Reference is made to our previous article entitled 'Sub-Letting of Commercial Tenements After 31st May 2018 – Let it Be!', which dealt with the (then) proposed amendments to article 1613 of the Civil Code. In that article, we gave an overview of the salient provisions contained in the Bill which was being discussed in Parliament.
Following the debate in Parliament on the Bill presented by the Government and following various interventions in the debate, the Bill remained unchanged and the amendments were subsequently introduced by means of Act VIII of 2018. The salient amendments introduced can be reviewed in the above link.
As we wait to see how the procedure introduced by means of these amendments will be put into practice, and how the Rent Regulation Board will be tackling demands brought forward by sub-lessees, it is anticipated at the outset, that problems of interpretation will arise, especially in connection with the issue mentioned hereunder.
It is provided that a sub-lease of a commercial tenement made before 1st June 1995, shall terminate on 31st May 2018, unless the sub-lease was done by agreement with the lessor (proviso to article 1613(1)). This remained unchanged following the implementation of the newly introduced amendments.
However, these amendments, added immediately after the above provision, stipulate that the sub-lessee may demand an extension of the sub-lease in terms of the new provisions and in accordance with the new procedure introduced, in the absence of an agreement between the lessee and the person who is the sub-lessee before the 31st May 2018 (article 1613(2)). It is clear that the reference to an agreement with the 'lessee' in this provision is a glaring mistake and is contrary to the proviso to subarticle (1). It should refer to an agreement between the sub-lessee and the lessor (i.e, the owner of the premises), as otherwise it makes no legal sense.
Nevertheless, given that at the time of writing this mistake has not been corrected, we will have to wait and see how legal practitioners go about this and particularly, how the Rent Regulation Board will apply this provision, considering that, in the way it is currently drafted and if taken literally, it will defeat the whole purpose and intention of these new amendments!
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Jonathan Abela Fiorentino.