Property Law and Real Estate

Property law is a branch of civil law which regulates the legal relationship between a person and property. In this field, the latter term refers mainly to tangible immovable assets such as land, buildings or dwelling places, also known as ‘real property. The said legal relationship, concerning rights and obligations of a person in a particular property, may vary – for example, from ownership to lease and to emphyteusis (ċens). Maltese property law is derived from Roman law, and is largely codified in Book Second of the Maltese Civil Code entitled ‘Of Things’, which categorises property into immovable and movable property.

The majority of acquisitions or enjoyments involving property are for residential purposes (such as a house, maisonette, apartment/flat etc.), followed by those for commercial purposes such as (development and projects, office, retail outlet, etc…). Whether by means of lease, ‘sale and purchase’ or inheritance, contracts and legal implications are involved. Moreover, transfers of ownership in immovable property must be effected by means of a public deed in front of a Notary Public. Under normal circumstances, the transfer of ownership of immovable property (or part thereof) is preceded by the signing of a ‘promise of sale agreement’ (konvenju) by the prospective buyer and seller. Not all property transactions necessarily involve a buyer and seller. Examples of this are: inheritance of property (transfer causa mortis) or donations. At all stages of transactions involving immovable property, legal advice is strongly recommended to any party involved.

Furthermore, the Immovable Property (Acquisition by Non-Residents) Act applies to all transactions involving acquisition of immovable property in Malta. At least when acquiring property as a primary residence, Maltese and EU Citizens – whether with 5 years continuous residence in Malta or not need not apply for a permit prior to purchasing immovable property. When it comes to a secondary residence, EU citizens must satisfy the 5 years continuous residence requirement. Third Country Nationals require an AIP permit prior to purchasing their property (whether for primary or secondary residence). Exemptions, such as properties in a Special Designated Area, apply throughout.

The rental market in Malta was liberalised in 1995. Private residential lease agreements are governed by Jan 2010 law and long-let private residential leases, as a rule, must be registered by law with the Housing Authority. This new law has had many ambivalent reactions, mostly from lessors, and is the subject of much controversy. As Malta continues to attract more foreigners, the letting industry has boomed – specially due to foreigners working in the the iGaming sector.

Unlike other European States, despite the growing rate of property development, the Maltese real estate sector demonstrates a realistic propensity to appreciate. This is expected to continue further as foreign investors seek quality properties, for both residential and commercial purposes, in various locations in the Maltese islands. The financial returns on property investment have, time and time again, throughout the years, proven to be lucrative and stable. One common practice is for one to purchase an immovable property financed by a loan, which is eventually paid off by rental income derived from letting the property to a third-party. By the end of the process, the property pays for itself and one has a property to call their own.

Lexvirtualis™ provides legal advice on all aspects of buying, selling, renting, renovating or developing residential, commercial and industrial property in Malta.

Our lawyers will assist clients during the purchase/transfer process.

Examples of services we offer:

• Drafting and vetting of contracts, as well as notarial services relating to

- Lease, Emphyteusis (cens), Usufruct

- Promise of sale agreements (konvenji)

- Sale and Purchase of immovable property (including loan) contract

- Divisions of co-owned property

- Powers-of-Attorney relating to the above

• Advice regarding to any type contracts prior to signature

• Acquisition of Immovable Property (AIP) Permits (esp. third county nationals) and other government permits and procedures

• Drafting of condominium rules and administration thereof

• Registration of Promise of Sale Agreements

• Registration of Lease Contracts

• Timeshare exits

• Creation of property-owning trusts

• Tax Structuring and Advice

• Property searches with the Public Registry and Land Registry

• Registration or cancellation of privileges and hypothecs over immovable property

• Redemption of ground rents (cens)

• Assistance with bank loans and finance

• Assistance to architects

• Assistance with development planning

• Notarial services relating to any of the above

• Consultation services, on residential, commercial, mixed-use and industrial property acquisition, tourism and industrial real estate development

• Alternative Dispute Resolution and Litigation (eg. enforcement or recission of promise of sale agreement, recovery of deposits, latent defects, etc…)