Philip Fenech warns three-month ‘cooling-off’ period for short-lets could harm small property owners

The Malta Chamber of SMEs has expressed early concern over the government’s proposed short-let reforms, cautioning that a three-month vacancy requirement before converting a property into a short-let could “damage” small businesses and individual investors.

Tourism Minister Ian Borg last week unveiled a wide-ranging reform of the hospitality sector, which includes new limits on hotel heights and room capacities, as well as tighter regulation for short-let properties. Among the proposals is a “cooling-off” period requiring apartments to remain vacant for three months before being licensed for short-let use – a measure intended to discourage conversions from the long-term rental market.

However, Philip Fenech, Deputy President and Head of Tourism within the Malta Chamber of SMEs, tells BusinessNow.mt that such a rule could have serious financial implications for small operators.

“Any idle time, barring businesses from operating is damaging,” he said.

“Imagine someone having a loan / payment on the property and is being barred from receiving any form of income on that property for three months. Any downtime from operation is a loss of revenue which is felt greater for smaller businesses / individuals who would be depending solely from that investment. This is not seen as a viable option and cannot understand the rationale behind this proposal.”

Mr Fenech also weighed in on the proposed requirement for short-let properties to display a plaque with the owner’s name and contact information visible to the public. While acknowledging the importance of accountability, he argued that privacy must also be respected.

“It would make sense for contact details to be available for neighbours / condominium companies rather than being publicly available, striking a balance between giving privacy of the owner and keeping everyone happy,” he said.

He stressed that any new policy must be introduced gradually and in consultation with all stakeholders to avoid unintended disruption to the sector.

“Any change needs to be transitional and following adequate consultation with all stakeholders ensuring policy serves the whole community at large including commercial entities. One cannot shock the system as this will have a negative impact especially on those who would have invested or committed in these properties already having the respective licence to operate,” he added.

Mr Fenech clarified that these are preliminary, unofficial remarks, made ahead of formal consultation with the Chamber’s members.