li l-partiti politiċi jingħataw xi preferenza fuq ċittadini komuni. AD hi tal-fehma li l-partit politiċi m’għandhomx ikunu soġġetti għal kejl differenti. AD ma taqbilx li l-każini tal-partiti politiċi għandhom ikunu eżentati mir-riforma tal-liġi tal-kera. Kemm l-MLP kif ukoll il-PN diġa jieħdu mal-€250,000 fis-sena bejniethom bħala fondi għall-hekk imsejjħa kuntatti fl-UE. Nistiednu lill-partiti l-oħra jiddikjaraw minn issa  jekk jaqblux mal-preferenza li qed jipproponi l-Gvern f’liġi ġdida dwar il-kera.

Ir-riforma proposta tintrabat mal-familja tradizzjonali ta’ raġel u mara miżżewġa u tinjora forom ġodda li żviluppaw matul is-snin. Fil-waqt li l-White Paper tirrikonoxxi d-drittijiet konnessi mal-kiri ta’ propjeta ta’ koppji separati tinjora dawk ta’ koppji divorzjati, ta’ koppji li jgħixu flimkien mingħajr ma huma miżżewġa kif ukoll ta’ koppji ffurmati minn żewġ persuni ta’ l-istess sess. AD ma taqbilx ma dan u tinsisti li dawn il-koppji għandhom ikollhom l-istess drittijiet ċivili ta’  koppja li tifforma familja meqjusa tradizzjonali.

Il-perjodu ta’ 20 sena transizzjoni li l-White Paper tipproponi biex r-riforma tkun applikabbli għal propjetajiet kummerċjali hu perjodu twil wisq u għandu jiġi mnaqqas sostanzjalment.

Ir-riforma tal-liġi tal-kera trid tfittex li tindirizza tlett aspetti :

a) li tkun ġusta mas-sidien mingħajr ma toħloq inġustizzja mal-inkwilini, l-iżjed ma dawk l-iktar vulnerabbli fis-socjeta,

b) li toħloq il-klima neċessarja biex jibdew jintużaw it-53,000 propjeta vojta u

 

c) b’hekk ma jkunx hemm iktar ħtieġa tal-kwantita ta’ bini li għaddej bħalissa.