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In a judgment decided on the 26th of June 2024 in the names Marcus Scicluna Marshall et vs Michael Borg Cardona, the Court of Appeal in its Inferior Jurisdiction confirmed that no appeal can be filed from the rate established by the Rent Regulation Board to increase the rent for leases predating the year 1995.

Act XXIV of 2021, which introduced amendments to the laws on protected residential leases, gave the right to lessors who are bound by lease agreements with respect to dwelling houses predating 1st June 1995 to request an increase in the rent payable that is calculated by the Rent Regulation Board, but which cannot exceed 2% per annum of the free and open market value of the property.

In the above-mentioned case, the Rent Regulation Board acceded to a request by the plaintiffs, as lessors, to have the rent paid by the lessee increased, and in so doing it applied the maximum rate allowed by law of 2% of the value of the property.

The defendant appealed the decision on the basis that, according to him, the Board should not have applied the maximum increase of 2% but a lesser one due to the personal circumstances of the defendant.

In their reply to the appeal, the plaintiffs raised a number of arguments. One of the arguments was that the defendant’s appeal was null and void because it was not based on any of the grounds of appeal allowed by law from a decision of the Rent Regulation Board.

The plaintiffs argued that Article 24 (1) of the Reletting of Urban Property (Regulation) Ordinance (Chapter 69 of the Laws of Malta) states that no appeal shall lie from the decision of the Board except – (a) in the case of applications under the provisions of article 8 (which refers to a request to resume possession of the property when the lease is terminated); and (b) in other cases, on a point of law determined by the Rent Regulation Board.

It was also argued by the plaintiffs that the decision of the Rent Regulation Board to apply the rate of 2% rather than a lower percentage in the calculation of the increase in the rent payable is at the total discretion of the Rent Regulation Board and does not fall within any of the grounds of appeal in Article 24(1) mentioned above.

The Court of Appeal agreed with the plaintiffs’ argument and declared that an appeal from a decision on the rate of increase in rent established by the Rent Regulation Board is null and void. Consequently, the Rent Regulation Board abstained from taking further cognisance of the case.

This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Stephen Muscat or Dr. Louise Sant Fournier.

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