The Residential Leases Bill has entered the Committee phase of the legislative process after having passed the first two readings in Parliament throughout the months of June and July 2019. The Bill seeks to promote and develop the private rented sector by guaranteeing standards of fairness, clarity and predictability in contractual relations between lessors and lessees whilst protecting the right to adequate accommodation. The Bill introduces the distinction between “long” leases as opposed to “short” private residential lease, whereby the former shall be for a duration of not less than one (1) year, whilst the latter shall be for a duration of not more than six (6) months and subject to the fulfilment of four (4) specific requirements for its applicability. The Bill also introduces the concept of “room rental” wherein the renting of part of or a room within a property shall be permissible and duly regulated by the Act following its promulgation. It is to be noted that the Bill shall not apply to leases falling outside the scope of primary residence, government leases, tenements leased before the 01 June 1995 and leases which have been or are about to be converted from emphytheutical grants by operation of the law.
Furthermore, the Bill stipulates that lease agreements shall be registered, upon pain of nullity, with the Housing Authority, whilst adding clauses on the requirement of security deposits and inventories to the list of essential obligations in a lease agreement (as laid down in Article 1531A of the Civil Code) and codifies an exhaustive list of seven (7) conditions which shall be deemed ineffectual if present in a residential lease agreement. Although the Bill does not restrict or control initial rent prices, it does however stipulate that annual rent increases may not exceed five per cent (5%) over the previous rent amount. The Adjudicating Panel for Private Residential Leases shall be introduced following the promulgation of the Act in order to decide claims emanating from private residential leases which do not exceed five thousand euro (€ 5,000) and finally the Housing Authority shall be the Public entity tasked with the monitoring and enforcement of the provision of the Bill.
For further information, kindly consult our full dossier on the Residential Leases Bill here.