A “guillotine” clause will see many retailers with rental contracts pre-dating 1995 automatically evicted in five years’ time, the Chamber of Small and Medium Enterprises (GRTU) warned yesterday.

This guillotine measure is turning many businesses into melting blocks of ice

The retailers’ union wants political parties to clearly say, before March 9, that if elected they will remove the “draconian” deadline clause and put rent disputes to bed by introducing a mathematical formula to calculate future rent increases.

Such a formula is already provided for by the 2009 rent law reform, but has never been enacted. If it is not passed by the end of the year, commercial properties with pre-1995 rental contracts will see their rent rise by five per cent of the original sum every year come next January 1.

According to the 2009 reforms, commercial tenants with automatically renewable pre-1995 lease contracts will also lose all rights to their rental property come 2028. If a property is sub-leased, that deadline comes a whole decade earlier – June 2018.

“This guillotine measure is turning many businesses into melting blocks of ice,” said GRTU director general Vince Farrugia.

“And what’s even worse is that many commercial tenants don’t even know about it yet.

“They think their business will be inherited by their children... wake up! Your businesses are vanishing before your eyes,” he told a room packed with GRTU members.

Mr Farrugia insisted the GRTU was not trying to cement rents at artificially low levels.

“We’re not saying the old rental system is fair. But neither is it right that commercial tenants, some of whom have invested huge amounts of money into their leased property, will be automatic-ally evicted by this drac-onian measure.”

He and his son, GRTU lawyer Jan-Karl Farrugia, insisted a mathematically calculated rental index would clear up disagreements and give both tenants and property owners a fair deal.