When landlord offers tenant alternative accommodation, this has to be done in good faith

The Court of Appeal overturned the Rent Regulation Board decision, which allowed the tenant to vacate the premises, once the landlord offered an alternative accommodation. This was done because the Court of Appeal was not convinced that the switch was in the best interest of both parties. This was held in a judgement delivered by Mr Justice Anthony Ellul on 4 May 2018 in Carmelo Gatt, Carmel Gatt, Joseph Gatt, Paul Gatt and Antoine Gatt -v- Michael Bugeja.

This judgement concerned an appeal from a Rent Regulation Board judgement, lodged by Bugeja, which allowed the Gatt family to take back possession of a property, which was rented to him. The original rent was Lm4 per annum and the Gatt family asked for the property back because they needed it and they were offering Bugeja a suitable alternative accommodation in the same area.

Bugeja had defended that action by explaining that he is a farmer and he works the land surrounding the rented property and therefore it was essential not only as a residence, but also for his work. He insisted that the alternative accommodation was not suitable for him and his children.

The Rent Regulation Board (RRB) argued that the Gatts had provided an alternative accommodation to Bugeja. The lease had originally been given to Bugeja’s father and Bugeja claimed that he had always lived there; producing evidence of this. There was also no evidence that the property had been poorly maintenance. The RRB held that the alternative accommodation offered was larger in size and needed little maintenance. The Board upheld the Gatts’ requests to take over the rented property.

Bugeja appealed the decision on the grounds that it is not true that the Gatts need the property because they have their own property, both personal and commercial, and therefore they cannot make use of Art 145 of the Civil Code. Furthermore, the property is used as Bugeja’s residence and also as a farmhouse. The Gatts want to demolish the property to build flats. The alternative accommodation does not fulfil the defendant’s needs, since in reality the property is a casa bottega.

The Court of Appeal in its judgement held that it is important to see what the property was used for when the rent was given in original and how it is used today. Karmenu Bugeja, the defendant’s father, had receipts between 1951 and 1959 without any description of the use of the property. However, in Angelo Fenech v Peter Muscat Scerri, decided 21 March 1997, it was held that a receipt is a proof of payment and the use of the property has to be derived from the agreement between the parties. Since Bugeja alleged that the premises is also used for agricultural use, he would have to prove this. He had testified that the land was a mile away from the premises and he worked as an impressed driver with the government, allowing him time to work the land. In the premises he breeds sheep and chicken and at a time he had horses which he used to work the land. He admitted that today there are no animals, but he lives with his son on the premises. Part of it is to store his produce and agricultural equipment. This was corroborated by a neighbour. The Court considered that this testimony was credible.

Article 9(a) of the Reletting of Urban Property (Regulation) Ordinance allows the owner to take back the property for his own requirements and this must be in good faith. Furthermore, it must not be a wish but a necessity and an actual need for the owner or other family members to live in said property. On the other hand the owner does not need to prove absolute necessity.

The Court of Appeal pointed out that Carmel Gatt testified and explained that he has three children and his siblings also have children, totalling nine children in all. The proposed development catered for five apartments. The owner failed to prove that he is in possession of a PA permit, which would allow the development.

Mr Justice Ellul upheld the appeal by overturning the RRB’s decision.