How the Old Rentals Saga Exposed a Paradox of Human Rights in Malta

The inability, even by the propertied class, to voice a strong and unified message in defense of their rights, reveals a disconcerting element of submission and lethargy at a popular level.

by Kurt Xerri

Collage by the IotL Magazine (image by Michal Jaskolski / Flickr / Some rights reserved)

 

[dropcap]O[/dropcap]ver the past years the local press has periodically been reporting a number of “landmark” human rights judgments handed down against the State for the violation of landlords’ right to property, in relation to old rental agreements. Readers might assume that each decision is breaking new ground, however, these predictable pronouncements are simply the reiteration of a principle long established by the Strasbourg Court and embraced by our highest Constitutional organ. 

The reasons for which it is taking landlords so long to obtain a remedy are multiple, and they expose the significant resistance that “fundamental” rights still encounter in permeating the Maltese legal sphere. The case of landlords is particularly noteworthy since the victims are, presumably, among the more affluent and better educated in society. 

At the same time, the whole issue illustrates how the ‘human right’ to private property—and the economic ‘right’ to capitalise such private property, that is, to be able to use it for profit—creates irresolvable contradictions: the protection of tenants’ rights necessarily runs counter to the protection of landlords’ rights—to treat this as an issue of human rights exposes the relationship between human rights discourse and an order based on private property and class distinctions. 

The interests of the owners of capital, here of immovable property, stand in a necessary opposition to the interests of those who have to pay rent. Against this backdrop, the rentals saga is a good example of the paradox of trying to uphold universal human rights in a class society. 

 

The Old Rentals Saga in a Nutshell

In the recent First Hall judgment in the names of Anthony Debono et v. The Attorney General, a tenant-protecting provision was declared to run contrary to human rights and, consequently, deemed incapable of prolonging the tenants’ occupation of the rented premises*. The motivations of the Court were based on the extremely low rental value and the length of time that the properties had been subject to these rigid controls. 

Both the media as well as certain legal practitioners insisted on calling the decision a “landmark” judgment despite the fact that the Courts have been reiterating the same principle, in an endless number of equally-defined “landmark” pronouncements**. Naturally, the question is why, despite these periodic judgments, the position of aggrieved landlords hardly seems to have improved. The answer, perhaps, lies in the indifference of Parliament, the judicial conservatism of the Courts and, perhaps, the inertia of civil society, even in its more privileged sectors.

The root of this recent controversy is the European Court of Human Rights’ (ECtHR) assumption of certain supervisory powers over local housing policies. Europe’s highest human rights court had kept affirming its position that the State had a broad authority in the socio-economic sphere, and that local policies would not be reviewed, unless implemented without any reasonable foundation. This trend was inverted in the decision of Hutten-Czpaska v. Poland (2006) where it set a precedent ruling that, despite the State’s wide margin of appreciation entitling it to decide on the extent of control over the use of property, landlords had an “entitlement to derive profit from their property”.

Although this affirmation was criticised for challenging the social democratic philosophy of property (replaced by the free market logic as the norm for judging all State action affecting property), this became the standard adopted by Strasbourg, which had an inevitable effect on Malta.

The power of this broader interpretation of the Convention in the Maltese context was confirmed in the true landmark decisions of Ghigo v. Malta, Fleri Soler and Camilleri v. Malta and Edwards v. Malta, all decided shortly after Hutten-Czapska in 2006. In each of these cases, the property in question had been requisitioned, however, the Court’s justification did not concentrate on the legal or statutory basis on which landlords had been subjected to the controls but rather on the practical effect that the regulations were having on the economic position of landlords.

 

 

The courts thus established that the State unjustly forced the applicants to bear most of the financial costs of providing social accommodation—this formulation may indicate one of the reasons why the State is not keen on changing this situation as it basically entails a convenient privatisation of public responsibilities. 

 

What’s Behind the Saga?

But still: if the legislation at the European level clearly favours the interests of property owners, why didn’t it lead to abolishing past rental controls at once? Instead of benefitting from such a legislation a priori, the landlords had to defend their rights individually, via lawsuits. 

One would have expected the Maltese Parliament to rush through a set of amendments in order to rectify the situation immediately. However, this was not the case. 

 

 

Parliament acted with complete oblivion as to the significance of the ECtHR decisions or, even worse, the dire consequences of failing to take proper action. Despite the ECtHR’s recommendation, dating as far back as 2008, to define what would be considered as a “tenant in need”, “fair rent” and “decent profit”, the legislator merely fixed the minimum annual rent to €185 a year and limited the instances when such leases could be transferred following the death of the tenant. The reform had. from its outset, been described as a “very limited attempt at redressing the rights of long-suffering landlords”*** and its rejection by the ECtHR (Aquilina v. Malta, 2014) hardly came as a surprise to any.

It was only in 2018 that, in the wake of a series of Constitutional Court decisions delivered against sixteen households occupying the same block of buildings, Government was made to revise the conditions through which tenants who had originally held a title of emphytheusis (ċens) would be able to prolong their title over the premises. Occupants of such properties are now being immediately subjected to a means test in order for the Court to determine whether such tenant would, in fact, be deserving of protection.

Moreover, should this right be confirmed, the tenant would only be able to continue doing so indefinitely at a rent which reflects 2% of the market value of the property, thus, the new mechanism also adopts a flexible criterion, capable of adjusting to the variability of property prices. In other words, this was the action that could have been taken ten years ago, yet had failed to materialise.

And what about the Maltese Courts? Were they quick to respond to the Strasbourg jurisprudence?

Although not immediately, and with exceptions relating to the date of entry into force of the rental agreement, which would later be denied by the ECtHR (Zammit & Attard Cassar v. Malta, 2015),  the Maltese Constitutional Court soon embraced the reasoning of the Strasbourg Court in its entirety, and the merits of each case concerning any imposed landlord-tenant relationship deriving from a pre-1995 agreement became consistently clear. 

Nevertheless, due to what Kevin Aquilina terms an “unconstitutional interpretation of the Constitution”, the finding of a Constitutional breach does not necessarily create immediate legal havoc. In fact, a declaration of unconstitutionality in favour of only one landlord does not render the law immediately invalid with respect to every other landlord affected by that provision.

 

 

On the contrary, every individual landlord would be required to obtain a declaration of unconstitutionality in his favour, in order to render that law null and without effect with respect to his specific case. This has led Giovanni Bonello to famously assert that: “Malta now has laws that are valid and invalid at the same time.” ****The Maltese Constitutional system thus obliges every single one of the estimated 14,000 landlords (the figure only includes premises leased for residential purposes) bound by pre-1995 rent control legislation, to seek individual Constitutional proceedings in order to obtain a remedy.

This arguable interpretation is not only lengthening judicial procedures, thereby adding to the claimant’s judicial costs, but it is also leading the government to take action at a much later stage, i.e. only when a number of similar cases accumulate and the tenants would be at the desperate point of eviction, rather than immediately as soon as the specific provision is first found to be unconstitutional.

How has civil society reacted in the face of all this?

 

 

Despite breaches of their rights and the State organ’s hesitant response, strong lobbying activity by aggrieved landlords has been absent. In fact, it was only the Malta Developers’ Association which appears to have recently taken up their cause, although saving the odd press statement, it does not seem to be engaged in any structured dialogue with government. This inability, even by the propertied class, to voice a strong and unified message in defense of their rights, reveals a disconcerting element of submission and lethargy at a popular level. Ultimately, it is this indifference which enables the juridical system to treat such evident and flagrant violations with such callousness.

What does the old rentals saga tell us about human rights culture in Malta?

This legal rigmarole that has been going on, at least, since 2006, illustrates the failings of a system not only at a political and juridical level, but also at a social one. 

Whilst the legislative arm of the State has kept disproportionately harsh measures statically in place and an arguable Constitutional interpretation is effectively keeping unconstitutional laws in force, victims of the system failed to join forces to lobby for their interests collectively. If not even the most affluent members of Maltese society are able to recognise mutual interests and defend them as an organised group, the less privileged have fewer available mechanisms to stand up for their rights. Class antagonism is not politically articulated, neither from above—let alone from below. 

 

 

Moreover, the misconception and misinterpretation of rights is not only transversal, but it even appears to transcend class. The genuine embracement of human rights requires a much greater appreciation of such fundamental norms at a societal level, and it is only this consciousness that would prevent State organs to collude with each other against ordinary citizens. 

However, taking this one step further: from the conundrum of defending owners’ rights to make a profit from others, we could also gain an insight into the paradox of the ‘human right’ to property, which divides humanity into antagonistic classes and unequal individuals. In a more radical perspective, both landlords and tenants could unite to demand from the State enough support for social housing—and not the continuation of a privatisation of this responsibility—or even more radically, to demand a form of socio-political organisation where accommodation for one is not a source of profit for another.

*Landmark judgment opens pre-1995 leases to scrutiny, Times of Malta, 8 May 2019; Pre-1995 leases opened to scrutiny after landmark court judgment, The Independent, 8 May 2019; Landmark leasehold judgment appealed, but more lawsuits expected, Times of Malta, 3 June 2019; and more recently: Rent laws delcared unconstitutional again, Times of Malta, 11 June 2019 (in relation to the more recent case Catherine Tabone v. The Attorney General based on similar facts).

**Court orders eviction of tenants from requisitioned house in landmark case, Times of Malta, 10 December 2010 ;
Landmark ruling says housing law protecting tenants from eviction is ‘illegal’, Maltatoday, 28 October 2013 ;
Court in ‘landmark ruling over rent laws’: Property rights were violated, Times of Malta, 13 December 2014.

***P. Caruana Galizia, “The gentle art of rent reform”, Times of Malta, 28 August 2009

****For a comprehensive read and an authoritative assessment on this topic see: K. Aquilina, “The Supremacy of the Constitution of Malta: Fact or Fiction?”, Dike kai nomos: Quaderni di cultura politico-giuridica, 1:3 (October 2012/March 2013) and G. Bonello, Misunderstanding the Constitution: How the Maltese judiciary undermines human rights, (BDL, 2018).

Dr Kurt Xerri lectures on Civil Law at the Faculty of Laws at the University of Malta.