The proposed regulation that would require apartment owners in Malta to secure neighbour approval to rent out their property for short let holidays presents a complex legal landscape.
On 12th November, Malta Tourism Authority (MTA) CEO Carlo Micallef announced a proposal requiring apartment owners in Malta who wish to rent out their properties as short lets to secure the consent of their condominium neighbours.
Without this approval, landlords seeking to rent out their properties as short lets on platforms like Airbnb would be unable to obtain the necessary MTA licence, Mr Micallef stated, noting that the rule change aims to balance community concerns with tourism needs.
As part of the proposed regulation, landlords will be required to gain approval from their condominium association via a majority vote at general meetings, which would need to be renewed every three years.
Landlords may appeal the condominium’s decision through a designated mechanism to ensure fairness and prevent potential misuse.
According to Philip Ellul, a lawyer at corporate services firm EMD Malta, this new regulation could pose significant challenges within Maltese property and condominium law
In comments made to WhosWho.mt, he pointed out that requiring regular neighbour approval may conflict with property owners' rights under Maltese law, specifically regarding owners' rights to enjoy and make use of their property.
Dr Ellul explained that "each property owner has the right to enjoy and dispose of their property as they wish," provided they do not infringe on others' rights. He further highlighted that requiring recurring approvals could lead to inconsistencies and potentially arbitrary rejections.
Such an approval process, Dr Ellul noted, might also conflict with the principle of administrative consistency, a cornerstone of Maltese administrative law.
If approval is withheld on subjective grounds, owners may view this as an undue restriction that limits their right to fully enjoy their property.
He emphasised the importance of having a uniform and transparent process for granting or denying neighbour approval, warning that variable requirements could create uncertainty and increase legal disputes.
Potential infringement on property owners' rights
Dr Ellul raised concerns that the proposed regulation could infringe on the rights of property owners by requiring them to secure the approval of their neighbours before renting out their apartments as short lets.
He explained that Maltese law strongly supports property owners’ rights to freely enjoy and derive income from their property.
By imposing this regulation, the MTA may inadvertently be limiting these rights, especially if objections are based on personal preferences rather than objective criteria.
According to Dr Ellul, Maltese law enshrines the right not to be deprived of property use without lawful justification. He cautioned that if the MTA does not implement clear and justifiable criteria for neighbour objections, affected property owners may seek judicial review to protect their rights. Without a transparent and fair framework, there is a risk that landlords could face restrictions that do not align with constitutional property rights.
Complications in mixed-ownership buildings with short let investors
The proposed rule could also bring about conflicts in mixed-use buildings where some owners rely on income from short term rentals while others prefer a stable residential environment.
Dr Ellul noted that condominium law in Malta already requires a majority vote for management decisions. However, the issue of short let approvals intersects with individual economic interests, which could create tension between owner-occupants and short let investors.
He suggested that in such cases, the MTA should set out specific guidelines to help clarify acceptable grounds for approval or denial.
"Guidelines defining acceptable and objectionable criteria for neighbour approval and the appeals process are essential," he said.
Such criteria would ensure fairness and prevent owner-occupants from using their majority status to unfairly limit the rights of those who depend on short term rentals for income.
Legal and logistical issues from the three-year renewal requirement
The requirement for landlords to secure neighbour approval every three years could introduce both legal and logistical issues, Dr Ellul argued. He explained that under Maltese law, property owners have the right to make reasonable use of their property, including renting it out. Requiring landlords to reapply for approval every three years could be perceived as an excessive interference, particularly for those who rely on rental income.
From a logistical perspective, Dr Ellul pointed out that the three-year renewal requirement could place an undue administrative burden on condominium associations.
In larger apartment complexes, organising frequent general meetings and securing a quorum could be challenging, potentially leading to delays and disagreements. He warned that inconsistent outcomes from these renewals might infringe on property owners’ legal certainty and predictability in exercising their rights.
Legal remedies available to property owners denied a licence renewal
For landlords who might be denied a licence renewal due to neighbour objections, Dr Ellul highlighted that Maltese law does offer possible remedies.
According to the MTA’s statements, landlords would be able to appeal such decisions. Dr Ellul explained that this right to appeal would give property owners a chance to challenge decisions that they believe are unjust or made on arbitrary grounds.
He said, "owners should have the opportunity to appeal any decision that lacks clear justification."
Dr Ellul also indicated that property owners might seek civil remedies if they believe their rights to use the property are being restricted without sufficient legal grounds.
He suggested that, in these cases, landlords could argue in court that the regulations are infringing on their rights, particularly if the decision-making process is not transparent or if objections are based on personal biases rather than legitimate community concerns.
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