The Rental Agreement
Understand what to expect from the tenancy agreement when renting property in Malta…
There is little paperwork involved in renting a property. Once a property has been found the tenant is required to sign a tenancy agreement, which is generally provided by the real estate agent. This agreement lists the rights and obligations of both tenants and owners/landlords.
The tenancy agreement will include specific information about the rental property, including payment terms of rental and utility bills, the rental period, length of notice before termination of tenancy, rules for common areas, as well as additional services provided by the owner/landlord, including cleaning services and maintenance.
The contract signing between the tenant and owner/landlord is usually carried out in the presence of the real estate agent. The tenant should bring with him/her a valid identification document for the signing process.
A deposit is paid upon signing the contract which is returned when the tenant leaves the property. This is usually equivalent to one month’s rent and serves as security from which any damages are deducted upon expiration of the tenancy period.
An estate agents' fee which normally amounts to half one month’s rent worth is also paid by the tenant, although some agencies waive this requirement.
If any of the terms of the agreement are breached by one party the other party is entitled to terminate the contract.
Short-term rental is usually defined as six months or less, while six months or more is defined as long-term.
Rental rates in Malta are relatively cheaper than mainland Europe, however, the actual prices vary greatly depending on the location, the type and finish of the property in question and the duration of tenancy.
Utility bills, including electricity, water, TV and internet, are not usually included in the monthly rent and have to be settled separately by the tenant with the owner/landlord or the supplier of the service.
There are two tariffs for utilities The 'domestic' electricity tariff is considerably higher than the 'residential' one. Residents in Malta are eligible for the lower and more beneficial 'residential' tariff if the utilities are changed into their name when leasing a property. Ensure that when signing the tenancy agreement contract, the method of paying the utility bills is stipulated.
The owner of the property is not obliged by law to switch the utilities to the name of the tenant and the switch can only be made with agreement from both parties. A deposit is payable (refundable when switching back) in order to change to the residential rate.
- Find out more about the different utility tariffs applicable in Malta
Tenants are expected to set up subscriptions themselves with television, telephone and Internet suppliers. The main providers of these services in Malta are GO and Melita, who provide either the option of paying a monthly subscription for the services consumed or a minimum two-year contract with fixed fees.
When renting or leasing a furnished or unfurnished property it is essential to compile an inventory report. Ideally this will be agreed by both parties at the start of the lease. Letting agents will usually provide this service for a fee.
Deposits and Estate Agency Fees
A deposit must be paid to the lessor to insure against damages during the tenancy period. This is usually the equivalent of a month's rent. This should be returned to the outgoing tenant at the end of the lease or partially used to pay bills or repair damages if necessary.
Landlords should take out appropriate insurance on their property when letting. A building and landlord's contents insurance policy will often cover damage from fire, natural disasters, malicious damage, water, falling trees, theft, rent income loss and damage to home contents.
Landlords are obliged to register with the VAT and Income Tax Department.
- Read more about the tax due on rental income in Malta
Energy performance certificate
If renting a property built after January 2009 tenants are entitled to receive an Energy Performance Certificate (EPC). The energy performance inspection rates energy efficiency of the building and its carbon emissions. The inspection must be carried out by an authorised assessor.
- Find a list of authorised assessors (PDF)
The EPC certificate is valid for 10 years.
When moving into a shared building or community it is necessary to obey the rules laid down by the administrators of the area as per the Condominium Act.
Terminating a Contract
The notice period should be stipulated in the rental agreement. Landlord and tenant are able to freely negotiate the termination of a contract. If either party breaches any of the terms and conditions stipulated in the rental contract, the contract can be terminated.
One of the most common problems faced by foreigners seeking to rent property in Malta is being able to verify the legitimacy of the owner’s claim on the rental property, a situation which is best avoided by involving a real estate agent.
Another common problem is that owners/landlords do not usually provide receipts for rent and utility bills payments. Whilst the former should be discussed with the owner/landlord, the latter can be resolved by checking water and electricity consumption on the meters installed or by checking on to the ARMS Ltd website.