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Landlords will still retain inspection rights in Housing Authority rental scheme
Housing Authority says landlords can hold authority to account over breach of lease agreements.
21 December 2011, 12:00am
Matthew Vella
Matthew Vella
2 min read
The authority already operates a rental subsidy scheme for people to rent property directly from private landlords and apply for a subsidy on their monthly rent payments.
The Housing Authority said property owners will retain the right to inspect their properties and will be entitled to hold the authority to account for breaches of lease agreements, after the Malta Developers Association raised objections over a rental scheme for landlords to rent their premises to the authority, which then subleases it to tenants at subsidised rates.
According to the MDA, instead of allowing for a free rental market with tenants dealing directly with owners and then registering the lease when applying for subsidy, the scheme forces owners to lease their property to the Housing Authority, which in turn sub-leases to the tenants.
But the HA said it will be enforcing the strict observance of rental agreements to ensure its
tenants fulfil their obligations, respect their neighbours, and keep the properties well maintained.
"Non-compliant tenants risk immediate termination of their contracts," the HA said in a statement.
An information campaign is to take place in January 2012 to explain the benefits property owners interested in renting their vacant apartments to the Authority will enjoy, including a highly attractive 5% withholding tax rate, and a stable and assured income for a minimum of ten years.
The authority already operates a rental subsidy scheme for people to rent property directly from private landlords and apply for a subsidy on their monthly rent payments. 1,200 households benefit from the scheme, valued at a cost of over €1 million annually.
In the recent budget, government introduced a reduced withholding tax rate of only 10% to landlords letting their property to beneficiaries of this scheme.
Following the property market slowdown and the resultant rise in the number of vacant residential units, the HA decided to tap into the private property market to rent the properties to its clients.
But the MDA said that landlords will not rent their properties without knowing who their tenants are. "This is in fact a major obstacle for the success of the scheme," the MDA said in a statement. "Owners would normally seek to know who the prospective tenants are before they enter into a rental agreement and should not be obliged to accept anyone who obtains a sub-lease from the Housing Authority."
Matthew Vella, a freelance journalist at MaltaToday, was formerly executive editor at Malt...
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There are too many if's and buts to this scheme, the MDA is right to object on this matter. Many people have been badly bitten by the 1939 Rent Laws and will not bitten twice. Yes there has to be a compromise, otherwise you'll find that many landlords would easily opt out and cancel agreements without a fair reason. So one has to be transparent, and this works both ways. If the Government is to be totally responsible including any damages caused by the tenant, then fair enough. With insurance, and a guarantee then I might be inclined to close one eye, but this is not in the scheme. Unless the guarantee is binding, many won't be so impressed by this half baked Scheme.
