‘We don’t make the law – we just apply it’ – Housing Ministry on six-tenant limit

The change to the rent regulation law that will see a limit of six tenants being imposed on all rentals, no matter their size or number of bedrooms, is actually simply a way to enforce already existing legislation introduced close to a decade ago.

The update has drawn widespread praise for bringing a measure of control to a rental landscape where co-shares have been found housing up to 45 people.

In that particular case, in Sliema, a police inspection took place alongside Housing Authority and Health Ministry officials, with the Planning Authority (PA) also investigating. However, none of these entities had any effective bite, with the PA issuing an enforcement notice – notoriously ignored against a pittance of a fine – and the Health Ministry simply warning of legal action unless the owner complies.

The Housing Authority, meanwhile, was effectively powerless, since the legal act that established it makes no reference to the number of persons that could be registered to a single property.

BusinessNow.mt caught up with Stefan Cutajar, advisor to the Ministry for Social and Affordable Accommodation, to find out how the new changes to the rent law will empower the Housing Authority to take action in such cases.

Dr Cutajar is keen to begin by clarifying is that the limit of six persons included in what have been described as “new rules” is simply a cross-reference to existing legislation.

Specifically, Legal Notice 74 of 2014, Subsidiary Legislation 552.15 – Development Planning (Use Classes) Order, which regulates the classification of different buildings according to their use.

For example, many would be familiar with the difference between a 4B property, used for retail, and one registered as 4D, which authorises its use as a food and beverage establishment where cooking is allowed.

Seemingly less commonly known is that Class 1 properties – that is, dwellings – have their own particular rules. Properties registered as regular residences can house a family of any size, but not more than six residents otherwise.

The only exception is lodging for not more than 16 persons, provided that the operation is licensed by the Malta Tourism Authority and the premises are located within an Urban Conservation Area – effectively designed to allow Airbnb short-let apartments to avoid obtaining a change of use permit from the Planning Authority.

The six-tenant limit is therefore a longstanding rule in its 10th year, and one which, Dr Cutajar admits, has also created problems for developers, who sometimes build large apartments with four bedrooms or more only to find that they cannot legally present them as rental opportunities.

“The problem,” explains Dr Cutajar, “was that the rental reform of 2020 did not specify any limit to the number of tenants, leading some owners to remain ignorant of the law, or feel that it does not apply to them.”

This led to situations where some landlords “stuffed as many beds as possible” in their property, charging around €200-€250 per bed and raking in the cash for what often turn out to be unhygienic living quarters straddling the line between accommodation and slum.

What the changes to the rent regulation legislation do is explicitly include a reference to the relevant clause in the Use Classes Order, without however spelling out a particular limit.

“So this is not a new law at all, just a reference – and perhaps a reminder – that properties shared between non-families members can only house a maximum of six people.

“What we, as the Ministry, can say, is that the moment the use class order is updated, so will the rental legislation, since it refers to the clause in SL 552.15, not ‘six’ per se.”

Importantly, the Housing Authority will be authorised to issue hefty fines over €2,300 to landlords found to have lied or misled on their registration application, which is expected to be sufficient deterrent to prevent some of the more flagrant abuse.

Dr Cutajar continues: “It is also important to note that this does not mean that a one-bedroom property can also have six registered tenants.

Predictably, landlords with larger properties are none too pleased by the move to enforce the six-tenant limit, with many voicing their complaints to the Ministry.

“Till now, we cannot say anything to these owners, as the use class order does not make any difference between small and large properties. And ultimately, we cannot make an interpretation of the law, only apply it.

“At this point in time, we only wanted to align our law with the existing planning laws.”

Dr Cutajar warns landlords against assuming that the general limit of six tenants means that every property can have that number.

“Landlords who, for example, register six people to a one-bedroom property are still liable to prosecution by planning or health and safety officials.”

He also points out that a rental contract is assessed against rent laws, and therefore cannot be used as a defence when accused of breaking other laws.

“Some landlords may think that having a valid rental agreement approved by the Housing Authority exempts them from needing to follow other laws. That is categorically not the case.”

In other words, what the Housing Authority considers is whether the contractual relationship between the landlord and the tenant is in line with the requirements laid out in Chapter 604 of the Laws of Malta – the Private Residential Leases Act.

As long as it checks out on those terms – which now include a limit of six persons to any property – the contract will be accepted.

However, a landlord falling afoul of planning or health and safety rules is still liable to facing charges, says Dr Cutajar while stressing, again, that “six persons is the absolute limit, not the rule.”