Redemption of land belonging to the Government of Malta or to the Lands Authority – Recent legal developments

Legal Notice 216 of 2019, which was published on the 27th of August 2019, will re-introduce a mechanism for the redemption of ground-rent for land which belongs to the Government of Malta or to the Lands Authority under a title of revisable perpetual emphyteusis. This Legal Notice is limited to the latter and shall not change the legal provisions regulating emphyeusis between private party owners.

This is not the first time that such a legal mechanism is being adopted in Malta to address matters relating to the redemption of ground rent for property belonging to the Government. In 2001 and 2012 respectively, a similar incentive for individuals to redeem the ground rent of the properties administered by the Joint Office and the Lands Authority was adopted.

An emphyteusis is a contract whereby one of the contracting parties, in this instance being the Government or the Lands Authority, grants to the other, in perpetuity or for a limited time period, a tenement for a stated yearly ground-rent which the latter binds himself to pay to the former, either in money or in kind, as an acknowledgment of the tenure. A revisable perpetual emphyteusis would be one where the amount of ground rent payable is revised from time to time as stipulated for within the original agreement for the emphyteusis. The law requires that such ground rent can only be redeemable during the year of revision.

Legal Notice 216 of 2019 provides for an exemption from the above rule. Therefore, any person who is in possession of property belonging to the Government or the Lands Authority, will not need to wait until the year of revision to be able to redeem the ground rent on such properties. Such individuals are subject to a number of conditions as stipulated for within the Legal Notice and may request the Land Authority to redeem the ground rent on such properties.

Citizens of the European Union who are recognised by the Lands Authority (or awaiting such recognition from the Lands Authority) as an emphyteuta of the land shall be eligible to redeem the ground rent on the property. Such applicants must also prove that there are no arrears of ground rent payment due to the Lands Authority on the property in question.

Each applicant would need to submit an application to the Lands Authority together with the relevant application fee as provided for in the Legal Notice. When submitting the application, the applicant would need to annex a number of documents supporting his or her application including:

  1. A sworn statement declaring that the entire content of the application being submitted is truthful and includes all relevant information which if omitted would result in the application being dismissed;
  2. A copy of the latest receipt of payment of ground rent paid;
  3. In the case of an applicant who has not yet been recognised as emphyteuta of the building or site by the Lands Authority, a copy of all the contracts made since the last emphyteuta recognised by the Lands Authority;
  4. A detailed plan made exclusively according to the template available from the Lands Authority showing the interior of the property at every level and the distance from the nearest street corner together with a scanned plan which is duly certified by an architect;
  5. A copy of the property or site plan issued by the Land Registry, duly certified by an architect;
  6. A survey showing the property and the existing road alignment;
  7. A copy of the identity card of the applicant; and
  8. Photographs, bearing the date and time, showing the present condition of the building or site.

The sum to be paid for the redemption of the ground rent, where there is no method of redemption in the original contract of empytheusis shall be equal to the amount of the ground rent thus revised, according to the index of inflation taken from the year preceding the submission of the application pursuant to these regulations and the rate of the ground rent from the year prior to the creation of the contract of perpetual Emphyteusis capitalised at the rate of five per cent. The redemption of ground rent made in virtue of the Legal Notice shall be made through a public contract and cannot be done through a schedule of redemption filed before the Registry of Civil Courts.