Setting Standards in the Real Estate industry

On Thursday December 14th. the Malta Business Weekly interviewed Mr. Douglas Salt, President of the Federation of Estate Agents (Malta). Below is the introduction; the full interview can be read here.

The Federation of Estate Agents has come a long way since its foundation a year ago. David Lindsay speaks to its president DOUGLAS SALT about, among other issues, the FEA’s initiatives aimed at continued training for the market’s players, differentiating between ethical agents and the cowboys, the effect of last year’s capital gains amendments and the health of the property market as it stands today.

Set up with the multiple aims of ensuring real estate business is conducted ethically, to generally raise the standard of the industry in Malta, to work the authorities concerned and to provide for continued professional training for players in the industry, the Federation of Estate Agents (FEA) has come a long way since its inception a little over a year ago, FEA president Douglas Salt explains.With 45 plus members, the Federation comprises all Malta’s major real estate players and was established...........”

Creating and Sustaining a Rental market

By Ian Casolani - PRO of the Federation of Estate Agents

The continued increase in property prices, the unfortunate growing number of separated couples, the substantial number of new properties and large developments coming on the market, all highlight the need for a healthy rental market. This is now needed more than ever before, both to provide alternative accommodation for those who cannot afford to buy their first property, and for the vendor to satisfy the objective of those buying property for investment purposes or rental return.

To date, this market is governed by outdated and inadequate licensing policies and tax structures. Properties rented out on a long let basis for some reason still fall under the same tourism authority licensing guidelines for holiday premises, and the landlord is expected to pay an exorbitant licence fee equal to one month’s rent. This applies to rentals to foreigners and is subject to various conditions, including how long the tenant has been residing in Malta. Apart from this fee, the landlord is also expected to pay VAT and is required to declare any rental income on his/her tax return, which in most cases attracts the 35 per cent income tax level that most people owning rental properties fall under. After deducting all these fees and taxes from the already low rental returns which the market offers, a property owner is left with a miserable return on investment of between 1.5 to 2.5 per cent.

Recently, rumours of tax compliance have been creating many uncertainties in the market. Although it is evident that the market needs to be regulated, and the policies that govern it need to be updated, the way this is done is crucial to the future of the rental market in general.

There are various important issues that we have been trying to bring to the attention of both the Ministry of Finance and the Tourism Authorities.

Firstly, it is time for the government to come out with a clear and final policy on the rent laws when renting to Maltese citizens. The fact that most landlords still fear renting to Maltese only makes it more difficult for those opting to rent a property instead of buying one. Roughly, two out of every three landlords still refuse to rent to Maltese although they have been reassured that today the old rent laws do not apply to new rentals.

Secondly, it is time to disassociate the standard tourism authority policies with long lets. When a long-term rental is concluded, it means that an agreement has been reached between the landlord and the tenants and both parties are probably happy with this agreement. Therefore, no third party should have the right to dictate how equipped this property should be, whether it is air-conditioned or not, or how modern the furnishings are, as this is most probably reflected in the price one pays for what he gets. Therefore, although we agree and insist on the tourism authority regulating and controlling the licensing of holiday properties, we think that its involvement in the licensing of long let properties is both a costly exercise and no longer appropriate.

We also propose a revised and more straightforward tax structure, which besides being easier and cheaper for the government to control will, more importantly, enable a landlord to know exactly where he/she stands and what he/she is netting from his/her rental. This can be done by simply replacing any MTA fees with an annual nominal licence fee depending on the number of bedrooms or the size of the property. Furthermore, a final withholding tax on any rental returns of say 10 to 12 per cent should replace the current income tax requirements, therefore a landlord will know that for every Lm100 of rental income he receives, he has to immediately deduct say Lm10 to Lm12 in withholding tax. Although the government’s first reaction will probably be that this is a big reduction from the average 35 per cent tax, due together with the annual tax returns, some basic calculations will show that a structure based on these proposals are likely to bring in tax revenue on property rentals that would be substantially higher than the present partial revenues declared by a few individuals.

HSBC has also recently come out with a ‘Buy to Let’ scheme enticing investors to invest in property for rental purposes. This scheme, which is very big in all other leading destinations, is also helping to change the outdated systems and mentality. Previously, one would be discreet about renting out his property because it went against his home loan conditions. This new scheme however encourages people to take out a loan and finance it through rentals.

Let us not drag on with these issues until we will eventually destroy this potential market and its substantial input to our economy. Or worse still, let us not, as has been the case in many other sectors, go from one extreme of laissez-faire to another of extreme and immediate taxation, which will do nothing more than scare everyone into selling their investments and creating a panic in the market.

Development Zones Extensions Approved

The House of Representatives yesterday voted 33-28 in favour of a government motion that will extend the building development zones. MPs voted along party lines, despite a free vote having been granted by the opposition to its members.

The vote was taken following some heated exchanges between the government and the opposition after Opposition Leader Alfred Sant said there were reports that many thousands of liri had been paid by some land owners for their properties in Mosta to be included in the development zones and that there were reports among contractors that Environment Minister George Pullicino and his collaborators had travelled briefly to Sicily where the plans of the development zones were finalised.

Mr Pullicino challenged Dr Sant to repeat his claims outside the House for legal action to be taken. He said he had travelled to Sicily for a day with his policy coordinator and friend following the death of his mother, but the finalisation of the plans had nothing to do with the trip.

Prime Minister Lawrence Gonzi said Dr Sant's "unsubstantiated mud-slinging" was deeply hurtful to people who had worked hard to ensure that this process was fair for everyone.

In his speech Dr Sant said that as soon as the proposed extensions to the development zones were announced, he had declared that this constituted a web of corruption. He would now add that this was a web of institutional corruption.

Read the full article on The Times of Malta Thursday July 27th. 2006 by clicking here.

Euro Adoption - Fears of property prices spike as new funds surface

Very interesting article on the Business Times 11th. May 2006 by Massimo Farrugia entitled as above. The first few articles are below:

"A surge of undeclared funds that would surface as Malta adopts the euro is likely to be laundered into the property market or leave the country, Vince Farrugia, director general of the GRTU - the Chamber of Small and Medium Enterprises has warned.

There could be a spike in property prices as banknotes hidden beneath mattresses saw the light of day in the run up to euro day, he said."

The easiest way will be for people to invest their cash in property so that they may get their return in euros. Since Malta has a record amount of cash in circulation per capita, this will create an artificial demand for property, pushing up prices and making it even more prohibitive for business start-ups and those enterprises wanting to expand their premises to buy property," he said.

He said schemes encouraging undeclared money to come upstream would limit speculation and prevent it from leaving the country......"

Read the rest of the article here.

New Land for Building O.D.Z.

www.maltastar.com which is affiliated with the Malta Labour Party (in the opposition) published this article, today 10th. May 2006 under the above title. The article can be read in full here and the opening paragraphs are below.

"In a controversial move, the government has decided to extend building permits to schemes lying outside the development zones that are currently available. According to data published in its annual reports by the Malta Environment and Planning Authority (MEPA), the supply of land available for development under current arrangements is enough to service demand for the next twenty years or so.

Minister issues definite instructions

All MEPA policies have emphasised the need not to open up further land for building development. Government’s decision has not been welcomed by MEPA’s top guns or some of them. According to sources, Minister George Pullicino has written in strong terms, definite instructions to the MEPA board to enforce government’s decision.
A “consultation” document will be published about this decision to follow procedures laid out for such drastic changes in the rules governing building zones. However, according to a MEPA insider, the “consultation” will be a “farce”. Local plans have been thirteen years in the making and are still not yet finalised....."

Property Maintenance

On today's Times of Malta 10th. May 2006, veteran realtor Frank Salt weighs in on the lack of property maintenance procedures in maltese apartment blocks. The article under the heading "Deteriorating in front of our eyes" can be read in full here (will be archived by the newspaper in a month from today), and an excerpt from the article follows below.

"Maintaining a block of apartments is not like maintaining your own house as there are others to consult and consider, and each individual owner has to pay their fair share. At present, the normal annual maintenance fee for even a good quality block of apartments is usually quite low, never taking into consideration the eventual need to spend large amounts of money on structural maintenance.
In places like London, there are rules imposed by local councils, that blocks of apartments and houses have to be painted and maintained on the outside and the inside every so many years. This is why in the better areas the properties are always looking smart and well presented and, therefore, maintain and even increase their market value."

Maltese Houses of Character

An article written by Edwin P. Borg and giving very precise descriptions as to the general characteristics of the original maltese dwellings, their interiors and layouts, as recollected from his childhood days. It also covers a lot of the original maltese terms for certain features, with their english translation. Following are the opening paragraphs:

Maltese Houses of Character

A good number of houses that I knew during my childhood have today disappeared. This happened for various reasons such as demolition to make way for bigger projects; alterations to serve different purposes other than those for which they were built, etc. Those that survived, however, are finally beginning to be appreciated and are now being referred to as 'Maltese Houses of Character'.

Most of these houses are now also being restored or refurbished in a way that the alterations being carried out are compatible with the original plan. I therefore would like to make some references to some of the most common features which gave these houses their true identity as a house of character. So let me go back to my childhood days. And the first thing that comes to memory is the general view from outside, the house façade.........

The full article can be read by clicking here.

Requests for information from Mepa

Audit notes shortcomings

On today's Times of Malta front page, we find an article by journalist Mark Micallef with the above title.

The first four paragraphs read:

"Mepa officials admitted to an internal audit they were unaware that the Aarhus convention, giving citizens greater access to information, had been transposed to Maltese law a year ago.

The issue was raised after Qui-Si-Sana residents complained with the Malta Environment and Planning Authority's audit office that the authority had refused to say officially why it had opted not to carry out an Environmental Impact Assessment on the proposed car park complex.

The case officer responsible for the project and the Major Projects Unit manager said they were not aware Malta was party to the Aarhus convention, which gives citizens the right to such information.

The audit report notes that Legal Notice 116/2005 transposed the Aarhus Convention into Maltese law and has been in force since May 17 last year, as established by Legal Notice 139/2005........."

The full article can be read here for the following month, following which it will be archived by the same newspaper.

Also read the Directive 2003/4/EC of the European Parliament and of the Council of January 28th 2003, on public access to environmental information and repealing Council Directive 90/313/EEC .

HSBC Malta to start offering Buy-to-Let Loans

HSBC Malta for the first time ever is introducing Buy-To-Let Loans on the maltese islands. The official launch for this product is on 2nd. May 2006, and more information for both locals and foreigners is available from their customer service number +356-23802380.

For online enquiries visit their website by clicking here and for more information vis-a'-vis the letting market and the letting value of a property here in Malta, you can contact me by clicking here.

The Lament of the Maltese Townhouse

The Malta Independent on Sunday printed an Opinion piece by Marisa Micallef, (Chairman Housing Authority) under the title "Ode to a dying Abode".

The Lament of the Maltese Townhouse


"I am baffled, confused, hurt.After all, I’m a good-looking townhouse, double-fronted (although that works against you these days because apparently I’m more suitable for redevelopment into flats that way), built and brought up in a well-located street in Sliema.

My stonework is now a bit grimy, my blue shutters faded and sunburnt and windswept to a nondescript grey. And I even once boasted a smart gallarija and pretty carvings too.So why on earth are these grey, badly dressed, pot-bellied guys putting some white, plastic-covered note on my side to say I’m going to be pulled down and replaced with more ugly flats? That’s all I can see around me anyway – ugly flats.

Why am I not worth keeping, I wonder? Why am I not loved anymore?I remember being carefully and lovingly built by hand by craftsmen that make today’s contractors look like cowboys........"

The full article can be read by clicking here.

Exemplary Apartment Blocks in the Sliema Area

New Apartment Blocks in the Sliema area - The Latest Maltese Architecture melding in with the old.

Thanks to Dr.George Debono from FAA (Flimkien ghal Ambjent Ahjar) who emailed me these photos to new apartment blocks that caught his eye in the Sliema area, and which have been built to high standards, and meld in well with the rest of the enviroment. FAA are an enviromental pressure group and their website can be found at www.ambjentahjar.org

Portomaso acquire full ownership of land for Lm800,000

Last Sunday's Maltatoday newspaper broke the news re Spinola Development's negotiation and settlement on the temporary ground rent at Portomaso, which has now been redeemed with full ownership gained by the same company. The full article can be read here.

Excerpts from the same article dated 16th. April 2006 on Maltatoday

"The company is now asking the owners of its 150 or so apartments whether they are interested in redeeming their temporary leases ahead of 2114. No price has yet been set by the company. A spokesperson for the Prime Minister confirmed that with 109 years left until the expiration of the emphyteusis, the amount that would have to be paid for the transfer of the land would have been Lm109,000.

Maurice Tabone, sales and marketing director, said the company wanted to consolidate its asset base: “The law might change so it made sense that we buy it, even since a tender was issued and someone else might bid for it. It was in our interest to redeem the emphyteusis.” ......."

"........“We sent clients a letter informing them we had purchased the freehold, and that ground rent was payable to Spinola Development, and proposed that in the near future whoever was interested could redeem the emphyteusis,” Tabone said.

Owners of the apartments whose prices range from Lm80,000 to over Lm320,000, currently pay a ground rent of Lm1 every year – it would cost Lm180 in 2114 for the transfer of absolute ownership to the dwellers.Several have written back to the company saying they are interested in becoming full owners of their apartments, but are asking to know the price beforehand.
“We haven’t set the formula yet… Naturally, one would have to be reasonable about it,” Tabone said.
Residents forming part of the Portomaso Apartments Residents Committee (PARC) have said they had repeatedly written to the government enquiring whether they could redeem the temporary lease but there was never any acknowledgment from the government.A call for tender was published on 16 August 2005 in the government gazette."

Malta is "impotent" with big developers

Front page article with the above heading on the Times of Malta 11th. April 2006. The report commissioned by the Enviroment minister 2 months ago is finally out, and holds the Malta Enviroment and Planning Authority indirectly responsible.

The Malta Independent chose to break the news in a small article within the paper, and no visibility on the newspaper's website.

The Times of Malta article, which is on the front page and continues for nearly a full page inside, with photos, can be read online here (for the next month before archiving).

The opening paragraphs by reporter Mark Micallef are:

"Developers Polidano Brothers were left to do as they pleased at their Xemxija site prior to January's mudslide, the inquiry report into the incident has concluded, adding that the planning authority is "impotent" when it comes to controlling big developers.

In frank language, the report, commissioned by Environment Minister George Pullicino some two months ago, notes that the Malta Environment and Planning Authority is indirectly responsible for what happened on the site.

The inquiry was ordered after The Times reported that excavations taking place at the site adjacent to the St Paul's Bay bypass had caused a mudslide which left part of a building sticking out dangerously in mid-air. "

Federation of Estate Agents (Malta) - Official Launch

On Monday 10th. April 2006 the FEA (Malta) is holding its official launch at the Portomaso Suite, Hilton. The event commences at 19.00 and the press together with officials from various goverment departments and authorities, and all the member estate agents have been invited.

It is anticipated that speeches will be given by the President of FEA Mr.Douglas Salt, Chief Executive HSBC Mr.Shaun Wallis, and Parliamentary Secretary Finance Department Hon. Tonio Fenech.

The event is being sponsored by HSBC Malta.
The main objectives of the Federation are outlined on its website at www.feamalta.org

Update: 10th. April 2006 12:30
Hon. Tonio Fenech called in today, the day of the event, to inform FEA he won't be attending. It seems no goverment officials will be addressing the launch since the cancellation was last minute.
Meanwhile Mrs. Sally Robson, the new Chief Operating Officer HSBC Malta, will be delivering the speech instead of Mr. Shaun Wallis.

Action group formed to prevent further destruction of urban, rural heritage

Today's Malta Independent on Sunday 9th. April 2006 carried an article about the launch of a new pressure group. the opening lines are below, and the full article can be read by clicking here.


"Aiming to raise public awareness over what it describes as “the ongoing systematic destruction of our urban and rural heritage”, a non-political pressure group, Flimkien ghal Ambjent Ahjar (Together for a Better Environment) was formed yesterday.Providing the public with an opportunity to make its voice heard, the group intends to oppose the continued “uglification” of Malta by rampant, uncontrolled development through challenging the government by all means possible. The group also aims to ensure the government lives up to its commitments under the Aarhus Convention, which Malta signed in 1998 and ratified in 2002."

Personal Comments: In real estate terms, it is of the utmost importance that any investment in the property market is properly protected and regulations are strictly adhered to. As I write, the press, the public and various professional bodies are expressing concern over various decisions taken by the Malta Enviroment & Planning Authority (Mepa). Various loopholes in the legal system have been pointed out, and it is now everyone's duty to pull the same rope and see that these deficiencies are addressed and corrected. The FAA pressure group is in fact not against proper and intelligently designed development, but against the destruction of our cultural heritage in the form of traditionally built village cores, and the continous encroachment on rural areas.

Maltese Newspapers on Line - Archiving

After assessing the changes in online data management by The Times of Malta I have no option but to concentrate more on articles published by The Malta Independent. These are the two main english newspapers on the maltese islands.

As I write, links to The Times of Malta articles will be dead within a month as the online paper is only retrievable within the month, while on the otherhand The Malta Independent archives up to 2 years back.
So, given that there is limited storage space on this blog, it is impractical to reproduce the entire texts of an article. A link with some personal comments remains the best way forward.

Should any news item appear on The Times only, then I will reproduce this in full together with the newspaper's publishing date.

Property Prices "Stable"

The Times of Malta published on it's back page today 27th. March 2006 an article with the above title. The full article can be read by clicking here.

Excerpt from article:

Property prices have levelled off after a steep increase over the past few years, estate agents told The Times in reaction to a European report ranking Malta highest in the EU for property price rises in 2004.
Douglas Salt, the president of the Federation of Estate Agents, confirmed that the steepest increase in prices was seen in 2003 and 2004, adding that this was partly due to the pre- and post-EU accession exhilaration.

Personal Comment:

Also view the 2004 budget synopsis published by The Times of Malta by clicking here.
wherefrom we find the below extract:

Notification of a promise of sale

Promise of sale related to sale of property or any other transfer will be notified to the Inland Revenue Department. Upon notification, there will be paid 1% provisional duty on documents on the value of the property being transferred. This payment will be deducted from the total payment made on the deed of sale or will be refunded whenever the promise of sale is cancelled.
This will apply as from 1 January, 2004. Existing promises of sale will have to be notified under these new provisions by 30 June, 2004. Promises of sale for contracts that will be published before this date do not need to be so notified.
Any promise of sale that will not be registered according to these regulations will not be legally valid.

Chamber of Architects condemns demolition of school in Qala

The following article was printed on The Malta Independent today 27th. March 2006. The full article can be read by clicking here and the Chamber of Architects & Civil Engineers website can be visited here to view photos and a press release download about the Qala School in focus.

Article:
The Chamber of Architects (Kamra tal-Periti) has condemned demolition work in Qala, Gozo.“Notwithstanding its strong recommendations for the Qala primary school building to be preserved, demolition works have commenced in connection with a project for a new facility for the Institute of Tourism Studies, undertaken by the Gozo Ministry and utilising European Union Funds,” the chamber said.

An excerpt from their press release titled "Is there no shame?" also downloadable here.

Demolition works in connection with a project for a new facility for the Institute of Tourism Studies have commenced at the Qala primary school building.The Kamra tal-Periti strongly condemns this vandalistic act, taken in defiance of strong objections made by the heritage authorities within MEPA. Despite this, planning permission was granted last year. Furthermore, MEPA’s own Audit Officer prepared a damning report as recently as last month, calling for the issue of an Emergency Conservation Order.

Accountability at the building site

On today's Times of Malta 23rd. March 2006 we find a very interesting article by Professor Lino Briguglio (click here for his bio) where he comments on the upcoming new laws and regulations to bring contractors and developers in line vis-a'-vis accountability in matters regarding any damages, and the over all cleanliness of the building sites around the island. The full text can be read here.

The article ends with the words:
"A problem often encountered by residents affected by the development is that most property developers engage many sub-contractors, with some being less considerate than others, so that when one asks the developer to be more careful, he says it's not his fault, but the contractor's, and a particular contactor says that it is not his fault but of other contractors. For this reason, it is very important that the regulations clearly identify who is responsible for the whole construction exercise, so that those affected will know exactly who is ultimately accountable for the damage. This will also put pressure on the person responsible to oversee the whole process and to see to it that the neighbourhood is not unduly inconvenienced."

Of course this is easier said then done, but it is a welcoming sign that the goverment is finally taking the bull by the horns. After all, when discussing the shabbiness of most building sites, one has to keep in mind that this is pure and simple disrespect for the neighbours. It can hardly be the case that these energetic workmen, shifting material and building all day long, lack the energy for some light work like tidying up before leaving.

Estate agents attack 'unfair' property tax

Parliamentary Secretary Tonio Fenech yesterday faced the frustrations of estate agents who are still not satisfied with the final withholding tax regime, despite the amendments made recently.

Mr Fenech, along with Charles Mangion, the Labour Party's main economic affairs spokesman, were guest speakers at the Vodafone Economic Forum, sponsored by Radisson, The Malta Economic Update and Progress Press.

Estate agents made it clear that they were still not happy with the amendments, despite Mr Fenech's claim that the recent changes were arrived at after consultation.

Read the full article on The Times of Malta today 18th. March 2006 by clicking here.

Impact of loan conditions on property prices in Malta

A very important article on The Times of Malta today 16th. March 2006.

"The MFSA is preparing a report which will include suggestions to help the government decide whether, and how, it could take measures regarding bank loans for property purchase, the Prime Minister told Jason Azzopardi (PN) in reply to a parliamentary question yesterday..."

and ending with:

"....including whether there was a need for regulations laying down that conditions governing property loans should be more restrictive."

The full article can be read by clicking here.

I wonder if we're looking at an introduction of buy-to-let loans, and the implementation of rental restrictions on normal house loans. Perhaps we'll also see more stringent regulations on issuing normal loans thus making the property letting market more attractive to maltese.

Time will tell.

Rent Law Reforms

Excerpt from an article published today 14th. March 2006 on the Times of Malta by Mr Victor A. Galea, President of the Malta Chamber of Commerce and Enterprise.

"The first urgent rectification should be the removal by law of the so-called "security of tenure" practice. For years, this created a social injustice as it offers protection not only to the incumbent tenants but also to relatives of tenants, in particular those who "abusively" moved into premises in the twilight of their relatives' lives in order to "inherit" favourable rental conditions. This practice is to be condemned as morally incorrect.
The second is liberalisation of pre-1995 residential rents. The Chamber proposes that a formula acceptable to all parties be devised with a view to hasten the liberalisation process."

Read the full article by clicking here.

Also in today's Times of Malta, we find a letter written by Klara and Peter Paschke from Grossenseebach, Germany and titled "Don't ruin Gozo". The letter opens with:

"We own an apartment in Zebbug, Gozo. Four out of six apartments are hardly ever used. When we walk through the various villages we realise that obviously a major portion of the housing is not utilised.....". For the full letter please click here.

What is land development in Malta like, according to the State of the Environment Report 2005?

The Times of Malta today published a synopsis of the report by MEPA. The full article can be read by clicking here.

Some facts from the report:

¤ 23 per cent of Malta is urbanised, yet 23 per cent of dwellings are temporarily or permanently uninhabited.
¤ Between 2002 and August 2005, 89 historical sites and areas were protected under the Development Planning Act, covering 167 hectares of fortifications in the Grand Harbour and Mellieha areas and at Fort Chambray in Gozo.
¤ 0.09 per cent of Malta's agricultural land is under organic cultivation.

The State of the Environment Report 2005 is a Mepa publication available on www.mepa.org.mt

The Revised Property Sales Tax: Catalyst For Market Growth?

Vodafone Malta and Radisson SAS Bay Point Hotel have sponsored a series of economic fora organized by The Malta Economic Update magazine. On March 17th., the first forum will focus on the revised property sales tax.

Charles Mangion, opposition spokesman on finance and economic affairs, and Chris Grech, from Dhalia estate organisation, confirmed they will be speaking at the forum, the organisers said. Tonio Fenech, Parliamentary Secretary for Finance, will be guest speaker.

Wake-up the public - A better city life enviroment

On Saturday 4th. March 2006, The Times of Malta published a full page advert (read text here). by the Malta and Gozo Citizens Lobby Group. The page, being a paid advert and not an article, does not appear on the paper's online edition.

In all, over 400 signatures were collected and published, a sizeable number of which belonged to high profile people on the island.

The day after, the Sunday Times of Malta covered the whole matter under an article by Sarah Puntan-Galea, and titled "Three women set up pressure group". You can read the whole article by clicking here.

If you want to get involved call Ms Vella on: 9984-6088, e-mail: mglobby@hotmail.com , or write to: PO Box 41, Sliema SLM 01.

Property related articles in today's newspapers

Wednesday 1st. March 2006 - From the Times of Malta, and The Malta Independent

Unacceptable development
Michael Ellul, Madliena.

I recently heard that application No. 5277/96 for Ta' Cenc has been resuscitated and the developer has submitted an Environment Impact Statement to the Malta Environment and Planning Authority. I am writing to voice my strong objection to this development.
The applicant now seeks to double the size of the existing hotel, build another hotel and construct 49 bungalows and 67 villas, all in an Outside Development Zone.......continues here.

Housing Authority to offer 419 new units.

...The building programme includes urban regeneration projects in Cospicua, Floriana and Valletta and the construction of new apartment blocks in various localities like Pembroke, Mriehel, Mtarfa, Qawra, Kalkara, Mgarr, Naxxar and others.
In all, the Housing Authority will provide 419 new units - 359 flats and 60 maisonettes - as well as about 500 garages. The estimated cost amounts to over Lm10 million. About half of the units are expected to be ready by next year and the whole programme shall be completed by the beginning of 2009, the Housing Authority said.....continues here.

Law Report: The right of passage.
Chief Justice Vincent Degaetano/Anton Depasquale/Albert J.Magri - Court of Appeal
Published today and taken from the First Hall - Civil Court - 7th. July 2004

Plaintiff had a lease of a field in Qormi while defendants were the owners of the adjacent field over which plaintiff had a right of passage either by virtue of a cart or animal, as per public deed (6 May 1966). During the two months immediately preceding this case, defendants committed an act of violent spoliation to plaintiff’s detriment by blocking the entrance of their field leading to plaintiff’s field by placing a crane and stones preventing free access of plaintiff to his field......continues here.

Mepa's non-enforcement - David Pace, President Chamber of Architects

The Times of Malta dated 28th. February 2006 published a very significant letter sent in by Mr. David Pace, President of the Chamber of Architects (Kamra tal-Periti) addressing the Xemxija road collapse, and the more recent mudslide following illegal excavations by Polidano Brothers.
Asfaltar Ltd. was awarded a 6 million euro contract for rebuilding the 2.7km.Xemxija bypass in question. The company is also part of the GAP Joint venture consortium together with Polidano Brothers and Gatt Brothers.

Below is part of Mr. David Pace's letter, and the full text can be read by clicking here.

Mepa's non-enforcement (segments of the letter)


"........in this particular case the KTP however finds it strange that:
The damage to the St Paul's Bay bypass above the rear end of the Xemxija plot has been allowed to remain for years now, with one lane actually been cordoned off as a precaution."

"......according to the Mepa website, that part of the site near the bypass and where the collapse occurred is only covered by an outline development application (PA 2358/02) which was submitted on April 24, 2002 but which has not yet even been determined."

"......Yet notwithstanding this, development was allowed to continue. Furthermore, the site is hit by an enforcement notice (ECF 762/04 for excavations, land clearing and drilling for piles without a permit. Two site inspections by the enforcement section (December 2, 2004 and November 11, 2005) reveal that the notice was not complied with."

"If the site has a history of enforcement notices not being observed, why did Mepa not use its powers under section 55 of the Development Planning Act and enter the site to enforce compliance, including the disabling or removal of all tools, vehicles and equipment if necessary?"

Update 24 April 09

Press Release today 24 April - FAA

Flimkien għal Ambjent Aħjar deplores yesterday's decision by MEPA to allow ADT incorporate Polidano Brothers' plans for garages into the reconstructed St. Paul's Bay bypass, just in case Polidano Brothers are granted a permit for such works. This is taking place in spite of the fact that Polidano Brothers' unauthorised building activity in the area had caused the collapse of part of the hillside and the St. Paul's Bay bypass almost a decade ago, very nearly swallowing a neighbour's residence which subsequently had to be demolished.

Read the full PR here.

BICC excavation policy framework

The Times of Malta of 26th. February 2006 published in it's "Opinion" coloumn and article by Mr. Robert Musumeci. The first few paragraphs are below, and the full article can be read by clicking here. The BICC website can be found here.


"Architect and chairman of the Building Industry Consultative Council within the Ministry for Resources and Infrastructure Robert Musumeci explains a new concept regulating excavation works
As property prices go up, planning regulations to curb urban sprawl become more restricted and policy regulations compel more developers to provide on-site car park provision, our local construction industry has been witnessing a marked increase in excavation works.

Under these circumstances, the BICC has prepared a guiding framework aimed to review current legislation consistent with emerging building needs and general public safety."

Press Release - Federation of Estate Agents (Malta)

The Times of Malta today published a press release from FEA (Malta).

The title was "Estate Agents still unhappy with capital gains tax system" and the full article can be read by clicking here.

The Federation of estate Agents, in this article, also commented about the recent exchange of correspondence in The Times relating to the rental of property owned by non-Maltese (see previous blogs by clicking here).

Another article on the same newspaper, titled "Sliema residents split over proposed changes" is a resume' of the raging battle between Qui-si-sana residents and the goverment over a new car park, and also with regards other plans published in The Times on Wednesday including proposals to reorganise traffic in Sliema and pedestrianise parts of the town centre.

This previous article titled "Consultation over Sliema traffic plans" on February 22nd. 2006 can be read by clicking here.

In the letters section of The Times of Malta, a reader wrote in under the title "Bypass Safety" (click here to read letter)vis a' vis the imminent danger presented by the half collapsed bypass running over St.Paul's Bay toward's Xemxija, which had collapsed and been half cordoned off by concrete barriers due to excavations on an underlying building site. More recently a further mudslide swept off half the foundations from under a residence, leaving part of it perched in mid air.

MEPA is claiming it is not responsible for the safety of projects it has sanctioned, and this responsibility lies with the developer and architects. An inquiry into the matter has been ordered by Environment Minister George Pullicino , and a report should be issued within 6 weeks from February 8th. 2006.

National Architecture policy to be drawn up

The process to draft a National Policy for Architecture was launched yesterday at the Fine Arts Museum in Valletta, with a view to bringing Malta's built environment in line with EU practices.

Chamber of Architects president David Pace said the policy's aim would be to inform the public of their rights to enjoy a built environment that was socially, economically and environmentally sound; to work towards achieving a sustainable built environment for today's and future generations; to raise awareness of and protect cultural aspects of the built environment; and to contribute towards achieving good governance in architectural matters.

The full article on today's Times of Malta can be read here.

While such a step is heartening, and brings us one step closer to providing island residences of superior quality, I am stupefied as to why the maltese Federation of Estate Agents isn't being involved.

Landlord collecting rental arrears

Today's Times of Malta published a letter by Edward Delicata of St. Julian's.
The story echoes many other similair problems landlords are having with tenants who moved in under the old rental laws.

Following is the letter:

Tenant's Trickery

A tenant owed the landlord rental arrears plus interest and legal expenses amounting to Lm1,070. The tenant had to evict the premises by court order.
The tenant, as a last resort, provided a hazy assurance of payment by showing off cash amounting to Lm1,070. In spite of legal assistance provided to both parties, the tenant managed, by this hideous act, to obtain the best condition possible in renewing occupancy of the tenement, that is, leaving the owner without the money and occupying the premises once again by depositing in the registry of the court an amount of Lm180 as rent for a period of six years.
Furthermore, the premises have been valued by an architect at Lm8,000 in an occupied state and at Lm30,000 if vacant.

EU citizens rights to rent out their property in Malta

Dr. Simon Busuttil MEP wrote in today's Times of Malta, primarily to answer Dr. Peter Caruana Galizia's 'The Hybrid Holiday Home' article which in turn was written following yet another write up by Dr. Busuttil.
The centre of the debate is Malta's accession negotiations with the EU where the acquisition of immovable property (AIP permit) issued to EU Citizens precluded them from renting out a holiday home they purchased here in malta, when absent from the island.

Dr. Busuttil's letter titled 'Renting out property' can be read by clicking here.

The Times of Malta also published two more property related letters today. One from yet another angry reader who writes in about the now infamous Mepa debacle in Xemxija. The letter titled 'MEPA weak with the strong' can be read here.

Another letter titled 'Proper consultations' targets the recent cabinet meetings in Parliament discussing the white paper on rent law reforms. The article can be read here.

The white paper mentioned is the first step in the liberation process for properties rented out before 1995, where tenants had an automatic right to inherit these properties, and where many landlords are still collecting a pittance in rent per annum yet unable to evict the tenants.

Malta's Green Party is also seeking to abbrogate these socially unjust rent laws by a referendum, wherin 30,000 signatures have to be collected.
The pressure is definitely on, and the question is not if the reform takes place, but when, given that the next general elections are in 2008 and there are more tenants then landlords if one is fishing for votes.

Federation of Estate Agents meets Hon.Tonio Fenech

This morning the Maltese Federation of Estate Agents (FEA Malta) had a meeting with Hon. Tonio Fenech, Parliamentary Secretary in the Ministry of Finance. The meeting had been scheduled for last week, but was postponed to today at 10.30 am. by the Parliamentary Secretary himself.

The discussions centred on the following:

Property for Rent

Following a push by various entities to regularize the sector, the Federation has suggested a final withholding tax of 10% and a reduced license fee from the MTA (Malta Tourism Authority) on long lets, this to give owners incentive to fully regularize their position. The current scheme calls upon the landlord to pay 1 month's rent (non-refundable if contract is broken) to MTA, and 35% tax on profits. The only current exemption is 20% of the yearly rental income to cover maintenance costs. The rental income from a property is still relatively low when compared to it's sale value.

Final Withholding Tax

Following representations on the matter by the federation, no final withholding tax will be charged on our commission as long as this is mentioned in the convenium. Although the law has some weeks yet to pass through parliament, in the interest of the vendors that were going to opt for the 12% final withholding tax, the amount of commission and VAT due to the estate agent is to be mentioned in the convenium, for deduction.

Rental of property owned by EU citizens

No AIP is necessary if a property is bought by an EU citizen in order to rent it out - See my last posting below covering the discussions by Dr. Simon Busuttil MEP and Dr. Peter Caruana Galizia in the Times of Malta.

Newspaper articles today

Today's 'Talking Point' article on the backpage of The Times of Malta, continued putting pressure on MEPA (Malta Enviroment and Planning Authority) with regards to the Xemxija mud slide due to illegal development.
The article is available here under the title 'Safety and MEPA don't mix' by Mr. Joseph Grech, highlighting the ridiculous situation wherein MEPA is stating that is not responsible for the safety of property developments it sanctions.

The hybrid holiday home

Dr. Peter Caruana Galizia wrote an informative article on property buy-to-let options for foreigners, in today's Times of Malta, the essence of which is captured in bold text and reading: 'Once there is no pre-acquisition permit there can be no rental restriction.'

His article kicks off straight to the point.

"Simon Busuttil (February 1) argues that foreigners, including citizens of European member states other than Malta, should be allowed to rent out a Malta holiday home....."

".......The matter has not however been put in its proper perspective and Dr Busuttil is not quite right about the outcome of our negotiations."

Dr. Caruana Galizia's article goes on for the full length of page 12 of today's Times of Malta, and can be read online here .

He has assisted in the implementation of the necessary amendments to the law regulating the capacity of non-residents to acquire property in Malta following Malta’s accession to the European Union.

Dr. Simon Busuttil is a maltese MEP and the article in question from February 1st. titled "Owning Property in Malta" can be read by clicking here.

Inquiry into building site mudslide

Finally a positive headline on the Times of Malta front page vis a' vis the Xemxija mudslide. Click here Times of Malta 09/02/06 for the article and read a previous letter in the same newspaper dated January 30th. 2006 from a concerned property owner.

To quote part of the article, architect George Pullicino, the enviroment minister, is reported to have said:-

"In terms of the law, MEPA (click the link to see their new State of the Enviroment Report - A snapshot of the state of Malta's enviroment) had nothing to do with civil matters such as the safety of construction and potential damage to properties of third parties, issues of ownership and servitudes."

So what prevention system is there in place to protect property owners from developers? The law courts take years on end, and Polidano doesn't show up 99% of the time anyway, if we want to take him as a case in point. The other alternative, the Malta Arbitration Centre can settle disputes faster but lacks enforcement, and both parties have to agree and apply in writing for arbitration procedures to commence.

Meanwhile we have to contend with a legal amendment that will come into force shortly raising the maximum fine for the sanctioning of illegal development to Lm10,000 from the current Lm1,000.

Property Hijack

Again within the past few weeks property is making the headlines in the local papers. Again, and for the umpteenth time the issue has nothing to do with "real" estate laws, that is laws encouraging the quality of homes purchased, or incentivising the better upkeep of the enviroment in habitable areas, or improving the protection of home owners from falling prey to rampant illegal construction sites due to ineffective MEPA practices and loopholes.

If real estate legislation is in the headlines, you can bet your last penny that the subject line is property tax, the commercial aspects of the industry, and the creation of more side laws, and therefore more loopholes in the process. A viscious circle solely benefitting accountants no doubt.

To tax a property sale is of course understandable. Everything under the moon is taxed. However the current arguments raging on, see today's Times of Malta (Fenech, Dalli disagree on property tax), remind me of ancient Rome, where it is said that towards the end of the empire, the study of law and oratory had more to do with the the study of exceptions to the rule; directed at anomalies and designed complication rather then to any laws governing the reality of daily life.

There are quite a few crafty developers and businessmen on the island, and I'm not wearing rose tinted glasses yet. Some of these people will evade tax and use diverse mechanisms to do so no matter what. After making life miserable for all and sunder, with the man on the road trying to work out what is owed to the goverment on a one off sale, once the noose is closed tight enough, these predators will simply switch to a different vehicle to play their games leaving everyone else clear the mess.

When is real importance going to be given to the quality of units sold, and a sustainable development around them? When will small construction sites be properly screened off containing the dust and debris from billowing out into neighbouring homes? When will newly built units left in shell form be properly sealed off from the winter and not left humid, wet and cold for months on end, creating misery and dampness for buyers at a later stage?

When will property owners stop breaking into cold sweat when reading articles like this published in the Times 5th. February 2006 ? When will proper care be given to an increase in the real value of property, coming from proper legislation, social laws and sincere urban planning, and not from inflated costs?

New Year Resolutions

Happy New Year!

As an estate agent, the first couple of weeks of the year have always meant running around with two diaries in hand. Very inconvenient, but necessary for referral.

The last diary always worn out, notes scribbled throughout back to back, and the odd coffee stain. The new one crisp and clean, absolutely presentable yet not worth a penny till the lines within yield contracts.

Most people start off with a new year resolution, a wish meant to correct one's past errors, or create new opportunities. Always a wish to better one's position in life.

The backbone to a better future for any adult, past chasing wild dreams on the road, is a proper home and a roof over one's head where to plan and translate the better thoughts into reality.

A well planned and properly designed house or apartment will offer versatility, and scope for entertaining friends, accommodating a home office or a larger family should the possibility arise, and offer privacy for it's inhabitants whenever necessary. These factors should by all means override location.
Space and privacy are a must for both individual, and family units. If one can afford the right amount of space and more, then location enters the picture.

Malta offers a superb market for people seeking different layouts. Unlike some foreign markets where houses are churned out by the hundreds in one mold, this little island offers a wealth of possibilities. What might appear impractical for one family is perfect for another. Families with adolescents might jump at the opportunity of having the childrens' bedrooms close to the main door so that the young ones can drop in and out without disturbing the rest of the family. A young couple might shun this layout and want the hallway opening into the living room leaving the rest of the house private. The possibilities are endless.

All said and done, it is inevitable that economical implications will still have contractors building smaller units whenever possible.

Do remember however that the older towns and villages have grown "organically" around the central piazza and church, and are therefore better integrated with all amenities at hand. They also offer a hidden wealth of airy rooms, "turn of the century" character and frequently a cellar or well for practical purposes.