Government promoting use of empty residences

Parliamentary Secretary Joseph Cassar said the government intended to promote the use of empty residences and, while arriving at sustainable development, ensure that new development was under control.

Speaking during the debate in second reading of the Bill reforming the rent laws, Dr Cassar said issues dealing with the type of accommodation, pricing and social matters had to be addressed. The solution was to stimulate the social accommodation market while ensuring fair rents and social justice.

Dr Cassar spoke of the guiding principles adopted, through which the government was doing its utmost to bring the rights and obligations of owners and leaseholders on the same level. The reforms had to be manageable and implemented gradually so as to reduce any negative social impact.

It was very important to ensure a rental market which functioned properly to act as a means of adequate and affordable housing to those who could not buy their own property.

He said that agreement between the government and the opposition was important for the reform to succeed. He gave various examples of changes made to the Bill following consultations. These included a decrease in the withholding tax from 15 to three per cent when leased property was bought by the leaseholder. Other changes dealt with the right of a leaseholder's children and siblings to remain as residents in the household in case of death, but having to submit themselves to a means test.

Mr Frederick Azzopardi (PN) said the Bill rested on a tripod: sustainability, justice and protection, and through it the government would provide a just and affordable alternative to the present rent laws.

Malta currently faced different challenges than what it had faced in the past, among them those of sustainable development and enhancement of the environment. But demographic changes entailed a different approach in how the country tackled these challenges.

Every individual should enjoy the right to adequate and tenable accommodation. But, he noted, there was a lack of trust on the part of developers regarding this reform.

Property owners had been feeling that from an economic asset their property had become a burden. Leaseholders, on the other hand, felt unsure as they realised that if they lost the lease they would not be able to afford good and feasible accommodation.

Mr Azzopardi said there was consensus on the issue of social accommodation: the state should intervene to ensure that those who did not have adequate resources could benefit from adequate housing through a number of schemes issued by the Housing Authority.

Referring to the White Paper and its 33 proposals, he said that this promised justice to the landowners, the government retained the social aspect and leaseholders in need of social help still enjoyed their rights.

Through the rent reform, the government aimed to place on the market empty property to satisfy the demand.

Mr Azzopardi said that it was not fair that leaseholders who could pay adequate rents abused property owners. If one had the means to afford a just rent, one should not occupy property because the parents had the original title to the house or apartment.

Concluding, he said that in the interests of present and future generations the country should step ahead to ensure good and adequate accommodation for every individual.

Jean Pierre Farrugia (PN) said that back in 1995, the then Nationalist administration had decided to liberalise rents but still had the problem of seeing what would happen with pre-existing rental agreements. It had wisely allowed time to pass before taking its next steps. Now that pre-1995 agreements were also to be liberalised, this would in no way affect post-1995 agreements.

Going through the Bill's clauses, Dr Farrugia said the White Paper had laid down that the new arrangements would come into effect on July 1, 2008, precluding any private individual attempts at "putting things into place" before the law became effective.

The Bill went out of its way to keep a just equilibrium between different kinds of rental agreements. If the Nationalist government had not had the courage to do what it had done in 1995 it would not have been possible for it to be tackling pre-1995 agreements today. It was a feather in the Nationalist cap that from the 25,217 requisitioned properties in 1995 the number had now been reduced to just 1,759.

The government must step up its efforts to help families that would be unable to rent accommodation at the new rates.

Another problem was that of Gozitan workers who had property in Gozo but needed accommodation in Malta because they worked on the main island. Others lived with the leaseholder but had no title over the property.

There were families who had been allocated their apartment homes at unchangeable rents before 1987, living in the same blocks with other families whose rent changed with every appreciable change in the income of the head of family.

Concluding, Dr Farrugia said the government deserved praise for what it was doing to update the overall picture in the accommodation rental market.

Franco Debono (PN) said that the government's decision on rent reform was courageous while the opposition was showing maturity in agreeing with the Bill in principle.

The Bill aimed to safeguard the interests of property owners while showing solidarity with those who could not meet their obligations under a liberalised rent system. The state should intervene to satisfy these social obligations. The state had met these obligations through a number of schemes.

Dr Debono said that change should be achieved without creating injustices and hardship. The Bill established that as from January 1, renting of residential and commercial accommodation in urban areas had to be subject to a written contract.

Stephen Spiteri (PN) said that there existed consensus on rent reform not only in the House but also among the general public.

The Bill introduced a new legal framework for the sector to be further liberalised. The proposed reform sought to strike a balance between owners and leaseholders while reflecting today's realities.

The reform established the payment of €185 as a minimum annual rent, which could cause hardship among certain leaseholders. He called on the government to protect bone fide leaseholders to meet these obligations.

Another change which would be brought about through the reform was a larger pool of residences available for rent. There was a real problem with vacant and abandoned residences. He called for an extensive survey of such residences.

A section of the population with low income, who could not afford to buy their own property, could now be guaranteed the possibility of renting an adequate residence with owners receiving their due. It was the government's intention to introduce this reform gradually, with enough time given to everyone to adjust to the new situation.