Selling Co-Owned Property under Article 495A

In Malta, it is common for property to be owned jointly by several persons, particularly following an inheritance. This can create practical difficulties — especially where some co-owners wish to sell, but others refuse, delay, or simply cannot be traced.

In such cases, Article 495A of the Civil Code provides a solution.

This provision allows the court to authorise the sale of co-owned property even where not all co-owners agree, provided the legal requirements are satisfied and the dissenting co-owners are not seriously prejudiced.

In simple terms, if the majority of co-owners wish to sell, but the minority refuses or does not appear for one reason or another, the majority may file an application before the First Hall of the Civil Court asking the court to authorise the sale. The majority is assessed by reference to the value of the shares held by each co-owner, not simply by headcount.

If the court is satisfied that the legal requirements have been met, it may authorise the sale in accordance with the wish of the majority.

The main legal requirements for using Article 495A are that:

• The property has been co-owned for more than three years;

• There are no ongoing proceedings for the partition of the property;

• The case is submitted by the majority in value of the shares;

• The sale will not seriously prejudice the minority.

The key safeguard in Article 495A is that the court must be satisfied that the minority owners are not seriously prejudiced by the sale. This assessment is normally limited to assessing whether the sale price is fair. Proceedings under Article 495A therefore tend to require a valuation of the property to justify the proposed sale price. However, apart from the value, the court may consider any other factors that may prejudice the minority, including any prejudicial terms and conditions of the proposed sale.

In practice, the proposed sale is often linked to a promise of sale agreement (konvenju) with a prospective buyer. This promise of sale would be entered into by the majority of co-owners, and would be subject to obtaining court authorisation for the sale of the property as a whole.

Article 495A is particularly useful in Malta because many properties remain tied up in long-standing co-ownership. This remedy allows co-owners to sell their property and terminate the state of co-ownership, in situations where the minority co-owners do not want to sell or where they are unknown or cannot be traced.

Dr Douglas Aquilina

douglas@amaadvocates.com

Protected Residential Leases in Malta – The 2021 Reforms in Practice

Protected residential leases in Malta, commonly referred to as pre-1995 leases, refer to residential leases that came into force before 1^st June 1995 and which still enjoy statutory protection today. Although frequently grouped together, they fall into two distinct legal categories.

The first category consists of leases that were leases from the very beginning. These fall under Chapter 69 of the Laws of Malta.

The second category relates to those leases regulated by Chapter 158 of the Laws of Malta. This principally regulates properties that were granted by temporary emphyteusis for a specific period (known in Maltese as cens temporanju) which, upon expiry, were converted into leases by operation of law. Following legislative changes introduced in 1979, upon expiry of certain temporary emphyteusis concessions, the occupant had the right to remain in the property under a protected lease. Chapter 158 also regulates leases of decontrolled properties.

The distinction between Chapter 69 and Chapter 158 is not merely academic. The applicable law differs depending on the category, and this can significantly affect the outcome of the court case. 

Despite their different origins, both categories share the same defining characteristic: protected lease. For many years, a landlord could not refuse to renew the lease upon its expiry, and the lease could be inherited. Nor could the landlord increase the rent or impose new conditions at his own will.

In 2021, the legislator introduced amendments under Act XXIV of 2021 to reform protected leases. These amendments introduced remedies and reforms that similarly affected leases under Chapter 69 and those under Chapter 158.

In virtue of these reforms, a landlord may file proceedings before the Rent Regulation Board to either:

-       Request an increase in rent; or

-       Seek termination of the lease

The remedy given by the Board depends on the outcome of the means test applied to the tenant. The means test examines the tenant’s income and capital, and determines whether the tenant exceeds certain financial thresholds established in the law. The financial thresholds vary primarily according to the tenant’s age. The older the tenant, the higher the financial threshold.

If the tenant’s income and capital fall within the legal threshold, the tenant will satisfy the means test. The Rent Regulation Board will then increase the rent up to a maximum of 2% of the property’s free market value as at 1 January of the year in which the application (rikors) is filed. The value of the property is established by two architects appointed by the Board. Typically, the architects are instructed to value the property as it stands without factoring in redevelopment potential, airspace, or speculative building capacity.

If the tenant exceeds the statutory income or capital thresholds, protection will be lifted. Therefore, if the tenant exceeds the income threshold but not the capital threshold he may still be evicted as these are not cumulative. In such cases, the Board will order eviction of the tenant, usually granting a two-year period for the property to be vacated. During this transitional period, the tenant will need to continue paying compensation for this continued occupation, similar to a rent. The Board will set the compensation that will be payable by the tenant. While the law does not bind the Board to the 2% limit in these situations, judgements to date are often given in this sense when determining the payable compensation for the said period.

In rent increase cases before the Rent Regulation Board, the Housing Authority has the right to participate in the case. The reason is that the Housing Authority currently has a scheme to subsidise a portion of rent exceeding the original protected rent, up to the capped amount of EUR 10,000. By way of an example: if a protected tenant was paying 280 euro annually and the Board increases the rent to 8,000 euro per year, the tenant remains responsible for the payment of the original rent (subject to statutory increases under the previous law), while the Housing Authority would subsidise the difference, provided that the tenant qualifies for the subsidy.

Another significant reform introduced in Act XXIV of 2021 regards the continuation of the lease following the death of the tenant. Prior to the amendments of 2021, in general the lease could be inherited by family members who qualified according to the law, who would then continue to enjoy a protected lease for their own lifetime. The law no longer grants this protection and right of succession in the lease. The new law provides that upon the death of the tenant, if a person qualifies according to law and does not exceed the means test, then they will only be entitled to occupy the property for a further five years, and they will not be entitled to continue to lease the property for their lifetime.

If you are a landlord considering filing an application before the Rent Regulation Board, or a tenant faced with a rent increase or eviction proceedings, you may contact us for clear and tailored advice to your situation.

Dr Samira Briffa

samirabriffa@amaadvocates.com

Opening Windows: When is it Legal?

The opening of new windows in a party-wall (‘hajt diviżorju’) is a frequent cause of neighbourly disputes, particularly when it comes to the redevelopment of overlying properties. Under Maltese law, a person cannot open a window in the party-wall, being the wall that separates two adjoining properties, unless he enjoys a right over the neighbouring property (which is known as a servitude / servitù). In the absence of such a servitude, the opening must be receded to a distance of not less than seventy-six centimetres (76 cm) from the party-wall and this in accordance to Article 443 of the Maltese Civil Code (Chapter 16 of the Laws of Malta).

What classifies as a ‘window’ under Maltese law?

The law does not define what constitutes a window, yet court decisions have shed some light on this. Fixed apertures, for instance, have been classified as windows even when placed above eye level. In contrast, small openings designed solely for ventilation, commonly referred to as air vents or “rewwieha,” are not classified as windows and do not create a servitude. In determining the nature of an opening, courts assess its purpose, size and position.

Where and When the Distance Applies

Unless one enjoys a servitude, the 76 cm legal distance must be respected at all times, regardless of the level of the tenements or whether they are side by side or overlying each other such as maisonettes. Even parapet walls are treated as extensions of dividing walls. Maltese case law is clear that Article 443 of Chapter 16 applies equally to maisonettes, apartments and traditional dwellings.

Courts have also confirmed that this distance applies independently of whether actual overlooking occurs. Although some judgements have allowed apertures at a smaller distance where there was no overlooking, more recent decisions of the Court of Appeal have reverted to a strict interpretation.

Exceptions

Exceptions to the 76 cm distance in the absence of a servitude do exist, but they are limited and must be clearly established. These include obtaining your neighbour’s consent or else prescription. Consent to open windows within the 76 cm legal distance must be granted through a public deed signed between the owners of the neighbouring tenements. To acquire the servitude through prescription, the window has to have existed openly, peacefully and uninterruptedly for thirty (30) years.

The concept of good neighbourliness, commonly known as buon vicinato does not amount to a renunciation of rights or consent. Even decades of tolerance do not necessarily extinguish a neighbour’s right to challenge an unlawfully opened window.

Redevelopment and Existing Servitudes

Where a window legally exists and the property is demolished and rebuilt, the servitude remains intact, but the new window must remain in the same position and of the same size. Opening additional windows would generally be considered an aggravation of the servitude already enjoyed and would therefore be unlawful unless authorised by contract.

Planning Permits and Third-Party Rights

It is important to keep in mind that a planning permit issued by the planning authority does not override this 76 cm rule. Even if a permit is issued to open windows in the party-wall or within 76 cm of the party-wall, this does not automatically mean that those windows comply with civil law. This means that a property owner may hold a valid planning permit to open new windows, and still face legal action from neighbours seeking to protect their rights by opposing the opening of those new windows.

Therefore, it is of utmost importance to understand one’s obligations under Article 443 of Chapter 16 and to act promptly if the required legal distance of 76 cm is not respected.

Dr Samira Briffa