Rent laws: A change for the better at last

Tomorrow morning a public information meeting will be held at the Phoenicia as advertised in the newspapers. I expect that it will be very well attended: many people have been waiting for something like this for decades. At last they will be able to strike back at the infamous rent laws which have made their lives a misery.

Few of them will realise or care very much that they will be participating in a historic event. There has never been a citizens' initiative referendum in Malta before. The Referenda Act has never been put to use before by citizens. The four referenda held in recorded history were initiated by the government to deal with some political issue.

The rent laws are not a partisan political issue. They strike indiscriminately at all of us. It is just a matter of luck, bad luck. They have been around so long they have become part of our legal landscape, we have acclimatised to the horror; not even the major victims expect them to go away.

It is just a matter of belief, belief by very many that gains strength in numbers. It is not a reality. The only reason that these absurd laws continue to hang around is that the other two political parties have majoritarian ambitions. Unless they gain 50 per cent of the vote they are nowhere or better still in the limbo of opposition. They dare not raise the issue and lose the votes they expect to lose from whatever change they make to the rent laws. If any government makes a move the opposition is expected to take advantage exploiting the discontent. It is the most classic case of zero sum politics produced by our system.

It would take a metaphorical click of the fingers to do away with the inheritance of leases. How come no government has considered it? Why was it left out of the 1995 amendments? Why should the end of a long lease (emphyteusis) entitle tenants to take the premises on lease or even redeem the lease? A deal was made 20, 30 or 40 years earlier agreeing that the property would be surrendered; how can the legislator intervene and prefer one party to another? Why should the law protect those who transfer their identity card registration to their grandfather's rented house? Why are the owners second-class citizens? Simply because they happen to own the place?

Why do we have owners negotiating with tenants to give properties away gratis? In a country where property prices continue to climb vertically! How could rents be kept so low when the repair of a roof or of a balcony wipes away the rent received in decades?

The situation is simply indescribable to any foreigner. It is nothing short of ludicrous that any government allows it to persist another day. It is tragic that many people continue to believe that this insanity is inevitable.

There is absolutely no reason for all this fatalism. Holding a referendum is relatively easy. Winning it is not at all impossible. According to the 1995 census there are 17,000 rent controlled properties. In my experience most of them are owned by a plurality of owners. Delay and procrastination has spread the shares among generations. There will be far more than the 30,000 signatures needed to oblige the Electoral Commission to hold a referendum to wipe out all the iniquity of the mosaic of nonsense plastered onto the civil code regulation of the contract of rent.

Tomorrow will be the beginning of the end for the nonsense. It will be the beginning of the end for the rent laws as we know them. In phase I of the rent referendum campaign there will not be a great need for explanations. All we need are the signatures of the people who have a direct interest in wiping away the laws that hold them to ransom. At this point it is a matter of elbow grease and money to collect the signatures.

Once we have succeeded we can look at phase II which will be the referendum proper leading to a national vote. It need not happen at all if the government recognises that it needs to get off its hands before it is bowled over. If the government continues to duck the issue we will have to persuade the country.

At least 50 per cent must turn up and vote but there is little fear of an abstention campaign on this issue. Those who stand to lose cannot afford to absent themselves. Many more will have taken sides by the time we come to ballot boxes. I have no doubt we will convince the country it is time for reform and that the country will respond with the wisdom it has always shown.

From here to there we will be collecting data from dispossessed property owners. If we are provided with rent receipts showing the details we will be able to post them on our website showing the facts as they are: millionaires taking a ride on families who desperately need to gain possession of their major assets.

We will also be able to make clear what danger this situation poses to people who are not directly cursed with owning a controlled rent property. Most of us now own our own homes; Malta enjoys one of the highest rates of homeownership in Europe. We can sympathise with cheated property owners more than ever before. We will also be able to recognise that unless something definite is done soon so many people will be excluded from the property market that they will turn to the government for housing. And the government will have no choice: with no funds to provide homes for everyone it will have to turn onto the owners of vacant properties. It could be a mad return to the bad old days of requisitioning unless we do something about it.

Those of us, most of us who have their homes as their nest egg, their savings scheme and major capital investment, have every reason to guard it. Nobody wants property prices to come down. Nobody can rationally believe that they can be allowed to climb vertically forever without mishap. The upward pressure on the property market is phenomenal. If interest rates go up and a significant number of people can no longer afford the repayment of loans taken out at their personal limits there could be a stampede to the bottom. Who wants to be paying a loan for a property that will never fetch the price one is paying for it? It has happened before and it has happened elsewhere. Nobody can tell when but nobody can claim that Malta is an exception to economic laws.

It has been the absence of a rental market which has pushed property prices upwards for six decades in a row. Reforming the rent laws will not make property prices drop but can ease the pressure to prevent the bubble bursting with disastrous consequences. We will need time to make this clear. We have the time and we will be very persuasive.

We will also be able to answer the questions relating to post reform. What are we proposing to fill the vacuum? How will those deserving assistance fare? Older tenants? Poorer tenants? There will be time for all this and a number of possible fair solutions are available. The transition for fully controlled rents to a liberalised market will also have to be regulated. It will be done.

At this time we can only focus on the task at hand: gathering the 30,000 signatures we need to set off. This is no time to get into a twist over which system is best. At the end of the day neither the Greens nor those of all colours who will support the referendum have any say in making any law. We are only allowed to abrogate laws under the Referenda Act. Once we have one we will be glad to make our proposals for the post-referendum scenario. It is still very early to worry about it. What we have to do first is gain the right to have a choice. When we have done that we can debate on what the effects of the choice will be.

Tomorrow will be a great day. Whoever makes it to the Phoenicia meeting will be able to claim that he or she did not take it all lying down but was able to reach out for his or her rights at the first opportunity that presented itself. We can stop moaning and act together for a change for the better.

Dr Vassallo is chairman of Alternattiva Demokratika - The Green Party.

hcvassallo@kemmunet.net.mt