The decision of the Rent Regulation Board in Carmen Cassar et vs Joseph Caruana et (RRB 324/22 NB) concerns an application based on Article 4A of Chapter 69 of the Laws of Malta. This judgement illustrates that the Board will apply legislative thresholds strictly and will not dilute statutory requirements through discretionary leniency unless expressly allowed by law.
The applicants, were the successors in title to a residential property located in Isla which had been leased since 1978 to the defendants. The original lease was agreed with the applicant’s late father, under a protected rent regime at an annual rent that at the time of proceedings amounted to only €195.
By invoking Article 4A, the plaintiffs requested a review of the rent in accordance with the statutory cap of 2% of market value, or alternatively, the eviction of the tenants on the basis that they no longer qualified for protection due to their means. The Housing Authority was also notified and participated in the case as amicus curiae.
Article 4A, introduced in 2021, represents a change in rent regulations. It applies to residential leases predating 1995 and seeks to ensure that the protective benefits of Chapter 69 are restricted to tenants who are genuinely in financial need.
Landlords may request a review of rent or eviction where the tenant fails a means test. The test consists of two cumulative components depending on the tenant’s age: An income threshold; a capital threshold.
Tenants who fail either threshold are no longer entitled to indefinite tenure. The law further explains that such tenants may be granted a two-year period to vacate, during which they must pay a compensatory rent to the landlord as determined by the board. Exceptionally, the board has discretion to raise the capital threshold where the tenant suffers from a serious disability confirmed by the Social Security Department and CRPD.
The board first dealt with preliminary procedural objections. The defendants argued that the applicants lacked standing as owners. This was swiftly rejected. The applicants proved ownership through an affidavit and a causa mortis. The board was satisfied that the plaintiffs had succeeded to the property upon the death of their father and were therefore entitled to bring the action.
Turning to the substantive issues, the board confirmed the applicability of Article 4A, noting that the lease was protected. The key question, therefore, became whether the tenants met the means test criteria. It was not disputed that the tenants’ income, consisting solely of retirement pensions and supplementary allowances, fell well below the threshold of €46,500. The board accordingly concluded that they passed this component.
The capital assessment proved more contentious. The tenants declared combined assets worth €323,280. Given that the legal threshold for individuals aged between 66 and 75 years old is €245,000, the tenants exceeded the limit by roughly €78,000. The defendants advanced several defences to try and reduce the figure or justify exemption.
Nonetheless, the board rejected all the tenants’ claims by applying a strict interpretation of the law.
The tenants argued that capital should be assessed per person, or that at least the spouse with lower assets should be tested individually. The board noted the judgement Nicholl Marguerite vs Darmanin, from February 2025, which confirmed that the regulations referred to joint capital of spouses.
Secondly, the tenants claimed they had received a lump sum from the estate of their deceased daughter and that this should be excluded. Upon reviewing the documents, the board determined that only €60,490 could be traced and verified. Even if this were discounted, the remaining capital still exceeded the statutory threshold. The board emphasised that personal tragedies cannot displace legal thresholds.
Thirdly, the defendants contended that the nominal value of their bond holdings was inflated and had diminished due to market instability. However, the board found no updated valuations as part of the defendant’s evidence and concluded that declared values must be accepted unless credibly challenged.
Finally, the tenants argued that exceeding the limit by a relatively small amount should not result in disqualification. The Board firmly rejected this, stating that the law permits no margin for discretion in such cases and that any excess, no matter how slight, disqualifies a tenant from protection.
The final argument advanced by the defendants was that Joseph Caruana suffered from a disability and was registered with the Commission for the Rights of Persons with Disability (CRPD). The board has discretion to raise the capital threshold if the tenant’s disability “is considered to be of a severe nature”.
Although Caruana held a CRPD disability card, the board established that he received an invalidity pension, not a severe disability allowance (SDA). Testimony by an official from the Department of Social Security clarified that only recipients of the SDA fall within the class of ‘serious disabilities’ and consequently the board declined to exercise discretion, rejecting the defendants’ claim.
Having determined that the tenants failed the means test, the board granted the defendants a two-year period to vacate the premises and ordered them to pay annual compensation of €3,320, calculated as 2% of the property’s market value (€166,000).
The applicants were assisted by lawyers Gianluca Cappitta and Ian Barbara.
This article may also be accessed on MaltaToday.
For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.
