A division does not pass on a claim for rent-law breaches

The First Hall of the Civil Court (Constitutional Jurisdiction) on 11 March 2026 awarded €24,405 to co-heirs whose half share in a garage was let under the old commercial rent law. Mr Justice Lawrence Mintoff held that the law breached their right to property from 1 May 1987 until a division of the estate on 28 April 2015. He also held that the division did not pass their claim to the relative who received the garage.

The facts

The garage stands on land that the applicants' grandparents acquired in 1962. A company rented it as a store, and the first rent receipt in the records dates from 1 February 1971. The lease was protected by the Reletting of Urban Property (Regulation) Ordinance (Chapter 69 of the Laws of Malta).

The record lists the case as M.J. vs Avukat Tal-Istat, but M.J. appeared only to represent his mother, M.M., one of five co-heirs who together held three of six shares. In the 2015 division the garage went to their uncle, who had already won compensation in his own constitutional case. The applicants sued the State Advocate and the tenant company.

A court-appointed architect valued the rent of the whole garage at €1,792 a year in 1987, rising to €3,333 by 2015. The rent actually received for the applicants' half share over the whole period came to about €1,775.

What the court held

The court released the tenant company from the case. The applicants no longer owned the garage, so the judgment could not affect a lease that was now foreign to them, and any breach was the work of the State.

The State Advocate argued that the applicants gave up any claim when the garage was assigned to their uncle. The court disagreed. Heirs who succeed to an owner step into that owner's legal position and may sue for the period of ownership.

A division works differently: “permezz ta’ diviżjoni, wieħed ma jkunx qiegħed jidħol fiż-żarbun tal-predeċessur tiegħu” (by a division, one does not step into the shoes of one's predecessor). The right to compensation stays with the person whose rights were breached, and it is not a title that one can transfer during one's lifetime.

The court found no ordinary remedy that could address the rent or the end of the lease, so it did not decline to hear the case. It held that a store falls within the definition of “ħanut” (shop) in Chapter 69, and that the lease began before 1995 and was protected.

The claim under article 37 of the Constitution failed. Article 47(9) shields laws in force before 3 March 1962, and their later amendments, from challenge under that article. Both Chapter 69 and the Civil Code (Chapter 16 of the Laws of Malta) predate that date.

The claim under article 1 of the First Protocol to the European Convention on Human Rights succeeded. Rent control is a control of use, and protecting business tenants once served a legitimate aim. But the economy had changed, Act XXXI of 1995 freed new leases, and the increases under article 1531D of the Civil Code, added by Act X of 2009, could not reflect the market.

The State Advocate offered no justification, and the owners had no effective remedy to obtain a fair rent. Under article 7 of the European Convention Act (Chapter 319 of the Laws of Malta), the period of breach ran from 1 May 1987 to 28 April 2015.

For compensation the court took the architect's market rent of €34,344 for the half share. It deducted 20% for the aim of the law, rather than the usual 30%, because the lease was commercial. It deducted another 20% because the garage might not have been let throughout, and then the €1,775 already received.

That left €20,205 in pecuniary damages, to which the court added €4,200 in non-pecuniary damages at €300 a year. The State Advocate must pay within a month, with interest from the date of judgment, and bears five-sixths of the costs.

Why it matters

Co-owners who give up a let property in a division keep their own claim for the years they owned it, even without a reservation in the deed. The co-owner who receives the property does not acquire that earlier claim. Commercial leases attract a smaller deduction for the public interest than homes.

Where it sits

The case applies the Strasbourg test for rent control under the second paragraph of article 1 of the First Protocol: lawfulness, legitimate aim and a fair balance that does not leave the owner with a disproportionate and excessive burden. The European Court of Human Rights (23 October 2018, 30 July 2015 and 30 January 2018) supplied that test and the weight of procedural safeguards. The same court (11 February 2020) explained that a weaker public interest justifies a smaller cut from market rent.

On standing, the court followed the Constitutional Court (27 March 2015), which held that a claimant need show only a right in the property, not an absolute title. It relied on the Constitutional Court (22 June 2022), applied by the First Hall (31 May 2023), which held that a successor by donation cannot claim for breaches suffered by the donor.

On article 47(9), the court followed its own judgment of 7 May 2021. On compensation, it drew on the Constitutional Court (29 April 2016 and 30 September 2016), and on the Court of Appeal (12 July 2023 and 27 October 2021) for the 20% deduction in commercial leases.

Source

First Hall of the Civil Court (Constitutional Jurisdiction), 565/2024, 11 March 2026.