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On July 3, 2024, the Civil Court (First Chamber), chaired by Justice Lawrence Mintoff, rendered an important ruling in the case of Galdes et v. State Advocate et under its constitutional jurisdiction, dismissing the owner’s claim challenging the rental arrangement of his property on the grounds that it was a disproportionate interference with his property rights.
The property in question was originally granted a temporary perpetual concession by the plaintiff’s elders in 1975 and subsequently renewed in 1992. However, the current tenant is the daughter of the original perpetual tenant, who has occupied the property for approximately 30 years and until recently paid a rent of €279.72 per year. This rent had been reviewed and increased to €2,500 per year pursuant to a ruling by the Rent Regulation Board in another case between the landlord and tenant.
The plaintiffs argued that the fixed rent they had received until recently did not reflect the market value of the property over the years and sought compensation and damages, alleging that the operation of the law constituted a disproportionate interference with their property rights under Article 1 of Protocol 1 to the European Convention on Human Rights. They argued that compulsory tenancy and the legal framework governing it were unfair and deprived them of their enjoyment of their property.
Among other important defenses, the state defense counsel countered the plaintiffs’ claims by stating that the two plaintiffs were unfit plaintiffs. The reasoning was that the two plaintiffs lived abroad and were not represented as required by the procedure. The court noted that copies of their passports were produced during the case, indicating that the two plaintiffs lived abroad. More importantly, although one of the plaintiffs testified that she had a power of attorney to represent the said claimants, the court noted that no power of attorney was produced during the case. Therefore, the court ruled that the two claimants were unfit plaintiffs.
However, the most important issue involved in that case was the applicability of the old rent law regime and its applicability in the present case.
The state counsel maintained that the applicant had to prove that the current tenants were living in the property under a provision of the Housing Deregulation Regulations. The state counsel stated that upon the expiration of the first contract in 1975, the applicant’s elders granted the property to the tenant’s father with a temporary perpetual tenancy for a period of 17 years, and in May 1992 another contract was signed with the original perpetual tenancy holder, which again granted the property to him with a temporary perpetual tenancy for a period of 17 years. The state counsel maintained that it was therefore this last contract that was valid, but that according to section 12(2) of the Housing Deregulation Regulations, since the latter perpetual tenancy concession was granted after 21 June 1979, only the original perpetual tenancy holder had the right to continue to occupy the property and rent it out to the direct owner. Therefore, the defendant state counsel maintained that the court proceedings could not succeed because the plaintiff had no obligation to extend the lease after its expiration in 2009.
The Court accepted this argument and ruled that the law allows a perpetual tenant under a temporary concession to convert that concession into a leasehold, but the protection provided by the law does not apply where the perpetual tenant at the time of the expiration of the grant of the perpetual concession is not the original perpetual tenant. Therefore, the plaintiff is not obliged to accept that the current tenant (the daughter of the original perpetual tenant) continues to reside in the premises under a leasehold after the expiration of the perpetual concession. Therefore, the tenant today benefits from a leasehold arising from a bilateral agreement with the applicant and the law does not provide for a relationship between the parties as landlord and tenant. The Court also noted that the present lease came into effect after the amendment by Act XXXI of 1995 and therefore the landlord cannot complain of any restrictions on the terms of the lease under the law applicable before 1 June 1995.
Based on this, the court announced the dismissal of the applicant’s lawsuit.
The above case may be appealed.
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