GRTU calls for experts' group to study case of commercial properties

The Chamber of Small and Medium Enterprises - GRTU is calling for the postponement of the commercial aspect of the rent reform proposal and for a commission of experts to be set up to study the matter and consult the players in order to come up with viable solutions in about a year's time.

GRTU director general Vince Farrugia said yesterday that the aim of the reform should not be just to change rent laws but also to safeguard enterprise without harming property owners.

The GRTU was proposing the separation of residences and commercial properties for the purposes of the rent reform with the reform on commercial properties being postponed for an in-depth study of the situation to take place.

Mr Farrugia said that the "expert" commission being suggested should include architects and lawyers as well as GRTU nominees representing enterprise tenants of rented commercial properties.

The commission should make proposals to safeguard the security of tenure of licensed owner-managed enterprises, ensure sustainable returns to property owners and the necessary fiscal incentives to encourage the evolvement of the property rental market.

It would recommend how property owners' rights and the rights of security of tenure of enterprises operating from rented properties could co-exist to the benefit of enterprise and economic growth.

The GRTU proposed that the government should continue to consider privately-owned properties as distinct from government-owned properties and the two sectors should be treated as separate.

Mr Farrugia said that any reform should not interfere with any contractual obligation reached between two parties or where the possibility of a contractual agreement existed even if none of the parties preferred to make use of it and where no law prohibited action that contracting parties could freely adopt. The GRTU contended that in the same way that employees and wage earners were provided with legal protection against unfair dismissal, self-employed businessmen whose livelihood, that of their families and of their employees depended on the enterprise operating from rented properties should continue to enjoy the safeguards ensuring that their livelihood would not depend on the whims of the property owner renting the enterprise property.

Mr Farrugia said that the underlying principle of the reform should not be the rent laws but the safeguards of enterprises operating from rented properties.

The GRTU, he said, was proposing that enterprises operating from rented commercial premises should be given the opportunity to buy the property at commercial value with discounts set according to the number of years the business has been occupying the premises. The business would also be allowed recognition for the investments done in the property.

Another proposal was for the recognition of the principle of succession of businesses in rented properties for the enterprise to continue to survive.

Mr Farrugia pointed out that a number of small family businesses ran their business from the same premises as their residence. The reform should recognise these particular situations and provide the necessary safeguards for these entrepreneurs not to lose their residence and means of livelihood.

The reform should also extend security of tenure for tenants who progressed from one genre of business to another utilising the same rental property. This safeguard should by subject to a framework of acceptable and prescribed forms of compensation to property owners.

The reform should do away with the current distinction between pre- and post-1995 rental situations.

The agreed package of safeguards for enterprises operating from rented properties should, unless contractually agreed differently, be equal, irrespective of when the rental arrangements were made, Mr Farrugia said.