Minister for the Economy and Industry Silvio Schembri has just launched the Lands Authority Scheme in relation to the revision of commercial leases and recognition of heirs upon the demise of the lessee. With around 400 commercial leases on governmental properties which have or are about to expire, the Minister explained how a large number of renewals are on hold in view of the rise in rental value. 

Many of these commercial leases are considered to be family-run businesses with a limited turnover. The minister stated how, ‘through this scheme, as a government, we are seeking to provide an equitable and affordable solution in order to aid all businesses in the current situation. The scheme shall be limited to those leases which have expired and are pending renewal. 

All leases which have expired, are pending renewal or are due to expire in the near future can benefit up to the end of 2023. With the scheme taking into consideration all requests for recognition of heirs up to the end of 2023, the Minister explained that the Lands Authority identified three specific scenarios in which the scheme would be beneficial to owners.

1 – Lease holders with expired leases or leases about to expire (up to the end of 2023) who have either refused new terms or haven’t yet applied for renewal. Commercial leases entered into before the 25th April 2017 and have expired or are yet to do so before 2023 ends, shall be automatically renewed with a standard annual increase of 5% for date of expiry up to first of June 2028. 

2- Lease holders who have accepted renewal and are paying the revised rates, but their lease has expired before the 1st of June 2028. An extension up to the 1st of June 2028 applies, along with refund difference in rates through notice of a credit note and establishing a new rental value of +5%/annum as of the last expiry date. Commercial leases entered into prior 25th of April 2017 and have since expire or shall expire before 2023’s end shall be renewed automatically with a standard annual increase of 5 percent from date of export up to 1st of June 2028

3 – Finally, lease holders who have already accepted the renewal and are paying the revised rates and will have their leases expire after 1st June 2028. Given this context, lease holders can retain current lease agreements, along with current rental rates and relative expiry date, or accept the renewal of commercial leases and revision of rental rates of 2021. In this case, the lease expiry date shall be changed to 1st June 2028.

The minister announced that official letters will be sent to all owners who will benefit from this scheme. He also acknowledged heirs upon demise of the lessee. He explained that the heirs will be recognised and the 5% rental increase per annum will be applied. Finally, the minister also stated, with great satisfaction, that no one will be left behind by the government and that through the scheme, hardships will be eased and businesses will be reached out to. 

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Photo Source: Silvio Schembri FB