DEPOSITS AND TENANCY AGREEMENTS IN MALTA

Rental Deposits and Tenancy Agreements


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Renting Accommodation in Malta

Deposits and Tenancy Agreements in Malta

When you rent a property in Malta, after all the process of actually finding somewhere you want to live, there are two major things that are crucial to both the tenant and the landlord. These are the deposit and the tenancy agreement.

Rental Deposits

A rental deposit serves two purposes. One is to hold the property for you and the other is to act as security. On accepting your deposit, the landlord has agreed that you will be the next tenant(s) in the property and will no longer advertise the property to let. The landlord then holds on to your deposit until the end of your tenancy, when subject to the terms set by the tenancy agreement, it is returned to you. If you have damaged the property or not left it in the specified condition, the landlord will withhold all or some portion of the deposit in recompense.

Parties are allowed to specify or negotiate the value of a rental deposit. Typically, in Malta, like in many other parts of Europe, a deposit is the equivalent of a month’s rent. This is usually not an insignificant sum, an amount you can rarely afford to lose. If you are continuing to rent and intend to move into a new rental at the end of your tenancy agreement, you need your deposit returned to become the deposit on the new rental. If you are buying a property, you need the deposit to help towards expenses.

Keep in mind that apart from a deposit, if you are using a real estate agent, there will be fees – either finder’s fee or admin fee (or sometimes both).

Tenancy Agreements

Do not take a rental property without a tenancy agreement and preferably a written one. Although it is possible to have a verbal arrangement, it is very hard to prove or disprove in a court of law should any legal action be required for any reason.

A tenancy agreement is a contract between a landlord and tenant. It sets out the rules and obligations for the tenancy and give certain rights to both parties. At its most basic, it gives the tenant rights to occupy the property and the landlord the right to receive rent. Nothing written in the tenancy must contravene Malta’s housing laws. In other words, the agreement must not only give you the rights that the landlord gives but also your statutory rights.

It cannot be stressed enough how important a tenancy agreement is. You need to be completely clear on all the clauses because there is some unsavoury history of landlords in Malta including some strange and unfair restrictions in rental contracts. The tenancy agreement also offers protection for getting back your deposit and most importantly, stipulates the rent.

Sadly, there was also a history of Maltese tenants suffering indiscriminate rent increases imposed by landlords. This changed with Rental Regulation Reforms that came into effect in January 2020. The reforms included the introduction of a minimum rental period and notice periods for residential rents, a cap on year-on-year rent increases and also a new law requiring landlords to register rental agreements with the local housing authority.

It should also be remembered that if you are moving into a shared building or community, you are obliged to obey the rules of such, as according to the Condominium Act.

An important part of the tenancy agreement is the inventory. This is relevant whether the accommodation is furnished or unfurnished. The inventory is a complete list of everything in the accommodation, even down to the number of knives and forks, if relevant. It is advisable that a tenant thoroughly ticks off everything on the inventory before signing it.

Another good precautionary measure is to take photographs of each room. If there are any areas of minor damage, damp patches etc, the landlord will not be able to claim for them at the end of the tenancy. Make sure photographs are time and date stamped.

FAQ

There is nothing to prevent you from doing so if the date of the tenancy has arrived and you have the keys to the accommodation but, be very sure you understand the reason why you haven’t received it yet. It is best to delay moving in until both parties have signed the agreement.
If you have not met the terms of the agreement, the landlord may retain part or all of the deposit. It might be you have caused damage or have not maintained the accommodation to a sufficient standard. A landlord may also keep a deposit for late or non-payment of rent.
You have to give notice of the period specified in the tenancy agreement. The landlord may agree to a shorter period, but this is totally discretionary. The landlord may also want you to forfeit a portion of the deposit for lost rental income and the inconvenience of having to find new tenants at a shorter notice.


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