By Etienne Licari, Commercial Advisor | Agile Commercial Real Estate
On 13 May 2026, The Malta Chamber hosted a seminar titled “Commercial Leases Explained: What Landlords and Tenants Need to Know,” presented by Dr. Kirk Brincau, Senior Associate at Mamo TCV Advocates, with a panel that included Charles Xuereb (CEO, Trident Estates plc), Jeremy Gingell (Belair Property), and Etienne Sciberras (President & CEO, Mapfre Middlesea).
I attended, as I do with most events of this kind — not because the subject matter is unfamiliar, but because there is real value in having it structured, sequenced, and placed in the context of recent case law. After hundreds of commercial transactions across my career in Malta, I have encountered most of the situations discussed in that room. I have sat across the table from landlords who have had tenants refuse to leave, tenants who have been served judicial letters, parties whose repair disputes have dragged on for years. The scenarios are not theoretical to me.
What events like this provide is the legal scaffolding around experiences I already have. The rikors, the Court of Appeal decisions, the specific articles of the Civil Code: these give a name and a number to situations I have navigated commercially, and that kind of structured clarity is useful regardless of how familiar you are with the territory.
That said, for the many attendees encountering this material for the first time, the seminar was genuinely illuminating. Here is the full picture, as presented.
Part 1: The Ghost of Leases Past — Pre-1995 Protected Commercial Tenancies
For anyone holding or occupying commercial premises under a lease that predates June 1995, the legal landscape is fundamentally different from the modern regime.
These legacy leases remain governed by Chapter 69 of the Laws of Malta, as amended by Act X of 2009. Rent increases follow a statutory path — 15% annually from 2010 to 2013 under Art. 1531D(1), then a default 5% per year from 2014 where parties cannot agree. Art. 1531I sets a hard outer limit: these leases expire within 20 years of 1 June 2008 — meaning June 2028 at the latest.
That 2028 date sounds like resolution. The seminar was clear that it is not. The approaching expiry does not reduce the disproportionate burden already carried by owners, nor does it prevent them from seeking judicial intervention before then.
Part 2: The Constitutional Route — When the Law Has Gone Too Far
Both the Maltese Constitutional Courts and the European Court of Human Rights have ruled consistently: Chapter 69’s rent control mechanisms violate Article 1, Protocol 1 of the ECHR — the right to peaceful enjoyment of property. The legislation may serve a legitimate public interest, but it fails to maintain the fair balance the Convention demands.
What owners must bring to constitutional proceedings:
- Proof of title
- Evidence of the protected pre-1995 commercial tenancy
- An architect’s valuation in five-year increments from 30 April 1987
Liability for compensation rests with the State Advocate, not the tenant. Key recent decisions:
- Rikors 107/2018/1 (28 Jan 2021): Time elapsed before filing does not reduce compensation. Commercial leases carry a 20% social-purpose deduction (vs. 30% for residential), plus 20% for uncertainty of continuous letting.
- Rikors 550/2022/1 (21 Oct 2024): The Constitutional Court removed the 15% tax reduction previously applied by the First Court, increasing net compensation for owners.
- Rikors 453/2021/1 (4 May 2026): Constitutional compensation is not subject to tax.
- Rikors 231/2023 (14 Apr 2025): Heirs recognised as victims for pecuniary loss; non-pecuniary damages are personal and do not pass to heirs.
- Non-pecuniary damages are standardised at approximately €500 per year of breach.
One nuance: courts may reduce compensation where an owner knowingly allowed a tenant to remain — even after business failure — for an extended period. Passivity carries a financial cost.
Part 3: Post-2010 Leases — Contractual Discipline is Everything
Modern commercial leases are governed exclusively by the contract and the Civil Code. Art. 1525(3) defines a commercial tenement as any urban tenement leased for a profit-generating activity — offices, clinics, retail, warehouses.
Five essential terms — omit any one and the lease is null (Art. 1531A):
- Clear identification of the property
- The agreed use
- The duration
- Whether and how it may be extended
- The rent and payment method
This is not a technicality. It has real consequences and I have seen it create problems in practice.
Di Fermo and Di Rispetto: The di fermo is the fixed period where neither party may terminate — a tenant who vacates early remains liable for the full remaining rent. The di rispetto follows, allowing termination on notice. Under Art. 1526(6), if a lessor terminates for reasons not permitted by the agreement or law, the lessee may claim damages.
Part 4: Repairs — Who Owes What, and What Happens When They Don’t Deliver
Repair disputes are among the most common issues we encounter in commercial leases. The statutory framework is fairly clear in principle, but frequently misunderstood in practice.
The split: Structural repairs (roofs, building integrity) fall to the lessor under Arts. 1539–1540. Ordinary repairs fall to the lessee under Art. 1556.
Tenant remedies when the landlord fails:
- Art. 1541: Intimate judicially, obtain court authorisation to carry out repairs, and retain rent to recoup costs.
- Art. 1543: Urgent repairs may be carried out without prior authorisation if serious prejudice is imminent — but the landlord must be notified and an expert report obtained.
- Art. 1544: If the failure materially prevents enjoyment of the premises, the lessee may seek dissolution plus damages.
The “all repairs” clause trap: This one matters. A clause requiring “all repairs” by the tenant covers only ordinary repairs — not extraordinary or structural works — unless the latter are explicitly and specifically accepted in the contract. This was confirmed in Rikors 885/2013 (Judge Falzon Scerri). Vague language protects nobody.
Also confirmed in the same case: a tenant who remains passive and fails to use the statutory remedies available (Arts. 1541/1543) cannot later claim compensation for lost income. Tenants have tools — they need to use them.
Part 5: Penalty Clauses — They Mean Exactly What They Say
After hundreds of commercial transactions, I have seen penalty clauses treated as boilerplate. They are not.
Rikors 237/2025 (28 Jan 2026) confirmed the triple function of a penalty clause: accessory obligation, coercive measure, and conventional pre-liquidation of damages. Where non-performance is total and the contract is clear, the Board enforces without reduction — dura lex sed lex.
Court of Appeal 435/2021 (25 Jun 2025) upheld a €250/day penalty in full, totalling €292,500. The reasoning:
- Reduction is only possible where partial performance benefited the creditor. Total non-performance does not warrant it.
- Penalty clauses as pre-liquidated damages preclude separate compensation for occupation.
- A tenant who remains in possession knowing a daily penalty accrues demonstrates bad faith and failure to mitigate.
Under Art. 1122, courts cannot abate penalties stipulated for mere delay. Read your penalty clauses. Both sides.
Part 6: Eviction — Do It Right or Face Criminal Liability
This is an area where the gap between what landlords think they can do and what the law actually permits can have serious consequences.
Self-help is a crime. Changing locks, removing possessions, or retaking property without a court order is Ragion Fattasi — up to 3 months’ imprisonment or a fine. In Rikors 206/2018 (1 April 2019), a landlord who changed the locks after a tenant refused a rent increase had police intervene and order the lock restored.
The two lawful routes to termination:
Judicial Letter (Art. 1570): Without a resolutive condition, the landlord must send a formal judicial letter. The tenant has 15 days to pay before the contract can be dissolved.
Resolutive Condition (Art. 1569): With a well-drafted resolutive condition — for example, granting the lessor the right to rescind ipso jure if rent is unpaid for 7 days — the lease terminates automatically at the moment of default, with no notice period required. The Court of Appeal confirmed this in Nr 747/2021 (12 February 2025). This single drafting choice can save a landlord weeks of process.
Summary Proceedings (Art. 16A): A sworn application before the Rent Regulation Board. If the respondent fails to appear or show a prima facie defence, eviction is decided at the first hearing. If a defence is shown, ordinary proceedings follow with 20 days to file a reply.
Warrant execution (Art. 384): Once issued, the occupant has between 4 and 8 days to vacate. The court executing officer then clears the tenement.
Part 7: Paying Rent — The Rules Are Stricter Than Assumed
Rikors 516/2024 (26 March 2025) restated clearly: punctual payment is the foremost obligation of any tenant.
Two points that regularly surprise people in practice:
- A tenant cannot unilaterally withhold or reduce rent, even where the landlord is in breach. The remedy is a judicial deposit — not a payment strike.
- Where a landlord refuses to accept rent, the tenant must effect a judicial deposit (ċedola) — depositing the sum in court at the creditor’s expense. This deposit is only legally equivalent to payment if preceded by a valid tender refused without valid reason, and made within 4 days (8 days across islands).
On VAT: Per Appell 154/2019 (21 June 2023), a tenant depositing rent under court authority is not in breach for excluding VAT — since no fiscal receipt is issued in a court deposit and VAT is owed to the State, not the landlord.
Part 8: Practical Perspectives from the Panel
The panel discussion grounded the legal content in market reality.
Jeremy Gingell noted the current market sits roughly 50/50 between renting and purchasing, shaped by company structures and tax considerations. Demand is shifting toward more flexible, modular layouts as remote and hybrid working reshapes how businesses use space.
Charles Xuereb made the point I fully endorse: court proceedings are the divorce. Expensive, slow, and damaging to both parties. The best lease is one that anticipates problems clearly enough that neither party ever needs to invoke it in court.
Etienne Sciberras addressed insurance allocation clearly: landlords insure the structure and loss of rent; tenants insure stock, contents, and public liability. On fire specifically — under Art. 1562, the lessee is strictly liable unless they can establish one of four defences: no fault, faulty construction, fortuitous event, or fire communicated from a neighbouring property.
Part 9: The Commercial Lease Drafting Checklist
Based on the full seminar content, here is the checklist we apply when advising clients:
Non-negotiable fundamentals: Property, use, duration, extension terms, rent and payment method.
Protect both parties — address explicitly:
- VAT treatment — state inclusive or exclusive clearly
- Utilities and ARMS responsibilities
- Repair obligations — ordinary vs. extraordinary, who bears each
- Condition of premises and full signed inventory at handover
- Deposit and guarantor terms
- Penalty clauses — understand the exposure on both sides
- Resolutive condition for non-payment (lessor protection)
- Force majeure — must specify direct causation; pre-existing defaults are not covered
- Access rights (Art. 1548A) — notice periods for inspections and viewings
- Subletting and assignment — a transfer of 50%+ of company shares is deemed a sub-lease (Art. 1614(3))
- Insurance obligations
- Alterations and improvements — consent required; ownership on exit (Art. 1564)
- Right of preference — sitting tenants hold this under Art. 1594(a); acceptance window is 15 days
- Permit contingencies — allow termination if regulatory licences are denied
Good to know:
- A lease of co-owned property requires all co-possessors’ consent (Art. 1527) — without it, the lease may be declared null within 2 months
- Accepting keys back operates as tacit renunciation — landlords who accept keys cannot then pursue rent for the period after (Rikors 170/2020)
- A lease does not dissolve on the death of either party (Art. 1572) — it continues with the heirs
Closing Thoughts
Events like this one from the Malta Chamber are worth attending — not always because they present entirely new ground, but because they force structured thinking about a subject that is easy to navigate intuitively until the moment something goes wrong.
My experience across hundreds of commercial transactions in Malta has given me first-hand familiarity with most of the scenarios covered. What the legal framework provides is the precise language and precedent that sits beneath those experiences. The two things together — commercial pattern recognition and legal structure — are what I draw on when advising on a leasing transaction.
If you are entering, renewing, or reviewing a commercial lease in Malta and want a sounding board, feel free to reach out.
If you’re at a transactional stage and looking for office space in Malta in particular, have a look at our available listings of available offices for rent across the prominent business districts in Malta.
Etienne Licari is a Commercial Advisor at Agile Commercial Real Estate and MaltaOffices.com — agile.mt
This article is for informational purposes only and does not constitute legal advice. For specific legal guidance, please consult a qualified Maltese advocate.
