Looking back from today’s perspective, over forty years after the Housing (Decontrol) Ordinance of 1979, it is evident that what was presented as a law to “decontrol” property did not achieve what it claimed. Instead of restoring owners’ rights to recover their property, it entrenched state control and tenant protection indefinitely. To understand how this came about, it is necessary to consider how the system had evolved since the 1950s.
In the aftermath of World War II, Malta faced a severe housing shortage. In response, the government introduced a series of laws designed to protect tenants from eviction and to keep rents low. The Reletting of Urban Property (Regulation) Ordinance (Chapter 69 of the Laws of Malta) became one of the key instruments of this system. It froze rents at very low levels and gave tenants the right to remain in the property for life. Although originally introduced as a temporary solution to a post-war emergency, these controls became permanent and left landlords unable to recover possession or adjust rents to reflect rising costs and inflation.
Faced with this situation, the government introduced a “system of decontrol” in the 1950s, supposedly giving owners a way to recover their property. Under this system, owners could apply to the Director of Housing to “decontrol” their property and release it from the restrictions imposed by rent control laws. However, this was not a right but a discretionary process. The Director of Housing, advised by the government land surveyor (perit tal-Gvern), would decide on a case-by-case basis. The land surveyor would inspect the property and assess its condition, whether it was still fit for habitation, and whether there was still a need to protect the tenant. In practice, applications for decontrol were rarely granted. The housing shortage was used as a reason to refuse most applications, and even when the property was in a poor state, landlords were still expected to accept the tenant’s continued occupation at a controlled rent.
It was in this context that many owners began turning to temporary emphyteusis as an alternative to leases. Since emphyteusis was not subject to the rent control system, owners could grant property for a fixed term — often 17, 21, or 99 years — and expect that at the end of that period, the property would return to them. This gave owners a way to retain long-term control over their property and avoid being permanently tied to tenants they could not remove. Temporary emphyteusis became a widely used tool by owners seeking to protect their rights and to avoid the problems associated with ordinary leases.
However, the hopes that emphyteusis would protect owners’ interests were destroyed in 1979. The Housing (Decontrol) Ordinance was introduced under the impression that it would free up property from control. But what it actually did was to convert all temporary emphyteusis granted before 21 June 1979 into leases in favour of the person who held the emphyteusis, or their heirs, once the contract expired. These new leases were fully protected by rent control, with rents fixed by law and the tenant given indefinite rights of occupation. Owners, who had counted on recovering their property at the end of the emphyteutical period, found themselves permanently deprived of both possession and control.
Seen from today, what started as emergency tenant protection laws became, through the 1979 reform, a permanent transfer of property rights to tenants without compensation. The system of decontrol that had been presented in the 1950s as a possible solution was, in reality, a false hope. The result was a situation where owners lost both their right to possession and to market rents, and tenants were allowed to remain indefinitely in occupation.
Forty five years later, many of these properties are still occupied.
