Retailers who not so long ago renewed the lease of their government-owned premises are claiming that a 10-year restriction “policy” on the subleasing of their shop has been imposed despite no such condition exists in the contract.

However, the Lands Authority is refuting such accusation saying the conditions of the lease state clearly that any request for subleasing can be refused at its “absolute discretion”. 

The issue revolves on a scheme issued in 2015 by the defunct Government Property Division, whose functions and responsibilities were taken over by the Authority in 2017. Under the Shops Scheme, as it was called, tenants were offered the possibility to renew their emphyteusis for a further 45 years on a list of conditions.

The ground rent varied from €20 to €500 per square metre depending on the location, with prime sites having the most expensive rate.

According to a draft copy of the contract, seen by the Times of Malta, as well as a government notice published in the Government Gazette on May 8, 2015, tenants could apply to transfer their lease to third parties with the government’s consent. While both of these documents did say that the government had “absolute discretion” on this matter, there was no clause saying that such request could only be made after 10 years had elapsed from the contract.

Retailers feel deceived by the government

The issue came to the fore recently, when the Times of Malta was contacted by a number of retailers who were allegedly told by a Lands Authority official that they were not allowed to apply for such concession at such an early stage.

The retailers, who spoke to this paper on condition of anonymity, said they felt “deceived” by the government.

“Though when we signed we were perfectly aware that the government could refuse any request to sublease the shop, there was nothing in the contract which precluded us from applying,” an irate shop owner said.

“We are now being told by the Lands Authority that such applications cannot be accepted under a new policy whereby these requests can only be considered once 10 years have elapsed from the signing of the lease,” he added.

The shop owner also claimed that despite such restriction a number of retailers who had benefitted from the 2015 scheme, had “unofficially” transferred their lease to a third party and in some cases even changed the use of the premises. 

“Yet, the authorities seem to be turning a blind eye even though it is an open secret that such things are happening,” he said.

Asked for a clarification on the matter, the Lands Authority insisted that the emphyteutical concession said clearly the any request to transfer to third parties could be “freely refused by the government, at its sole and absolute discretion”.

However, it could not be established whether the 10-year restriction mentioned by the retailers was a recently-adopted policy or not, as the Authority made no reference at all to this matter.

Asked about claims that some tenants had already breached the contract, the Lands Authority said it would take the appropriate steps should it result that anybody was infringing the agreement.

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