Upon the introduction of Act XXIII in June 1979 which amended the Housing (Decontrol) Ordinance, tenants enjoying a temporary emphyteutical concession were given the right to convert the emphyteutical concession into a lease – even if this were contracted prior to the law coming into force.

This was notwithstanding article 1521 of the Civil Code, which stipulates that upon termination of the period agreed, the property together with all improvements had to be returned to the owner.

Therefore the amendments force the owner of a property to enter into a lease which he did not agree to, by means of a law which applies retrospectively. In return the owner will receive a pittance in rent, which only increases every 15 years in accordance with the rate of inflation. Moreover, once this lease is not subject to a termination period, and can, in certain circumstances, be inherited, it is nearly impossible for the owners to regain possession of the premises unless the tenants are violating any of their obligations.

Therefore, the owner is being deprived of the peaceful enjoyment of his property. Not only is the owner being forced to enter into a lease agreement by means of a law which he could not have anticipated since it was introduced after the publication of the temporary emphyteusis contract, but also the owner is subject to a disproportionate and excessive burden once the rent he is receiving is at best ludicrous when compared to the market value of the property.

Even though the government is granted a wide margin of discretion in implementing laws and policies and in the determination of what is to be considered in the public interest, and despite that social housing needs some form of regulation by the state, an individual should not be expected to be burdened with having to forgo his propriety rights.

A fair balance cannot be struck if the owner is forced into an unfavourable lease, while receiving a pittance in rent and having no reasonable ordinary remedy with which he may regain possession of his property.

The violation suffered is even more damaging when one considers that in many cases, the owner, or his immediate family, would be paying rent or a home loan himself, while receiving a pittance for a property which, were it not for an unconstitutional law, would be in his possession.

Luckily the situation has been remedied by the courts in the awarding of compensation for damages suffered, such compensation being equivalent to the loss in rent from the termination of the emphyteutical concession.

However, such compensation only applies for past losses; the owner should also be granted a just remedy in order for the violation of his right to cease.

The most suitable remedy would be ordering the tenants to vacate the property. Once the law which creates the lease has been declared unconstitutional, the tenants should not expect to keep on making use of the property because of a legal provision which prejudices the owner’s rights.

Therefore, once the law is invalid, the lease is also invalid and the tenants are occupying the property without any title at law. Consequently the property should be returned to the owner.

Alternatively the tenants should be ordered to pay a monthly rent which reflects the market value of the property and which should be increased periodically.

However, even though this would diminish the burden suffered by the owner, the owner would still be deprived from the full enjoyment of his property, and this because the owner should not be forced to enter into a lessor-lessee relationship which he would not have agreed to. This would lead to a situation where the owner would still be deprived of freely enjoying his property as he deems fit.

Despite the fact that the amendments introduced by Act XXIII of 1979 have been declared unconstitutional on numerous occasions, Parliament has failed legislate accordingly and has left it up to the courts to remedy the situation. However, Parliament is the legislative pillar and it should be Parliament which introduces legislation which safeguards the owner’s rights and which caters for social housing needs.

Even though an effective housing policy is of utmost importance, such a policy should in no way impinge on the property rights of the individual and, therefore, the owner of a property should under no circumstances be expected to suffer an unfair and disproportionate burden.

Daniel Buttigieg specialises in dispute resolution and litigation matters at Fenech & Fenech Advocates.