The extension of temporary emphyteusis of commercial premises. Government issues new law
News    ·   01-10-2020
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AUTHOR: Marisa Vella; Kristina Rapa Manche; Thomas Camilleri

A newly announced legal notice will allow those in possession of a temporary emphyteusis on a commercial premises expiring after the 31st of August, to renew their concession for an extended term.

 

Introduction

On the 15th of September 2020, Legal Notice 369 of 2020 came into force, empowered by the Government Lands Act ( the “Act”) which gives authority to the Minister for Transport, Infrastructure and Capital Projects to issue regulations.

The Extension of Temporary Emphyteusis in a Contract for a Commercial Premises Transferred from the Government, the Lands Authority or Ecclesiastical Entities by Title of Emphyteusis Regulations authorises any natural or legal person who holds a temporary emphyteusis on a property transferred from either the government, the lands authority or an ecclesiastical entity being used solely for commercial purposes and when the term of such grant terminates after the 31st of August 2025, to request the Lands Authority (the “Authority”) to terminate such contract and grant a new one. The Authority has absolute discretion to refuse and reject any application made. In the event that the Authority accepts the application put forward, the new emphyteutical contract will follow the same term as the preceding contract and will start to run from the date the new contract is given, provided, however, that where the term of the concession in force at the point in time the application is made is more than 65 years, the new concession can only be granted for a maximum term of 65 years.

Procedure

For the applicant to be eligible for such extension, he/she must firstly be recognized by the Authority as the emphyteuta of the land or building and the subject of the concession must not involve any execution of works, supply of goods or supply of services which, prior to the applicant’s concession, were in the hands of the state. The emphyteuta must also prove that there are no outstanding payments due to the Authority for ground rent on the property.

A detailed business plan must be drafted and presented to the Authority to substantiate the request for extension. This must contain a description of the project, its product or services, the commercial market and the project’s objectives, its viability and its potential together with an overview of its funding requirements.

Together with the application, the applicant must also submit copies of the original contract, the identity card of the applicant/s, last ground rent receipt, and where the applicant was not recognized by the Authority as emphyteuta of the property, the applicant must provide to the Authority a copy of all the contracts concluded since the time when the last emphyteuta was recognized by the Authority.. Detailed Plans and photos of the property certified by an architect must also be submitted to the Authority. Every applicant must also submit a sworn application to the Authority declare the veracity of the entire contents of the application and that no information or other relevant facts have been omitted by him, which had they been known to the Authority would have resulted in the application being denied.

Once these are reviewed, the Authority appoints architects to value the concession of the new contract. This valuation will take into consideration the original value, the period remaining for the original concession to expire, the market value of similar properties, together with any market indicators which may influence the price. The condition of the property and any development potentials will also be considered. Following this evaluation and the Authorities’ acceptance of the new contract, the applicant must pay the full value indicated, together with the application fee which amounts to one-thousand euros (€1,000) or any other sum which the Authority publishes in the Gazette. Any new contract of emphyteusis granted by Government following the approval of an application is then drawn up by public deed.

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