An increase in the minimum wage will have a domino effect on payment obligations due for revision in terms of contracts based on the minimum wage. A case in point are permanent, temporary and sub ground rents that are combined with the minimum wage when due for revision.

The ground rent due to the Government Property Division (Joint Office Section) recently increased by 600 per cent due to the contract clause providing an increase, within a stipulated period of time, based on the rate of the minimum wage in force that year.

It is worth noting that the Church authorities, other entities and individuals selling land they inherited retained and burdened such property with a revisable ground rent after an agreed number of years based on a statutory rate known to increase every now and then.

To add insult to injury, when purchasing such properties, some real estate agents and individuals imposed a further sub ground rent and still retained the original conditions inherited from the Church authorities related to an increase in the sub ground rent according to the term fixed in the original contract. Besides the increase of the sub ground rent, the new landlords are also adding the statutory bonuses provided annually by the government. This additional increase is based on a judgment by the Court of Appeal in favour of the landlord (2807/1997/1 of February 27, 2003). As a result, the sub ground rent will increase by a further 500 per cent.

Hence, the question of increasing the minimum wage is worth considering in depth in view of its domino effect.