Heir inherits the usufructuary's claim for low rent

The Constitutional Court ruled on 25 May 2026 in X.M. vs E.A., an owner's claim over a flat let under the Housing (Decontrol) Ordinance (Chapter 158 of the Laws of Malta). Chief Justice Mark Chetcuti, Mr Justice Anthony Ellul and Mr Justice Robert G. Mangion held that an owner who is also universal heir of the former usufructuary may claim compensation for the breach that person suffered. The court allowed the appeal and ordered the State Advocate to pay €31,477.

The facts

The flat was decontrolled and let to the tenant by a written agreement of 15 November 1979 at Lm150 a year. Under article 5 of Chapter 158, as amended by Act XXIII of 1979, the lease renewed indefinitely at the tenant's option. The rent rose to €900 a year by agreement in 2019.

On 8 July 2016 the owner gave the flat to the applicant by donation but kept its use and usufruct for life. The donor died on 13 May 2021, and her will of 9 October 2018 made the applicant her universal heir. The applicant sued the tenant and the State Advocate, claiming a breach of article 1 of the First Protocol and compensation.

The State Advocate argued that the applicant became bare owner only in 2016 and usufructuary only in 2021, after article 12B took effect on 1 August 2018. On 11 October 2024 the First Hall of the Civil Court (Constitutional Jurisdiction) agreed. It held that a donation does not pass the right to claim for a past breach and dismissed the claims, with costs against the applicant.

What the court held

The court found that the first court had not addressed a decisive fact: the applicant was not only the donee but also the donor's universal heir. It applied its own judgment of 7 October 2024, given in another case brought by the same applicant. There it held that an heir acquires the patrimonial rights of the deceased, including a right to compensation, even where the heir had earlier received the property by donation.

The court held that the applicant “kellha kull dritt li tressaq din l-azzjoni u titlob kumpens bħala l-werrieta tat-testatriċi” (had every right to bring this action and claim compensation as the heir of the testatrix). It rejected the tenant's plea to be released from the suit. Tenants do not answer for the breach, but they are joined so that the proceedings are complete.

The decontrol certificate, the 1979 agreement and the tenant's own evidence brought the lease under article 5. Following its settled case law, the court found that article 5 breached article 1 of the First Protocol until 31 July 2018, because it renewed the lease indefinitely without adequate rent. From 1 August 2018 article 12B gave owners a remedy before the Rent Regulation Board.

A court-appointed architect put the rent the flat could have earned from 1995 to 2018 at €74,710. For May 1987 to 1994 the court took an average of €450 a year, or €3,821. It fixed the potential rent from May 1987 to July 2018 at €78,531, against about €12,500 actually received.

Applying the method of the European Court of Human Rights (25 March 2021), it deducted 30% for the general interest, leaving €54,971. It then deducted 20% because the flat might not have been let throughout, leaving €43,977, and took off the €12,500 received. That left €31,477 in pecuniary damages.

The court awarded no non-pecuniary damages. These are not inherited, and the applicant herself did not suffer the breach, since the use and usufruct stayed with the donor. It annulled the first judgment, ordered the State Advocate to pay €31,477 and put the costs of both instances on the State Advocate.

Why it matters

A donation alone does not carry the right to claim for a past rent-law breach, but succession does. When a client received property by donation and later inherited from the donor, the lawyer should plead the inheritance and prove it with the will and the causa mortis declaration. The claim can then cover the donor's years, though moral damages are not inherited.

Where it sits

The case turns on the difference between a transfer inter vivos and succession. A breach of a fundamental right gives a claim to the victim that cannot pass by donation, but a universal heir steps into the legal position of the deceased. The first court had relied on the Constitutional Court (22 June 2022) for the first rule; on appeal the court applied the second.

It relied on its own judgments of 7 October 2024 and 9 October 2023, both in cases brought by the same applicant, and of 30 November 2022 on standing as heir. It followed its line on article 5 of Chapter 158, with breaches ending on 31 July 2018, and the compensation method of the European Court of Human Rights (25 March 2021).

Source

Constitutional Court, 135/2023/1, 25 May 2026: 135/2023/1