Pre-1995 rent review stays near the 2% maximum

The Rent Regulation Board, presided by Magistrate Joseph Gatt, raised the rent of an old residential lease from €270.62 to €6,200 a year on 11 February 2026. The board held that, when it revises such a rent under the 2021 reforms, the percentage should sit close to the 2% maximum unless special circumstances are proved. In P.S. vs K.A., the tenant passed the means test and may stay in the home at the new rent.

The facts

The landlord owned a dwelling that had been let to the tenant for many years. The rent was €270.62 a year, paid six months in advance. Relying on Act XXIV of 2021, she asked the board to revise it to no more than 2% a year of the property's open-market value on 1 January 2025.

She also asked for a means test based on the tenant's income for 2024 and his capital at the end of that year. If he failed it, she wanted him evicted within at most two years, with compensation in the meantime. The Housing Authority took part as an intervening party.

The board appointed two architects as technical members to value the property, with instructions to ignore its development potential. Their unanimous report put the value at €310,000. The tenant filed his means-test documents on oath and testified, and at the last sitting the landlord's title was declared uncontested.

What the court held

The board declared the respondent the tenant under the Reletting of Urban Property (Regulation) Ordinance (Chapter 69 of the Laws of Malta). It found that he satisfied the means test under S.L. 16.11, citing regulations 5(7) and 6(6). Because the test had been carried out during the proceedings, it did not consider the second request further.

The board accepted the unanimous valuation, as article 23(3) of Chapter 69 provides. It noted that Act XXIV of 2021 followed many Constitutional Court judgments finding breaches of owners' fundamental rights, both for leases under Chapter 69 and for those under the Housing (Decontrol) Ordinance (Chapter 158).

The law leaves the board some discretion over the percentage. The board observed that the 2021 Act removed the list of factors the 2018 Act had told it to examine, so it may now weigh any factor it considers decisive.

Even so, the board held that the percentage should always be close to its maximum unless extreme circumstances are proved. In its words, "persentaġġ viċin il-massimu ta’ 2% għandha tkun ir-regola" (a percentage close to the 2% maximum should be the rule). No circumstance was proved that would justify a lower figure.

The board added that the point weighs more where owners have already obtained a declaration that their rights were breached. Setting a rent so low that it remained derisory, it said, could make the board itself a cause of the continuing breach.

It ordered the tenant to pay €6,200 a year, that is €516.66 a month, payable every two months in advance from the date of the judgment. It rejected the alternative request for eviction. Given the nature of the proceedings, each party was to bear its own costs, and the Housing Authority's costs were left untaxed.

Why it matters

For old residential leases, the board treats 2% of open-market value as the norm, not a ceiling to be bargained down. A tenant who passes the means test keeps the home, but a lower percentage needs proof of specific circumstances. Both sides should bring evidence on the percentage, not only on value and means.

Where it sits

Old protected leases under Chapter 69 and Chapter 158 continue by operation of law. After the constitutional judgments, Parliament gave landlords a review procedure under article 4A of Chapter 69 and article 12B of Chapter 158, tied to the means test under article 1622A of the Civil Code (Chapter 16). The board noted that the 2021 Act speaks of the "landlord" (sid il-kera), where the 2018 Act spoke of the "owner".

On the percentage, the board relied on the First Hall of the Civil Court in its constitutional jurisdiction (27 September 2024) and the Constitutional Court (26 October 2022). It also cited the Court of Appeal (Inferior Jurisdiction) of 26 June 2024 and 23 June 2021, where grievances on a similar point were rejected.

It further cited the same court's judgments of 13 March 2024 and 29 May 2024, the second of which changed the position taken in decisions of 7 July 2023 and 24 May 2023.

On development potential, it followed the Constitutional Court (18 November 2024), which held that potential is irrelevant when the property stays with its owners. It also cited the board's own decisions of 27 October 2023, 25 January 2024, 27 June 2024, 17 October 2024 and 18 October 2024.

Source

Rent Regulation Board, 275/2025, 11 February 2026.