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Showing posts from 2009

Pender Place and Mercury House attain Special Designated Area status.

Pender Place and Mercury House have been made Special Designated Areas, which gives foreign owners rights they would not have if they owned property elsewhere – such as the right to sub-let.

Property owners – even those from EU member states – face some restrictions, and in some cases need to obtain a permit under Chapter 246 of Maltese law.

However, in special designated areas there are absolutely no restrictions to acquisition. There is also no restriction on acquisition through inheritance and there are also several other special exemptions. Different rules apply to the acquisition by bodies of persons.

So far there are 9 Special Designated Areas, all upmarket developments aimed at foreigners. Source di-ve

UPDATE February 4, 2010
Pendergardens is to hand over 126 finished apartments with garages to its new owners on time starting in April - The Times Business Week. Link to related Times of Malta article.

Decline in property prices slows down

timesofmalta.com 18.11.2009 13:42

Property market prices in the second quarter of 2009 showed a slower rate of decline, the Central Bank said today. Click here for the Central Bank of Malta Q3 Report (statistical cut off date 28 October 2009)

It said the consistent downward trend in prices experienced since the first quarter of 2008 appeared to be moderating.

Based on its own index, the bank said that residential property prices fell by 6% year-on-year during the quarter compared with 9.9% in the first quarter.
On the other hand, the number of advertised properties monitored by the Bank dropped by 28.0%, exceeding the 21.1% decline recorded in the March quarter, indicating a further drop in activity in the market.

However, the number of building permits granted by the Malta Environment and Planning Authority in the second quarter was at the same level as a year earlier.
The largest drop in prices, of 12.7%, was registered by prices of maisonettes in shell form. Deductions of 6.9% and 6.4% i…

Budget 2010 - Property Tax - Property restoration refunds

Budget 2010, presented in Parliament today November 11 2009 by Finance Minister Tonio Fenech, announced a further adjustment on the 2005 tax scheme(where a choice was offered between a 12% withholding tax on market value, or a capital gains payment, over property transfers undertaken within 5 years of date of purchase), and has now been extended for a further 2 years (to 7 years) from the date of purchase for the years 2010 and 2011.

Restorations of scheduled Grade 1 historical buildings will now also be eligible for a refund of 15.2%.
Click here to access Budget 2010 homepage published by the Ministry of Finance.

MEPA schedules Wied Ghajn Zejtuna in Santa Marija Estate, Mellieha.

Il-Wied ta' Għajn Żejtuna, at Santa Marija Estate in Mellieħa has been scheduled by MEPA (Malta Environment and Planning Authority) for the protection of its biodiversity and natural heritage.

Although within the development zone, only maintenance of existing structures that are already covered by a development permit will now be allowed. Proposals for bungalow development adjacent to the scheduled area will need to include a block plan showing the delineation of the rear property wall aligned with the scheduling boundary, and the scheduled part of the site retained in its natural setting.

FAA's (Flimkien ghal Ambjent Ahjar) reaction

Flimkien għal Ambjent Aħjar (FAA) welcomes the announcement that MEPA has scheduled Wied Ghajn Zejtuna at the Santa Maria Estate in Mellieha. Although limited in size, this area forms a rich eco-system supported by the permanent the freshwater spring which runs through it. It is very encouraging that in designating it as a protected area and stipulat…

VLC bye law seeks to impose the sealing off of derelict Valletta properties

A new bye law entitled "Maintenance of Building Facades", proposed by the VLC (Valletta Local Council) back in June 2009, will seek to overcome the ownership traceability hurdle currently impeding the local council from sorting out the substantial number of derelict properties, which constitute a public hazard and an eyesore in Malta's capital.
The bye law, currently pending publication in the Government Gazette, will allow the VLC to repair and seal off derelict properties, at the expense of the property owners. Effectively, a notice will be affixed to the properties in question, asking the owners to start carrying out the necessary works within a week, failing which, the VLC will move in to carry out such repairs at the owner's expense, and seal off the property. Access to properties repaired by the VLC will be denied to their respective owners, unless these expenses are then refunded.

Santa Marija Estate (Mellieha) clause unenforceable

The Civil Court has determined that a clause in the contracts for plots at Sta Marija Estate Mellieha, could not be enforced to reclaim the property as it did not preclude the property from being used by people other than the owners.
“This Court disagrees with the meaning of the clause as it was written. The house was being used for “private residential purposes” even if the person living there is not the owner. And there is no link between the house being used as an ordinary residence and as a private residence,” the Court, presided over by Mr Justice Joseph Zammit McKeon, said.

Silvio and Maria Isabella Borg were being sued by Albert Mizzi in the name of Central Mediterranean Development Corporation (CMDC) because the contract for their property in Sta Marija had a clause which said that it was for “private residential purposes only” but the Court said that this should not be interpreted to mean that it could only be used by the owner as a residence. It noted that the Borgs still use…

Maltese property owner wins landmark European Court case over imposed lease

The European Court of Human Rights has ordered the Maltese government to pay compensation to a Maltese landlord who filed a complaint after Maltese law was changed, thus allowing his tenant to continue to live in his property even after a temporary emphyteusis expired.

Mr Philip Amato Gauci said his property rights were infringed as a result of the new law, which imposed on him a unilateral lease relationship for an indeterminate time without providing him with a fair and adequate rent.

He explained to the court that he owned a maisonette in Sliema which in 1975 was granted on temporary emphyteusis for 25 years for a ground rent of €210 per year.
But as a result to a change in the law in 1979, once the term of the emphyteusis expired, tenants were granted the right to retain possession of the premises under a lease, without the consent of the owner. The law did not apply for post 1995 emphyteusis.

Mr Amato-Gauci said he had been unilaterally deprived of his property without being able to …

Betting on the future of online gaming

Editorial Times of Malta September 16,2009(Note: The remote gaming industry is of particular significance to the maltese property letting sector.)
The future of the online remote gaming industry has been seriously threatened by a recent European Court of Justice ruling in favour of the Portuguese government's gaming monopoly and against Bwin, a major online Austrian gaming group that has a subsidiary in Malta.

The case was based on the contention on whether state gaming monopolies, in their pursuit to prevent crime, breach the EU's provisions on free trade in goods and services.

The judgement against Bwin confirms a previous sentence given by the ECJ in 2003 in the Gambelli case confirming that gaming state monopolies "can be justified only for reasons of public health or the prevention of crimes, like money laundering, fraud and game fixing". There are six other similar pending cases in EU courts. The outcomes of these cases are awaited with some trepidation by the onl…

Investing in a low-interest environment

Letter - Times of Malta - Monday, 14th September 2009
Investing in a low-interest environment
Norman Mifsud, Madliena


In his letter Bonds Prospectuses, September 9, (click here to read) economist Karm Farrugia quite rightly tried to explain the terms used by issuers of prospectuses such as "unsecured" and "subordinated" bonds.

Few people except persons in the financial sector really understand the nuances and ranking of these bonds being issued. Investors are in most instances attracted by relatively high interest rates being offered without bothering to study the prospectus and the relevant risks involved.

Relatively high rates may appear quite attractive to investors in an attempt to maintain their level of income in a low interest rate environment.

Moreover, none of these issues or issuers is rated by a recognised rating agency. With the increasing number of companies taking advantage of the prevailing low interest rates offered by the banking sector it may be time fo…

Judgment 'not so bad' for Malta - i-gaming

Note: Also refer to the Times of Malta news report dated September 09, 2009 (Ivan Camilleri - Brussels), available here. Both articles are included on this blog given the impact of the i-gaming industry on the property letting market here in Malta.
The judgment by Europe's top court last Tuesday giving member states the right to ban online gaming websites does not impact Malta's lucrative industry as much as it seems at first glance, the former CEO of the Lotteries and Gaming Authority believes.
Over the past few years, Malta has seen a surge in the number of online gaming companies setting up base here because of favourable legislation and operational conditions, including taxation. In fact, it is estimated that about 10 per cent of the world's remote gaming companies operate from Malta, with the industry directly employing about 2,100 workers.

The former CEO, Mario Galea, who is now an industry consultant, said that although the judgment needed to be studied properly, the …

Property prices drop but sales remain strong

Property prices continued to drop in the first three months of this year but were up by nearly 14 per cent when compared to the same period in 2007, which was considered by the industry as a good year.

The National Statistics Office said the prices of all properties registered a decline of 2.83 per cent when compared to the corresponding period last year.
The price of apartments dropped by 5.26 per cent while that of maisonettes dropped by 2.19 per cent.

Although the NSO figures showed that sales were down by over 15 per cent, industry sources said the decrease was more gradual than that.
Estate agents said there was a decline in sales to British customers, mainly because of the unfavourable sterling to euro exchange rate.

The estate agents said that they had seen a change in mentality by the sellers, who are now pricing their properties closer to the market value. Before, they would inflate the price, hoping to get more than what the property was worth on the market.
Moreover, they said th…

Sliema council objects to proposed changes at Tigne project

The Sliema council is objecting to the change of use of a tower proposed as a hotel in the Tigne Project to residential apartments.

In a statement it said it was objecting to this change of use since itwould result in overdevelopment in an already overpopulated area.

"This tower should remain a hotel as was approved in the Development Brief.
"The council is also conscious that such a height was permitted in the development brief due to the fact that such a hotel would generate more jobs and hence contribute to the island’s economy.

"The proposed change of use would also create a serious impact on the amount of traffic influx of vehicles coming in and out of this area.
"It is evident that there will be already a massive increase in traffic coming from existing residents, new residents, delivery trucks that will supply all the commercial and catering establishments (once in operation) along with the people who will come to shop or work in new offices.

"The daily traff…

NSO data issued today. House prices, sales decline

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House prices dropped by 2.83 percent in the first quarter of this year, according to NSO data issued today, September 10 2009. (Download NSO data in PDF format by clicking here.)
The NSO said that the All-Property Price Index stood at 156.99, a decline of 2.83 percent compared to the corresponding period last year.

"This primarily reflected a decrease of 5.26 percent in the apartments index, and of 2.19 percent in the maisonettes index, compared to the corresponding quarter last year.
"However, when compared to the corresponding period in 2007, prices were up by 13.42 percent," the NSO said.

The All-Transactions Volume Index showed that the number of transactions in the first quarter of 2009 declined by 15.11 percent when compared to the corresponding period in 2008. This year's volume indices were also the lowest in the six-year period under review.

Follow article link.

Bonds prospectuses - Letter (Times of Malta)

Times of Malta - Letter to the Editor
Wednesday, 9th September 2009

Bonds prospectuses

Karm Farrugia, Madliena
The two current corporate bond issues describe them as "unsecured and unsubordinated". Previous ones having been "subordinated", there was obviously no point to mention "security" or its absence.
Not so with "unsubordinated", since this might well induce the ordinary investor to infer some kind of security. It always baffles me why prospectuses meant for public consumption use phrases which are beyond the public's comprehension. Why not just circularise them among the professionals and merely advertise their highlights?

Comments

Sergio Galea Vincenti
I share - totally - Mr. Farrugia's concerns: In my opinion, prospective subscribers to bond issues should always ensure they read the small print published in any prospectus and always ensure they get the right clarifications and advice before committing themselves to any subscription.

My co…

Setback to Malta gaming industry

Note: The folowing news report appeared in the Times of Malta, September 09, 2009 and is mainly of interest, given the real estate context of this blog, to the property letting sector.
Also of particular interest, is a counter-news report, appearing in the Times of Malta September 12, 2009 and also available on this blog in its entirety here.

Malta's lucrative internet gaming industry suffered a major blow yesterday after Europe's top court ruled that EU member states could ban gambling websites.
The judgment was delivered in a case filed by Bwin, one of the largest internet gambling companies in Europe with subsidiaries in Malta, against the Portuguese state monopoly.

Online internet companies across the EU have been fighting member states such as France, The Netherlands and Germany that insist on protecting their state monopolies to eliminate rising competition from online betting companies registered in other EU member states.

Yesterday's judgment, which can be interpreted …

The gentle art of rent reform

Following the publicity accompanying the launch of the White Paper on Rent Reform, the actual legislation mainly amending the provisions of the Civil Code on the institute of lease has been introduced very quietly in June this year by Act X of 2009.

The now published legislation has departed significantly from what the White Paper promised, or threatened - to those on the other side, but, on the whole, the thrust has been to bring about what the government has called a fair balance between the financial expectations of the landlord and what in effect is the social service provided by these landlords in being forced to accept the renewal ad infinitum of leases way beyond the original contractual period at more or less pre-war levels of rent. An attempt, in other words, to give a bit to each side in the vain hope of being everything to everyone.

This it has sadly done with at times incomprehensible drafting. I first read the English version, assuming this was the original, and then in des…

Property slowdown persists

A finished apartment advertised to sell at €80,000 in March 2008 would have had almost €9,000 cut from the asking price a year later, according to the Central Bank of Malta's property index.

The asking price for finished flats, the most common type on the market, was down by 10.8 per cent in the first three months of the year when compared to the same period a year before.
The figures published in the bank's quarterly review yesterday showed that the year-long slowdown in the property market accelerated in these three months of this year. Property prices in the first quarter dropped by 9.9 per cent when compared to the same period a year before.
The sharp decline was more than double the drop registered in the previous quarter when prices fell by 4.4 per cent.

The bank said lower asking prices were observed in seven of the eight property categories surveyed. Apartments in shell form and houses of character saw prices plummet by 20.4 per cent and 16.2 per cent respectively.
The pric…

New building site regulations aim to avoid damages to neighbours

The Resources Minister this afternoon formally launched new building site regulations aimed at reducing risks to third parties.They also introduce faster measures of redress when damages are caused.

Minister George Pullicino said the need for these regulations was borne out by the fact that 60 percent of development applications before Mepa now involved redevelopment, on sites which were inevitably surrounded by other buildings.

Regulations issued two years ago had addressed the environmental impact of building sites, he said, while the accent now was on safety and reducing inconvenience to third parties.
Mr Pullicino said contractors would have to be classified according to the nature of the work they could perform.

Building works would have to be preceded by a method statement which would show how the work would be carried out,the machinery to be used, and the time schedule. The method statement would be publically available and people would be able to file objections.
Contractors w…

MEPA to remain involved in policy formulation

The government is considering establishing time frames for the validation process of permits, some of which would be determined by the applicants.

Moreover, Mepa would remain involved in formulating planning and environmental policy, Parliamentary Secretary Mario de Marco, who is responsible for the reform, said this morning.
The proposed reform of the Malta Environment and Planning Authority is currently being debated in a national conference held as part of the consultation process.

Various stakeholders, including non-governmental organisations, Mepa employees and construction workers, are taking part. Prime Minister Lawrence Gonzi is present.
Very slight changes have been made to the original reform document, the most significant one being that the proposed voluntary screening process would be given a four week term.
Those present put across their grievances, positions and opinions.
Read the full article here.

The policy formulation process - Vincent Cassar, president KTP

"Dismantling the Mepa policy development function altogether, which does not seem to be the case, although, as yet not clearly and emphatically stated, would detach the knowledge-base from policy development with results we would not like to imagine."

The president of the Chamber of Architects (KTP), Vincent Cassar, argues the case with regards to MEPA's future policy functions, today 28 July, in the Times of Malta Opinion column.
Read the full article here.

Church commission broadly supports Mepa reform, but disagrees on some key issues

The Church's Environment Commission has generally welcomed the Mepa reform proposals while also voicing disagreement with some key points.

In particular, the commission stressed in a long statement that Planning and Environmental Protection should be separated and the development of planning policies should not be transferred from Mepa to the government.


The commission said it welcomed the fact that the reform was based on consistency, efficiency, accountability and enforcement.

It said the merger of planning and environmental responsibilities within MEPA in 2001 had not worked.

"Good intentions will only be translated into a functional reality, if and when there is a genuine commitment to do so. Why should a legal merger of the two relevant Acts (the Development Planning Act and the Environmental Protection Act) be more successful?" the commission asked.

Follow this link to read the full article on The Times of Malta.

Malta Property News

The market has slowed down considerably, both in property sales, and in property rentals.
As is common worldwide in such dire straits, the number of articles, statistics and interviews about the industry are abound. But what are the prime reliable sources? How do you filter through other agents' sales pitch and cut to the real content? This depends on whether you're after a balanced quick overview, in depth reports, in depth analysis on a particular segment of the market, or plain viscious journalism and the occasional expose'. Following are some of the best links. Just click on the highlighted text:
Times of Malta - The islands' foremost english daily. Accurate, balanced journalism with a very popular online comments section underlying each article. Have your say and see what the public's take is. Awash with property articles and opinion pieces.
Malta Today - A younger stable of journalists, set up in 2001. Usually highly investigative, bordering on the aggressive. Ma…

Court asks for review of Land Arbitration Board

The Constitutional Court has determined that the manner in which the Land Arbitration Board is set up does not provide sufficient guarantees of independence and has sent a copy of its ruling to the Speaker. The case concerned land in Bengħajsa which was expropriated by government in 1969 and passed on to Malta Freeport Corporation in 1989. The Court, presided over by Chief Justice Vincent de Gaetano, Mr Justice Joseph Camilleri and Mr Justice Joseph Filletti turned down the owners’ argument that the land was not expropriated in the public interest because of the Freeport’s privatisation.

However, the Court accepted that the manner in which the Land Arbitration Board is set up does not guarantee independence and impartiality.

The board is chaired by a member of the judiciary, with constitutional guarantees of security of tenure.

However, it also includes 2 technical members - architects - who are directly appointed by government for a maximum period of 2 years. These 2 architects provide t…

Appeal to revoke 12% withholding property tax

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di-ve.com report by Vanessa Macdonald A leading real estate agent is appealing to the Finance Minister to revoke the 12 per cent withholding tax on property sales, saying that the current scenario meant it no longer made sense. Dhalia business development director Chris Grech said the tax had been introduced in the Budget for 2006 at a time when property prices were rising fast.

Until then, Capital Gains Tax was paid on the sale of property based on set tax rates of 35 per cent on the profit made on the sale. The Finance Minister had hoped the withholding tax would circumvent the under-declaration on the value of the sale in order to reduce the amount of tax paid.

The Final Withholding Tax (FWT) was set at 12 per cent on the market value of the property sold, without allowing for expenses and other related exemptions which used to apply under the Capital Gains Tax system, and was applied upon contract of sale.

In February, 2006, Parliamentary Secretary Tonio Fenech (as he then was) unveile…

When Bubbles Burst

Editorial Times of Malta Wednesday 13th May 2009
There are few subjects guaranteed to stir emotions of many Maltese as the one on the future of the property market. The love affair of the Maltese with property ownership is only matched in intensity by the almost dogmatic belief of many that investing in property is practically risk-free, at least in the long term........Read the full editorial by clicking here.

New Building Regulations in the Pipeline - Launch of Consultation Documents

The much awaited Building Regulations Act moves one step closer today, with the launch of the Consultation Documents. These will regulate the avoidance of damage to third party properties.

Resources Minister George Pullicino said the law will pave the way for the creation of a Building Regulations Office under his ministry, and ensure future buildings will be built according to technical specifications. Before the demolition, excavation and construction of a site, a methodological statement outlining the method of construction would have to be made public. Also obligatory would be the classification of contractors according to their size, expertise and capabilities.

Methodological statements and insurance covering third parties would be obligatory.

The documents will soon be available at www.mra.gov.mt. Meanwhile submissions may be made to buildingregulations@mrra.gov.mt.

Central Bank of Malta on Property Prices

Property prices down 2.7% in 2008

by di-ve.com - editorial@di-ve.com
Current Affairs -- 09 April 2009 -- 11:45CEST
Property prices in 2008 fell by 2.7 per cent, according to the Central Bank of Malta, but some categories did better than others.
Advertised asking prices for flats in shell form and in finished form, which together make up over half of the sample, were down by 2 per cent and 5.4 per cent, respectively, while those for villas and terraced houses
declined by 3.7 per cent and 1.8 per cent.

On the other hand, higher prices were asked for 2 other categories. Prices of maisonettes in shell form
were up by 2.6 per cent, while those of town houses, which account for 5.4 per cent of sampled properties and display a high degree of volatility, increased by 10.4 per cent. Meanwhile, prices of finished maisonettes and houses of character remained roughly unchanged from 2007.

The sector seems to be self-adjusting to the oversupply resulting from the building frenzy of the past few years. …

New conditions for redemption of groundrent on government properties

The government is to introduce new conditions to a scheme for the redemption of the groundrent of government properties so as to deter speculation, Parliamentary Secretary Jason Azzopardi said this morning.
He said the scheme was suspended at the end of January in order to clear a backlog of applications and introduce new measures to prevent abuse and speculation.
The scheme was originally introduced for former Church-owned property and then extended to all government-owned properties used as residences.
Since its announcement in 2002, the scheme attracted more than 2000 applications and in view of the extensive verifications needed, there is currently a backlog of 3,000.
“For this reason, the scheme has been temporarily suspended and no new applications are being received,” Dr Azzopardi said.

He said the Government Property Division was using this opportunity to create a database of the pending applications in chronological order.
The pending applications would be considered according to n…

B. Tagliaferro repossesses building in landmark case

"B. Tagliaferro and Sons Ltd will regain possession of Leisure House in Archbishop Street, Valletta within months – subject to any appeal – after the Rent Regulation Board gave the tenants 4 months in which to move out.

The property was being rented for the sum of Lm900 a year by Albert Mizzi, Alec Mizzi, Central Mediterranean Development Corporation and Hubbalit Developments Ltd. The tenants first occupied the property in 1965, on an annually renewable basis.

However, the owners of the property said that the tenants owed Lm4,200 in rent arrears, as nothing had been paid since a part-payment in 1998. The tenants were offsetting the rent against urgent maintenance works on the property – but the parties could not agree on the value of the works, or on whose responsibility they were."

Read the full article on di-ve.com here.

Decline in house prices getting sharper

House prices in the third and fourth quarters of last year maintained a downward trend evident throughout 2008, the Central Bank says in its Quarterly Review, just published.
It said the bank’s property price indicator showed an annual decline of 3.2% in advertised prices, following contractions of 0.7% and 2.7% in the previous two quarters.
During the third quarter, lower prices were observed in six of the eight categories surveyed. Prices of finished flats, the most common type, were down by 5.5% on a year earlier, though the largest reductions, of 9.6% and 9.1%, respectively, were reported for villas and maisonettes in shell form.
Prices rose in only two categories: maisonettes in finished form and town houses. The prices of the latter, which account for 6% of the market, reported a sharp rise during the quarter, but these tend to display a high degree of volatility.
Data for the fourth quarter of 2008 revealed a further drop, of 4.4%, in house prices.

Timesofmalta.com

A Month Free? Rents Are Falling Fast in New York

"In this painful economic climate of layoffs and shrinking investments, there is a sliver of positive news: it’s a good time to be a renter in New York City. Prices are falling, primarily in Manhattan, and concessions like a month of free rent are widespread."
"People assume when sale slows down, rental will pick up, but that depends on what the source of this is,” said Gregory J. Heym, the chief economist at Terra Holdings, which owns Halstead and Brown Harris Stevens. “When you’re losing jobs, the rental market is also going to suffer."
Read the full New York Times article here.

Abbozz ta' Ligi - Kuntratt ta' Kiri - Act to Amend Letting and Hiring Code

Bill No 17 - Civil Code (Amendt) Bill (2nd Reading)

ABBOZZ TA' LIGI
msejjah
ATT biex jemenda l-Kodiçi Civili, Kap. 16

IL-PRESIDENT, bil-parir u l-kunsens tal-Kamra tad-Deputati,
imlaqqgha f’dan il-Parlament, bl-awtorità ta’ l-istess, hareg b’ligi dan
li gej>–

1. It-titolu fil-qosor ta’ dan l-Att hu l-Att ta’ l-2008 li jemenda l-
Kodiçi Civili, u ghandu jinqara u jiftiehem haga wahda mal-Kodiçi
Civili, hawn izjed il-quddiem f’dan l-Att imsejjah “il-Kodiçi”.
2. Minflok l-artikolu 1525 tal-Kodiçi, ghandu jidhol dan l-artikolu
gdid li gej>–
“1525. (1) Il-kuntratt ta’ kiri, sew ta’ haga kemm ta’
xoghol, jista’ jsir sew b’kitba kemm bil-fomm, izda l-kuntratt ta’
kiri ta’ fond urban u ta’ dar ghall-abitazzjoni u ta’ fond kummerçjali
li jsir wara l-1 ta’ Jannar, 2009 ghandu jsir bil-kitba.
Il-Bord li Jirregola il-Kera (hawn aktar ’il quddiem f’dan ittitolu
msejja[ “il-Bord tal-Kera”) ma[tur bis-sahha ta’ l-Ordinanza
li tirregola t-Tigdid tal-Kiri ta’ Bini ghandu jkollu kompetenza
esklussiva li jiddeçi…