Transfer of Government Property Leased for Commercial Use Now Regulated in Malta

Transfer of Government Property Leased for Commercial Use Now Regulated in Malta

Dr. Charlene Mifsud | 13 Jul 2018

Immovable Property

On the 6th July 2018, Legal Notice 214 of 2018 was enacted under the Government Lands Act.

The legal notice introduces a forward-thinking new mechanism which contemplates the transfer of rights pertaining to commercial property by title of lease from the Government, from a retiree to that retiree’s own son or daughter.

New Rules on Transfers of Government Property Leased for Commercial Use

Within the scope of the new rules, a person who holds a commercial property by title of lease from the Government or from the Lands Authority, need only apply to the Lands Authority to transfer said right of lease to a son or daughter, given that the lessee would like to retire from their commercial activity of choice.

The conditions of the lease are to remain the same until the expiry of the original lease, with the only element subject to alteration being the name of the lessee – which of course will be changed from that of the retiree to that of the son or daughter.

The rules also contemplate a situation wherein there are multiple children – in which case a single application shall be drafted and the recognised children shall become jointly and severally liable for the obligations imposed on the lessee in the original lease.

Applications under Legal Notice 214 of 2018

Applications made within the ambit of the aforementioned legal notice must be confirmed on oath by the applicant, and any transfers made thereto are subject to the approval of the Board of Governors of the Lands Authority.

The Board of Governors will duly verify that:
i.    No legal or contractual obligations have been breached;
ii.    A sole additional payment, equal to one year’s rent, has been made to the Lands Authority;
iii.    A declaration is made, on the signing of the new contract of lease for the remaining period, that the applicant does not retain any interest in the property or commercial activity following its transfer to a son or daughter; and
iv.    A declaration is made by the new lessee, in the case of a commercial lease granted prior to 1st June 1995 where no specific duration is stipulated, or where the lease period was to be renewed automatically or at the lessee’s sole discretion, whereby the new lessee accepts that the lease shall lapse within a period of twenty (20) years from the 1st June 2008.

All expenses arising from the procedure contemplated within this legal notice are to be paid by the family member to whom the lease is passed on.

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