From Defective Emphyteusis to Protected Lease

By Dr Carlos Bugeja - Partner

The judgment delivered by the Rent Regulation Board on 27 September 2024 in the names of Maria Sambrina Carbonaro vs Nazzareno Bondin et is a particularly interesting contribution to Maltese lease law because it addresses a recurrent but conceptually difficult problem: whether a juridical relationship initially cast in the form of a temporary emphyteusis, but defective for want of legal form, may nevertheless subsist in law as a protected lease.

The case arose out of a dispute concerning premises in Bormla, where the evidence showed that the relationship between the parties originated in an agreement dated 10 October 1990. By that agreement, plaintiff, acting on behalf of the owners, had purported to concede the property to the respondents by title of temporary emphyteusis for twenty-one years against the payment of an annual temporary cens of Lm80.

The Board held that the agreement of 10 October 1990 had been entered into by private writing and not by public deed, and therefore failed to satisfy the formal requirements imposed by article 1497 of the Civil Code for the valid constitution of emphyteusis, which require such a contract to be done by public deed. It considered the matter apparent icto oculi and expressly held that the writing of 10 October 1990 “ma kkostitwiet ebda enfitewsi bejn il-kontendenti.” In strict doctrinal terms, this finding is uncontroversial. Emphyteusis is not merely a label but a real right requiring compliance with formal constitutive requirements. If those formalities are absent, nullity follows. The Board therefore accepted that the title pleaded by the plaintiffs as having expired after twenty-one years had, in legal truth, never come into valid existence as an emphyteusis.

The next part is where the case turned interesting. Rather than treating the nullity of the emphyteutical instrument as producing a vacuum of title, the Board turned to the respondents’ third plea, namely that even if there was no valid title of ċens, they still enjoyed a valid title of lease under Chapter 69 and the relevant provisions of Chapter 16. This shift in focus is jurisprudentially significant. It reveals a method that is less concerned with the nomen iuris chosen by the parties in 1990 than with the substantive legal quality of the relationship as evidenced by their conduct over time.

In pursuing that inquiry, the Board relied heavily on the evidence that the parties had in practice treated the relationship as one of lease. One of the respondents testified that she and her husband always had a rent book and that, when payment was made, it was entered in that book. The importance of this evidence is obvious. A 'ktieb tal-kera' is not merely a neutral administrative detail; it is one of the ordinary practical indicia by which a locative relationship manifests itself in social and legal life. The Board also took into account the documents produced by the respondents, including receipts in which the payments were described as “kera tad-dar.” Such documents captured the parties’ own treatment of the relationship in the ordinary course of its performance. They strongly suggest that, whatever terminology had been used in the original private writing, the juridical life of the relationship had unfolded as one of rent and occupation rather than cens and emphyteutical tenure. Therefore, the Rent Regulation Board found that, although the 1990 private writing was null and ineffective to constitute a valid emphyteusis for want of the form required by law, the evidence nonetheless showed that the parties had in substance operated a relationship of lease. It accordingly held that the respondents were protected not as emphyteutae, but as tenants under the applicable rent laws.

The Board reasoned that prior to Act X of 2009, a lease did not require special formalities for its existence and could even be created orally, while leases entered into before 1 June 1995 enjoyed the protection of Chapter 69. This proposition allowed the Board to bridge the gap between the invalidity of the emphyteusis and the survival of a different juridical arrangement. Once the Board accepted that the parties’ conduct evidenced a lease originating in 1990, the pre-1995 protective regime became potentially applicable. The legal effect of this reasoning is considerable. It means that formal invalidity in relation to one institution does not necessarily preclude recognition of another institution whose constitutive requirements are materially different and less formal. The Board thus treated the invalid emphyteutical instrument not as conclusive of the parties’ rights, but as part of a wider evidentiary landscape from which the true nature of the relationship had to be inferred. It observed, in substance, that for lay persons lease and emphyteusis may appear similar, and that the use of the language of 'ċens' did not necessarily mean that the parties truly understood themselves to be constituting the technical real right of emphyteusis. It also remarked that it would make little sense to assume that the parties knowingly intended to enter into a juridical arrangement that would be null ab initio and would leave both sides without legal protection. The Board did not say that a failed emphyteusis is always to be treated as a lease. What it did say, in effect, is that where the documentary and testimonial record shows long-standing occupation, periodic payments described as rent, the existence of a rent book, and an arrangement dating from a period in which no special formalities were required for lease, the tribunal is entitled to conclude that the parties’ true legal relationship was one of locatio-conductio. The consequence in this case was decisive: because that lease was traced back to 1990, it fell within the protective orbit of the old rent laws, with the result that the respondents were not liable to the eviction sought against them.

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Dr Carlos Bugeja is Partner at PROLEGAL Advocates.

Disclaimer: This article is not to be construed as being legal advice, and is not to be acted on as such. Should you require further information or legal assistance, please do not hesitate to contact Dr Carlos Bugeja at carlos@prolegal.mt.