Taming the residential rental market

The proposals in the White Paper entitled Renting as a Housing Alternative is a breath of fresh air in the long overdue debate on the need to regulate the rental market for residential property.

As rightly pointed out in the White Paper, the Maltese community has developed an allergy to local rent regulation as, when it existed, it was generally too rigid. It oscillated from strict over-protection of the tenant to absolutely no controls.

For a very long time, we also ended up with temporary legislative provisions enacted during the war which were over-stretched too long after their useful life. In effect, this reluctance over the years to introduce proper landlord and tenant legislation effectively killed off the rental market for a long time and it is only as a result of this fact that Malta is a nation of home-owners: it would not have developed in this way, had the post-war governments got their priorities right.

The proposals put forward by the White Paper are generally a good step forward. If properly implemented, they will go a long way towards laying the foundations for a stable residential rental market based on adequate (and necessary) protection of both landlords and tenants. A serious debate is, however essential in order to avoid creating unnecessary difficulties.

The rental market is currently in a state of anarchy, where the only applicable rules that apply are those of the jungle – where might is right – because, so far, the state has abdicated its duties to protect the vulnerable from the excesses of the market. Subject to the three exceptions listed in the White Paper (temporary foreign workers, tertiary education students and temporary leases for persons repairing and/or upgrading their own homes) establishing the period of one year as the minimum length of a residential lease addresses the abuse currently resulting from short-term leases. Likewise, establishing as a duty of landlords to give a suitable notice period of their intention not to renew a lease is right and proper. It is in everybody’s interest that everyone is aware of their rights and duties, as this will lead to better planning on all sides and, consequently, to a more stable and civil relationship between landlords and tenants.

It was also about time that the deposit requested on the signing of lease agreements are properly regulated – both as to the actual need for a deposit, its quantum and the circumstances in which it would be reasonable for it not to be refunded. This is a subject about which countless stories of actual abuse on the part of both landlords and tenants abound and regulation of it will bring some sense into the subject.

It is also right that variations to the rent to be paid during the period of the lease are properly regulated,  thereby defining the limits of permissibility. Too strict a limitation, however, will lead to a preponderance of short-term lease agreements because the market prefers frequent rental revisions that enable the rent payable to be as close as possible to the full market value.

Registering lease agreements is a step forward. It will not only lead to a check to  ensure that agreements comply with the new legislation but will also have the potential to ensure that tax evasion associated with rent paid is history.

When considering the White Paper’s proposals, one should avoid introducing unnecessary exceptions as these will only serve to stultify the objective of the exercise: the development of a stable rental market for residential properties. In particular, the proposal in the White Paper to justify the premature determination of a lease agreement, when a landlord needs the property for his own use or in order to sell with vacant possession or else to redevelop it, is uncalled for. Given that the residential leases in question will most probably be short-term leases anyway (between one and five years) no harm will be done to anyone if the landlord patiently awaits until the end of the lease before taking back possession.

The current proposals, with the one exception referred to above, are an essential next step to help the residential rental market develop properly. On their own, however, they are insufficient because they must be supported by a Housing Authority that proactively addresses the needs of the vulnerable when facing the market, which is eager to fleece those who meekly submit themselves as they see no way of becoming homeowners!

 

published in The Malta Independent on Sunday – 22 October 2018

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Nimmansaw is-suq tal-kera

Il-ġimgħa l-oħra 17-il għaqda, prinċipalment attivi fil-qasam soċjali, ippubblikaw dokument importanti intitolat “A Proposal for Rent Regulation in Malta” dwar dak li għandu jsir biex is-suq tal-kera jkun immansat. Dan id-dokument jipproponi li s-suq tal-kera jkun regulat u dan f’kuntest fejn dak kollu li għandu x’jaqsam mal-propjetá f’Malta tħalla jimxi għal riħu għal ħafna snin. Bosta approfittaw ruħhom minn dan u stagħnew inġustament, xi drabi minn fuq il-miżerja ta’ ħaddieħor.

Wasal iż-żmien għal ftit sens ta’ ġustizzja fis-suq tal-kera. Dawk vulnerabbli, bla ebda dubju l-iktar li ntlaqtu mir-rebus li ilu jiżviluppa prinċipalment mill-2008, ilhom jistennew li l-kuxjenza soċjali tal-pajjiż tagħti ftit kaz tas-suq tal-kera.

Il-ħolqien ta’ xibka soċjali, anke fil-qasam tal-kera, huwa prinċipalment responsabbilitá tal-Gvern. Il-Gvern jagħmel dan mhux biss billi jipprovdi oqsma residenzjali affordabbli għal dawk l-iktar vulnerabbli imma fuq kollox billi jiffaċilita l-aċċess għal suq tal-kera mmansat, jiġifieri suq relattivament ħieles imma suq li fl-istess ħin jkun wieħed ġust. Suq immansat hu wieħed li jopera f’parametri ġusti stabiliti mill-liġi: suq raġjonevoli għas-sidien imma ġust ma kull xorta ta’ inkwilin.

Il-mudell propost mill-koalizzjoni ta’ 17-il għaqda huwa bbażat fuq numru ta’ konsiderazzjonijiet bażiċi: id-dritt fundamentali għal post fejn toqgħod, id-distinzjoni ċara bejn id-drittijiet u d-doveri ta’ sid il-kera u l-inkwilin li t-tnejn għandhom dritt għal serħan il-moħħ, li jkun iffaċilitat is-suq tal-kera għall-kirjiet fit-tul, id-dritt tas-sidien li jistabilixxu l-kera inizzjali u l-mod kif din tkun varjata imma dejjem fil-qafas tal-parametri regolatorji intiżi biex jistabilixxu qafas ġust, kif ukoll li jkun iffaċilitat id-dħul fis-suq tal-kera ta’ propjetá presentement vojta għal diversi raġunijiet.

Id-dokument hu qasir ħafna, kull ma fih hu 12-il paġna. Imma hu mimli bi proposti li huma kemm validi kif ukoll li jħarsu fit-tul.

Hu pożittiv li s-Segretarju Parlamentari għad-Djar Roderick Galdes, li presentment qed jagħti l-aħħar irtokki għall- White Paper dwar is-suq tal-kera, meta kien qiegħed jiltaqa’ ma rapprezentanti ta’ dawn is-sbatax-il għaqda indika li, b’mod ġenerali, hu kien f’sintonija mal-għaqdiet fil-ħsieb tagħhom li jinbena mill-ġdid suq tal-kera li jkun jista’ jopera f’limiti ġusti u raġjonevoli.

Roderick Galdes, professjonist dwar l-ippjanar tal-użu tal-art, qiegħed f’posizzjoni unika bħala riżultat tal-esperjenzi inter-dixxiplinari tiegħu, li jassigura li l-politika dwar id-djar tidħol gradwalment fis-seklu wieħed u għoxrin wara li għal madwar tmenin sena kienet miżmuma milli tiżviluppa. Id-dikjarazzjoni tiegħu hi sors ta’ tama għal bosta li wara kollox hu possibli li suq tal-kera immansat jista’ jipprovdi kera ġusta.

Il-proposta fil-qalba tad-dokument tas-sbatax-il għaqda hi dwar il-ħtieġa li l-kirjiet ikunu kollha regolati minn ftehim li jsir bil-miktub. Dan il-ħsieb hu motivat mill-ħtieġa li d-drittijiet u l-obbligi kollha jkunu mfissra b’mod ċar u b’hekk jassigura l-kontroll tal-abbużi kontinwi, kemm mis-sidien kif ukoll mill-inkwilini. Fit-tfassil tal-proposti tagħhom il-koalizzjoni tal-għaqdiet għarblet l-esperjenzi ta’ diversi pajjiżi Ewropej, fejn (ġeneralment) jeżisti suq tal-kera b’saħħtu li hu ukoll wieħed ġust.

Alternattiva Demokratika ilha s-snin tħeġġeg dwar il-ħtieġa ta’ suq tal-kera b’saħħtu għax dan hu kemm ħtieġa soċjali kif ukoll ħtieġa ambjentali. Il-ħtieġijiet soċjali jkunu ndirizzati meta naqbdu t-triq li trid twassalna biex nassiguraw li d-dritt bażiku għal residenza diċenti jkun imnaqqax fil-liġijiet tagħna, kif ukoll applikata fil-prattika. Imma dan iwassal ukoll għal tnaqqis tal-impatti ambjentali tal-industrija tal-kostruzzjoni billi kemm-il darba jkun possibli li l-kera tkun waħda ġusta tonqos konsiderevolment il-pressjoni biex tkun żviluppata iktar art verġni, kif ukoll il-pressjoni fuq iż-żona ta’ konservazzjoni urbana u l-bini protett.

Alternattiva Demokratika taqbel b’mod ġenerali mal-proposta tal-għaqdiet. Sadanittant nistennew il-pubblikazzjoni tal-White Paper dwar ir-riforma tas-suq tal-kera u bla ebda dubju ser nieħdu sehem fid-dibattitu nazzjonali dwar is-suġġett. Għax wasal iż-żmien li s-suq tal-kera jkun immansat.

 

Ippubblikat fuq Illum : 4 ta’ Marzu 2018

 

Taming the Rental Market

The policy document entitled “A Proposal for Rent Regulation in Malta” published last week, has been endorsed by 17 NGOs that are mostly involved in the field of social action.

It is a proposal for rent regulation in a situation where everything concerned with property in Malta is spiralling out of control and has been in this state for a number of years. In the process, many have made lots of hay while the sun shone, frequently at the expense of vulnerable people.

It is about time that a sense of justice is restored in the rental market, and the sooner the better. The vulnerable – undoubtedly the hardest hit in the post 2008 free-for-all – have been patiently waiting for the country to listen to its social conscience regarding the rental market.

The creation of a social safety-net, even in rental matters, is primarily government’s responsibility. The government fulfils this not only through the direct provision of affordable housing to the most vulnerable, but also by facilitating access to a tamed rental market to the rest – a market which ought to be relatively free but fair at all times. A tamed market operates within reasonable and just limits: reasonable for landlords but also for a wide range of tenants.

The model proposed by the 17 NGO coalition is founded on a number of basic considerations: the fundamental right to a home, a clear demarcation of the rights and duties of landlords and tenants – both of which have the right to peace of mind, enhancing the long-let rental market, recognising the landlord’s right to establish the initial rent and its variation within a fair regulatory framework and incentivising entry into the rental market of property that is currently vacant for a variety of reasons.

The document is short and very brief, being just 12 pages long, yet it is brimming with far-reaching proposals.

It is encouraging that, when meeting representatives of the 17 NGOs, Parliamentary Secretary for Housing, Roderick Galdes – who is currently applying the finishing touches to a long-awaited White Paper on the Rental Market – indicated that he was generally on the same wavelength in seeking to reconstruct a rental market which operates within acceptable and socially fair limits.

Thanks to his inter-disciplinary experiences Galdes, a land-use planner by profession, is in a unique position to ensure that housing policy moves gradually into the 21st century after having been restrained for the past 80 years or so. His declaration is a source of hope to many that affordable housing can co-exist with a tamed rental market.

The central proposal of the NGO’s document is the need to ensure that all leases are drawn up in writing. This proposal is motivated by the need to clearly spell out rights and duties of both landlords and tenants, thereby ensuring that any abuse (by either) is, if possible, nipped in the bud. In their proposals, the coalition of NGOs drew on the experience of a multitude of other European countries where a healthy and (generally) fair rental market has been in existence for years.

For years, the Greens in Malta have been advocating the need of a healthy rental market, as this is both a social and an environmental necessity. Addressing the social necessity will ensure that we embark on the road which will lead to ensuring that the basic human right to having a decent home is entrenched in our laws and, hopefully, meticulously applied. This will also lead to a reduced environmental impact of the part of the construction industry, as the adequate development of a fair rental market will eventually decrease development pressures on virgin land as well as on urban conservation areas and protected buildings.

Alternattiva Demokratika – The Green Party is generally in agreement with the NGO Coalition’s proposal. We look forward to the publication of the White Paper on the reform of the rental market and will definitely be actively participating in the ensuing national debate.

Taming the rental market is a long overdue objective that should be relentlessly pursued.

published in The Malta Independent on Sunday – 4th March 2018

A financial surplus, yet an environmental deficit

As was expected, last Monday’s budget speech solemnly announced a budget surplus for the first time in many years. However, the environmental deficit was, as usual, hidden between the lines.

The budget is aptly titled Preparing for the Future (Inlestu għall-Futur). In dealing with environmental issues, the budget speech does not lay down clearly the path the government will be following. At times, it postpones matters – proposing studies and consultations on subjects that have been in the public domain for ages.

On the subject of vacant properties, the government prefers the carrot to the stick. In order to get dilapidated and empty properties in village centres back on the rental market, it is offering a €25,000 grant to renovate such properties, but then rightly insists that, once renovated these should be made available for social housing for a minimum of 10 years. In previous budgets, various other fiscal incentives have been offered to encourage such properties being placed back on the market.

After offering so many carrots, it would also make sense to use the stick by way of taxing vacant properties in situations where the owner is continuously ignoring the signals sent regarding the social, economic and environmental impacts of empty properties.

The budget speech announced improvements to rental subsidies. However, it then opted to postpone the regulation of the rental market. It announced a White Paper on the subject which, when published, will propose ways of regulating the market without in any way regulating the subject of rents. In view of the currently abnormal situation of sky-high rents, this is sheer madness.

It is fine to ensure that the duties and responsibilities of landlords and tenants are clearly spelt out. Does anyone argue with that in 2017? It should have been done years ago. Instead of a White Paper a Legal Notice defining clear-cut duties and responsibilities would suffice: there is no need to wait.

It is, however, too much to bear when a “social democrat” Finance Minister declares  that he will not even consider rent control. There are ways and means of ensuring that the market acts fairly. Other countries have done it and are still doing it, as rental greed has no preferred nationality. Ignoring this possibility is not a good omen. The market should not be glorified by the Finance Minister; it should be tamed rather than further encouraged to keep running wild with the resulting social havoc it has created.

This brings us to transport and roads. The Finance Minister sends a clear message when he stated (on page 44 of the budget speech) that no one should be under the illusion that upgrading the road infrastructure will, on its own, resolve the traffic (congestion) problem. Edward Scicluna hints on the following page of his speech that he is not too happy with the current situation. He laments that the more developed countries encourage active mobility through walking, cycling and the use of motorbikes, as well as various means of public transport, simultaneously discouraging the use of the private car. However, he does not then proceed to the logical conclusion of his statement: scrapping large-scale road infrastructural projects such as the proposed Marsa flyover or the proposed tunnels below the Santa Luċija roundabout announced recently by Minister Ian Borg.

These projects, like the Kappara flyover currently in its final stages, will only serve to increase the capacity of our roads. And this means only one thing: more cars on our roads. It is certified madness.

While the Government’s policy of increasing the capacity of existing roads through the construction of flyovers and tunnels will address congestion in the short term, it will lead to increased traffic on our roads. This moves the problem to the future, when it will be worse and more difficult to tackle. The government is acting like an overweight individual who ‘solves’ the problem of his expanding wasteline by changing his wardrobe instead of going on a painful but necessary diet.

This cancels out the positive impact of other policies announced in the budget speech such as free public transport to young people aged between 16 and 20, free (collective) transport to all schools, incentives for car-pooling, grants encouraging the purchase of bicycles, pedelec bicycles and scooters, reduction in the VAT charged when hiring bicycles as well as the introduction of bicycle lanes, as well as encouraging the purchase of electric or hybrid vehicles.

All this contributes to the current environmental deficit. And I have not even mentioned issues of land use planning once.

Published in The Malta Independent on Sunday – 15 October 2017

The rental markets

The liberalisation of the rental market over the years has not served its objective. Those who own property are still reluctant to rent out to Maltese tenants and the rental market is, albeit slowly, developing in such a manner as to mostly serve non-Maltese residents and ignore the locals.

I have no quarrel with non-Maltese residents renting residential property in whatever form or shape. The problem is, however, that as a result the high rents demanded have squeezed out of the market the small numbers of Maltese residents who, not having the means to purchase, must perforce rent out.

The rental market was dormant for over 60 years and was resurrected primarily as a result of the 2008 overhaul of rent legislation. It was a process that started with earlier amendments to the law in 1995. Unfortunately, there was no real preparation for the impact of its resurrection in the residential sector.  The end result was that the residential rental market is functioning in a warped manner, catering for the high (foreign) earners and ignoring those at the lower end of the scale: the low wage earner who lives from hand to mouth.

Malta and Gozo are being incessantly raped to produce more residential units, primarily for renting out to non-Maltese employees in the financial services and betting sectors that are mushrooming to benefit from favourable taxation rates. Yet the properties that can be rented out to the locals are being left vacant, as can be ascertained by an examination of the information published as a result of the last census.

Subsidies dished out by the Housing Authority may be of some help in reducing the resulting social pain. However, what is required is a radical overhaul that would place all vacant properties on the market. Ideally, this should be done through fiscal incentives that would encourage owners to shoulder their social obligations. A number of incentives have been or will be rolled out to encourage the rehabilitation of dilapidated property. The carrot will certainly function in a number of instances and a number of vacant properties will, as a result, return to the marketplace.

However, after the carrot has carried out its duty, it should be the turn of the stick. Properties vacant for a long time, say for more than 5 years (or some other reasonable length of time), should be taxed until they are put back to use. In such a small country we cannot afford to waste any of our scarce resources. Ensuring that this waste is avoided is everybody’s business.

published in The Malta Independent on Sunday : 22 January 2017

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.