Retailers risk eviction come 2018 - GRTU
Retail union wants clear commitment from parties to remove "guillotine" clause
Vince Farrugia speaking at the GRTU press conference.
Both major political parties must give a clear commitment to amend existing rent laws to remove a “guillotine” clause that would see many retailers with rental contracts pre-dating 1995 automatically evicted come 2018, the Chamber of Small and Medium Enterprises – GRTU – said this afternoon.
The GRTU also wants a rent revision index mentioned in the 2009 rent law reform but not yet part of the law to be enacted, saying that the index would allow both tenants and property owners a fair deal.
Rent law reforms introduced in 2009 included a stipulation that rental contracts on commercial properties dating up to June 1995 and which tenants can automatically renew will be nullified come June 2028.
For sub-leased properties, in which tenants pay rent to someone other than the property owner, that deadline is 10 years earlier – June 2018.
“This guillotine measure is turning many businesses into melting blocks of ice,” said GRTU director-general Vince Farrugia. “We expect both parties to clearly commit to rectifying this situation, and we expect them to make a commitment before the general election.”
The retailers’ union wants a new government to create a commercial rent committee tasked with assessing the impact rent increases would have on retailers’ outlets and to oversee the introduction of a property market value index.
The index is already mentioned in the 2009 rent law revision but is not yet law. Such an index would calculate rent increases through a mathematically-calculated formula and would, GRTU lawyer Jan-Karl Farrugia said, be a fair remedy to both commercial tenants and property owners.
In the absence of a property market value index, rent on such commercial properties with pre-1995 rental contracts will also start rising by an annual five per cent of the original rental sum from January 1 of next year.
“We’re not arguing that decades-old rents, which are sometimes ridiculously low, should remain unhanged,” Dr Farrugia said. “But to have a clause to automatically evict commercial tenants come 2018 or 2028 is draconian and unfair.”
Dr Farrugia argued that retailers often were a key contributor to the heightened property value of commercial properties.
“Many retailers have invested a great deal of money into these properties over the year. If these properties are worth much more now, it is also down to this.”
Mr Farrugia suggested political inaction on the matter was down to conflicts of interests. “Parliamentarians on either side have only taken notice of property owners’ rights. They paid absolutely no attention to commercial tenants’ voices. And that’s because many of them – lawyers, notaries, architects – have no interest in changing things.”
He turned to GRTU members. “Many retailers don’t even know about that they risk being thrown out onto the street in 2018. Wake up, your business is vanishing,” he exhorted.
18 Comments
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j brincat
Feb 27th, 14:34
AND where was GRTU in the last 5 years?
jb
j brincat
Feb 27th, 14:32
Rental laws are applicable to one and all, no?
So why should there be exceptions?
No problem with me once this is applied across the board (small fry included) and who have no voice or lawyers to defend them!
jb
Andrew Cutajar
Feb 27th, 11:05
I believe current commercial rental is nonsense - and the automatic evictions are meaningless as the value of commercial premises is not what it used to be. Many consumers use the shops just to 'feel the fabric' before online shopping, a loophole in the system, no one's fault, but a reality none the less. Revenue sharing contracts are more sensible and will preserve the high street long term.
Joe A. Borg
Feb 27th, 10:32
Mr Farrugia has got the face to call on parties for a commitment when he is stuck in the hole with a political party himself.
It seems that he has not realized yet that he has lost the trust of the GRTU members. ( at least mine!)
Matthew Saliba
Feb 27th, 10:09
Nothing is precluding the retailers from initiating discussions with the owners and entering into a new lease agreement. It is high time people stop expecting the Government to babysit them. If you want to be in business be a business person. Period!
An Cachia
Feb 27th, 08:16
If retailers pay a fair price on the rent they will not get evicted, simple. These people have had years of paying a couple of euros a year, sub letting , messing up, etc etc. the rights of the owners have never been considered. gRTU only speaks up because they stand to lose the most, and finally the owners have rights on their properties. What is draconian is the current situation dear GRTU.
john zammit
Feb 26th, 22:36
enough for six level`s, It turned out he made do that expence to just buid tree levels,
25 yeras ago i rented the flat for LM4,per day for 8 yeras certain,And every year for the next seven years the rent had to go up by 10 per cent evry year and stil it goes uo every 5 years, do you call that squating.
Its my only means of living and to keep feeding my children and all expences,is that justice,
Christian Calleja
Feb 27th, 00:34
Your lease has a termination year. If this termination year is pre-2028, you will get a BONUS amount of years until 2028 arrives. What are you expecting? To stay there forever. If you want to stay in a property forever, buy one and it will be yours.
john zammit
Feb 26th, 22:29
Mr Chritian Calleja.
please note i have been a lessie for 25 yeras now, and still in my rented restaurant, whe i rented the restaurant it was a flat so i done it up from a flat into a restaurant, At the tune of Lm15,000 That is only
To open the walls and support the overlying flats which the restaurant was Flat No 2, And the landlord told me i have to support the overlying flats to make it strong
Christian Calleja
Feb 27th, 00:33
Mr. Zammit, can I ask you the length of your lease?
Does it have a stipulated time frame? Are you saying that you should stay longer than your stipulated lease length because you made considerable investment in a property which is not yours?
Christian Calleja
Feb 26th, 20:35
Is Mr. Vince Farrugia joking or what? Is a 20-year time period a guillotine measure?? Retailers have PLENTY of time to find an alternative premises if they think their lease will not be extended by the owner. What Mr. Farrugia is asking for is to allow business owners to squat a property.
john zammit
Feb 27th, 10:24
Mr chritian Calleja
My lease is automatically renewed,But every 5 Years it goes up in rent, By the price index or minimum wage which is the higher,
Yes I signed the agreement on that terms me and the landlord has that agreement and he was happy to let out the restaurant to me, I even had to leave a deposit of Lm244,00 for the last 25 years, he did not Want A bank guarantee so he can take interest ,
john zammit
Feb 26th, 17:50
You rae 100Per Cent Right Mr Farrugia.
for the government Outlets They are issuing a forty five years lease, As they said and rightly so the Outlets that are let from the gov, Owners cant even get a bank loan , and this was confirmed by the banks to the minister, Dr jason Azzopardi,
But our livelihood outlets and our families' are not important we will live on air Onc the five years lapse or 2028.
Francis Saliba M.D.
Feb 26th, 17:36
Would this defender of shopkeepers please justify the fraudulent robbing of the real owners by people who run the shops for their own profit as if they legally owned/rented them when they don't? They are only squatters who have illegally appropriated the shops by claiming fraudulently that they are only managing them. The "guillotine clause" to which the GRTU objects is a long overdue justice.
John Attard
Feb 26th, 18:27
you must be joking! I assume you're one of those who many years ago rented at a very good price and now want the property back to be used by your sons or daughters after someone else has provided the red carpet treatment!
Francis Saliba M.D.
Feb 27th, 01:35
@JohnAttard
No I am very serious. I am the owner of a shop that was rented to one person on the clear understanding that it would not be sublet but who abusively passed it on to another clandestinely who runs it and keeps the earnings for himself whilst pretending falsely that he was only managing when VAT registration, telephones etc clearly prove that this is a lie.
Lawrence Fenech
Feb 26th, 17:22
L'eviction imissha bdiet mill officini tal-GRTU.
A.Felix Busuttil
Feb 26th, 17:18
we are already seeing the business vanishing year after year. Is it a coincidence the The director and lawyer have same surname,or ta gewwa?
Please choose the reason of your report below: