Issue link: https://maltatoday.uberflip.com/i/989894
7 NEWS maltatoday | SUNDAY • 3 JUNE 2018 MASSIMO COSTA A government proposal to have landlords receive an an- nual rent of 2% of the value of their rent-controlled proper- ties, has met cautious approval from property owners. The proposed legal amend- ments would allow owners of rent-controlled properties the right to ask the Rent Regula- tion Board to revise measly rents upwards, to a maximum of 2% of the freehold value of the property. Tenants of such rent-con- trolled properties have enjoyed low rents thanks to the protec- tion afforded by a 1979 law that converted temporary leases in permanent rental contracts. But lawyer Cedric Mifsud – who won a landmark Consti- tutional case related to land- lords' fundamental right to enjoy their property – said the changes come late in the day and were not a not a full solu- tion for landlords who remain limited in how they impose rent on their properties. Mifsud said it had been ir- responsible of the current and previous administrations to have taken so long to come up with a solution. "The 2% rate is definitely an improvement, but it's still below the usual market rate," Mifsud said. "There are, for instance, properties in Mdina which would normally get a 5% in- crease on the open market, but would have to be limited to less than half of that if they are rent-controlled. "So, government is still causing a restriction, and the breach of the right to enjoy- ment of a person's property persists. This creates a distor- tion in competition between those who are restricted by the law which converted tempo- rary emphyteusis deeds into a lease on their expiration, and those who aren't and can rent out at a much higher rate." The easiest solution, Mifsud remarked, would be a cut-off date for the 1979 law to be repealed, including a gradual phasing-out period of five to ten years. Biggest issue is who establishes freehold value Property market author- ity Christopher Testaferrata Moroni Viani said he was concerned about who would be charged with carrying out the valuation of the rent-con- trolled properties, and whether it would be based on the actual value of the property on the open market. "Let's say you have a property worth €300,000, but because there is a tenant renting the property who can't be made to vacate, the property is val- ued at €50,000. On which fig- ure will the 2% be applied?" he asked. "Or what if there is a property the government had expropriated, which it claims is valued at €70,000, but can be sold for €700,000 on the open market? The owner might go to court, where the value is raised to, say, €100,000, but this still won't be fair. So who establishes the value of the property?" Testaferrata said the 2% 'cou- pon' was better than nothing at this stage for landlords, but it all depended on valuation- related factors. While acknowledging the im- portance of helping families who need property assistance, he said this should be done through a proper means test and government subsidies, not through the 1979 law. Amendment only an interim solution Douglas Salt, head of the Malta Developers' Associa- tion's real estate section and a director at Frank Salt Real Es- tate, called the amendments an "interim solution" and a "step in the right direction", but said they are far from giving land- lords a level-playing field. He said the 2% rate was low but acceptable as long as it was a temporary solution. "Rent control has been there for a long time, with people riding on landlords' backs. A number of court cases at local and European level have found the 1979 law to be unjust, and the compensation given has been on the low side. The gov- ernment has had to come up with a solution – which is still not really fair at this point." He described landlords of rent-controlled dwellings as effectively offering social hous- ing for free. "When the law was introduced decades ago, the government was justified in fearing people could end up without homes, since Malta was still recovering from the post-war period." While saying it was not right that such a situation persists, Salt admitted that repealing the 1979 law would cause cha- os on the housing market. "However, on the other hand, there are children of landlords who have to buy their own home instead of being able to live in one owned by their fam- ily. There's no easy solution," he said. Solution for rent-controlled housing 'only partial' Controlled rent rates can't last forever, revisions only partial solution, property pundits say JAMES DEBONO BOWSERS have extracted and sold a total of 552,000 cu- bic metres of groundwater – the equivalent of 276 million two-litre bottles of mineral water. This amounts to 25% of all groundwater extraction me- tered in 2017, and 85% of all water extracted from non-ag- ricultural commercial bore- holes. Borehole extraction from this source increased by more than 50,000 cubic metres be- tween 2016 and 2017. The statistics do not ac- count for water derived from unmetered agricultural bore- holes and unregistered ones. Groundwater extraction, although metered, is not charged. A total of 122 boreholes are registered with the Mal- ta Resources Authority for "commercial water supply services". 116 vehicles are au- thorised by Regulator for En- ergy and Water Services for water transportation. `Only 17 of these are authorised to supply potable water. Bowsers extract water with- out paying any charge, only to sell it at a profit to consumers who pay less for it than they would have paid for tap water. A government spokesperson also confirmed that regula- tions proposed in 2009 to in- crease monitoring of this ac- tivity through the installation of load cells in bowsers, have never been enacted. The installation of a load cell would have enabled the authorities to know where the bowers are being loaded with water, where the water is delivered, and the volumes involved. "The load cell system on wa- ter tankers was not installed way back in 2011 due to tech- nical reasons," the govern- ment spokesperson said. Bowser water is used mainly to fill the 3,896 swimming pools registered in Malta, which has over 12 swimming pools in every square kilome- tre of land. Bowsers extract over 550,000 cbm of water The proposed legal amendments would allow owners of rent-controlled properties the right to ask the Rent Regulation Board to revise measly rents upwards, to a maximum of 2% of the freehold value of the property