The Housing Authority never changed the original conditions regulating a lease transfer of land following the redemption of the ground rent, Social Affairs Minister Michael Farrugia said in Parliament.

He was answering a parliamentary question by shadow social policy minister Paula Mifsud Bonnici on Tuesday.

This newspaper has reported that social housing would be negatively affected if the government sanctioned the lease by the General Workers’ Union of parts of its Valletta headquarters to third parties.

An investigation by the Auditor General concluded the GWU broke lease conditions when it sublet office space to State billing company ARMS Ltd, the travel agency Vjaġġi Untours and the restaurant Sciacca Grill.

This was contested by the union, which said it relied on the advice of Judge Philip Sciberras.

The government said it was still weighing the repercussions of the Auditor’s report, which was tabled in Parliament in October, and sought the advice of the Attorney General.

In his report, the Auditor General noted that his recommendation for action against the GWU was based on the Attorney General’s advice. Yet, the government said it was still mulling its options when asked whether it would do what the National Audit Office had suggested.

When pressed, a government spokesman had admitted the union’s decision, if uncontested legally, would have repercussions on social housing agreements.

Since its formation in 1976, the Housing Authority has included a clause in its social housing contracts establishing that use-related conditions are not extinguished when the ground rent is redeemed.

The condition sought to ensure that persons benefiting from government land did not end up exploiting the land received at discounted prices.

Legal experts commenting on the government’s reluctance to act on the Auditor General’s advice had told this paper the law was clear: “It is a political decision that now needs to be taken.”

If the government were to accept the union’s argument that the subletting of parts of its headquarters was regular because the GWU had redeemed the ground rent for just over €16,000, it would open up a Pandora’s Box for the Housing Authority, these lawyers said.

In its conclusions, the Audit Office urged the Government Property Division “to establish, through legal action, whether the conditions of the emphyteutical contract survive the redemption, and in the affirmative, institute judicial action against the union, or any other type of action deemed suitable.”