Chamber of Commerce wants end to 'biggest social injustice'

Properties used as clubs by political parties, bands and similar organisations should not be exempt from rent reform, the Chamber of Commerce and Enterprise argues in a position paper.

The chamber welcomed the White Paper on rent reform as the first step towards eradicating the "biggest social injustice" Malta faces today, created during a state of emergency nearly 100 years ago.

"Our proposals are based on sound principles and we don't want to see anybody thrown out on the streets. However, we want the injustices to end," said Reginald Fava, chairman of the Chamber's Rent Laws Committee.

Chamber president Tancred Tabone said the committee was set up some time ago, since the chamber had long been lobbying for reform.

Over the years, various legislators created an abusive and parasitical situation to the detriment of property owners, the chamber feels.

"We congratulate the government, especially Social Policy Minister John Dalli for the political courage to bite this bullet. We realise there could be a political price to pay for this courageous reform, but nonetheless, it is badly needed," Mr Tabone said.

The chamber has discussed the position paper with its membership and it was eventually approved by the council at its last meeting.

The Chamber has also met Opposition Leader Charles Mangion as it believes the Labour Party also needs the courage to ensure political consensus and the eventual entrenchment of the principles underlying this reform in the Constitution.

"We are adamant that any attempts to reform will be futile unless political agreement is struck on the issue," Mr Tabone said.

The position paper, which presents recommendations to fine-tune and improve on the White Paper, proposes to reduce the 20-year sunset clause for commercial leases to 12 years, unless otherwise agreed by the parties, to secure a level playing field.

The Chamber also believes there should be fiscal incentives and tax waivers, which would encourage both owner and tenant to reach an agreement.

It stresses that the burden of social housing is the state's responsibility and not that of the private citizen, so requisition orders should be revoked immediately.

The Chamber also feels that any legislative interference on pre-1995 agreements freely entered into by both parties would constitute forced market intervention.

Instead of introducing a uniform flat rate of €185 a year, this should be a minimum rate, and rents should be adjusted by the inflation rate, applicable at the year of the commencement of the rental period, to date.

The beneficiary qualification parameters are deemed too generous and should be €100,000 in the case of asset value owned by tenants; or an annual income of €20,000 or higher - almost three times as much as the minimum wage for this year.

Regarding the provisions of the Housing Decontrol Act (as amended in 1979 and 2007), the Chamber reiterates that the one-time right to inherit should not apply in tenancies created as a result of these amendments, where terminated emphytheutical concessions were converted to a lease.

The Chamber's position has been endorsed by the Federation of Industry, the Malta Hotels and Restaurants Association and the Federation of Estate Agents.

The full position paper is available on www.chamber.org.mt.