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 new parameters, including increased checks to ensure that the properties were really used for residential purposes. The controls would include evidence from the electoral register, water and electricity bills and inspections.

In terms of another new condition, the property must continue to be used as a residence by the owner for 20 years after the sale or redemption of the ground rent and there cannot be any speculative development,” Dr Azzopardi said.
Should a property be sold, a percentage of the proceeds would have to be given to the Government Property Division. That percentage would follow a scale according to the time that would have passed since the emphyteusis would have been redeemed. The percentage would vary from 10% to 25%.

Dr Azzopardi said the reform’s ultimate aim was for greater efficiency and to discourage speculation of government property. It would also ensure that the Church-State agreement on the transfer of Church property to the State could be fully respected. The agreement had laid down that Church property was being transferred to the state for social purposes.

The above article was published on The Times of Malta online: Thursday, 26th February 2009 - 10:43CET

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.