Resumen de Renting as a true housing alternative in Malta: lessons from the past and suggestions for the future in a comparative context
The law of letting and hiring is a complex field of study in that it is a legal institute that brings into question the very fundamentals of distributive justice. The letting equation, in fact, presupposes a situation of economic inequality wherein the landlord holds at least two properties in ownership, whilst the tenant holds none. The difficulty in regulating this relationship, particularly in capital-driven economies such as ours, stems from that fact that whilst for the landlord the rented property represents an income-producing asset, for the tenant it constitutes a home. The challenge for every government is, therefore, that of combining the capitalist logic of profit with the State’s duty to ensure adequate housing conditions for all.
Interestingly, public law has recently led to the contemporaneous consolidation of property rights for landlords as well as housing rights for tenants. Although this development may prima facie seem paradoxical, human rights instruments have de facto established the parameters within which the legislator may devise national policy. In more concrete terms, the legislator cannot permit a state of affairs wherein landlords are deprived of their legitimate profit, at least where the situation is not such as to warrant decisive intervention on the part of the State, but neither can it allow a situation where vulnerable individuals are left facing precarious housing conditions.
Developments in the human rights sphere have, in fact, been progressively emphasising adequate housing conditions for individual citizens. The first document to assert this right was the Universal Declaration on Human Rights, which provided the foundations for the International Covenant on Economic Social and Cultural Rights. Nevertheless, the document that declares the right to housing for everyone in the most unequivocal manner is the Revised European Social Charter that has successfully been availed of, inter alia, in staying the eviction of a number of protected tenants who would have otherwise almost certainly faced the prospect of homelessness.
State intervention in the housing sphere that finds no root in the general interest of its citizens is, however, held to be inadmissible under the European Convention on Human Rights. In this regard, property rights have gained additional strength since the European Court’s adoption of a much more liberal stance with respect to Article 1 of the First Protocol. Whilst previously, in fact, members of the ECHR’s judicial panel were particularly reluctant to scrutinise national housing policies, even when the imbalance against landlords was markedly disproportionate, the more recent decisions have signaled a much more audacious approach. One of the most notable denunciations was leveled at the Maltese rent control statutes, in a series of judgments that consolidated the decidedly more liberal approach that was established in the landmark decision of Hutten Czapska v. Poland.
The main objective of this study is therefore that of analysing, first and foremost, the unfortunate Maltese experience with tenancy law regulation and, secondly, that of proposing a functional regulatory framework that fits within the parameters established by the international courts i.e a regime capable of striking the necessary equilibrium between the two parties in a manner that investment remains sustainable for the landlord whilst a reassuring degree of stability is guaranteed to the tenant. The tools used for this analysis are Nasarre’s seven evaluative criteria for landlords and tenants; whilst landlords are driven into the market by a) high levels of profitability, b) ample rehabilitation capabilities, c) a reliable range of guarantees and d) expedite evictions procedures, tenants look for e) stability, f) affordability and g) flexibility. The analysis suggests that neither a decidedly pro-tenant tenant approach nor an excessively pro-landlord attitude are capable of spelling out the success of the market, particularly in terms of equity between the contracting parties.
The study follows to seek alternatives in other Southern European States that do not only share with Malta the same welfare characteristics, but also the same primary elements of housing policy. The comparative approach reveals that private rentals did neither represent a solution for the Southern European policy maker, nor an ambition for the growing number of households. In fact, private rentals are merely a marginal, poorly-regarded ‘third option’ between the widely desired home ownership and the increasingly inaccessible social housing.
The key question to be answered is whether tenancies should be fundamentally regarded as a short-term or a long-term form of tenure. By long-term, one does not mean that leases would prolong themselves indefinitely at the expense of the landlord, but that these would constitute a true housing alternative whilst maintaining a lasting and reasonable equilibrium between the parties.The main conundrum in this respect lies in balancing out landlord profitability and tenant stability since whilst the former is necessary to maintain investment in the sector alive, the former is essential in rendering leases a true housing alternative. In this regard, The general models of regulation are two with one foreseeing a fixed tenancy duration (as the one that is currently in place in Spain, Greece and Italy) and the other one envisaging indefinite openended leases.
Amongst the most significant conclusions of the study were the following: a Private rental policy must be based on clearly established housing rights b The decision whether to intervene in the private rental sector or not is no longer in the State’s entire discretion c There is a need for stronger housing rights in Malta d The belief that liberalisation represents the ultimate solution for the private rented sector is deeply fallacious e The balancing between the respective interests of landlords and tenants as the way forward for a stronger private rented sector f Rent control does not necessarily lead to the contraction of the sector g The sector needs overall increased standards h Greater dialogue is needed between government and the respective stakeholders
