The regulation of short-term rental – Regulation or Restriction?

Share this post
Related Practice Areas
Dispute Resolution
Related Industries
Real Estate
Geography
Malta

Malta is currently engaged in a national debate over the regulation of short-term rentals. As in many other countries, Maltese authorities are grappling with how best to manage this burgeoning market. Proposals range from moderate regulatory measures to more extreme options, such as an outright ban.

Article 17 of the European Union Charter of Fundamental Rights guarantees the right to own, use, dispose of, and bequeath lawfully acquired possessions. It further stipulates that this right may only be restricted for the benefit of the public interest and if such restrictions are regulated by law and deemed necessary for the general interest. This raises an important question: can state intervention in property use—in this case, short-term rentals—be justified as necessary for the general interest, or does it infringe upon the fundamental right to property?

Under current regulations, properties intended for short-term rentals in Malta must be registered with the Malta Tourism Authority (MTA) and obtain the necessary licensing. Compared to other EU countries, Malta is already quite advanced in regulating short-let rentals through this registration process.

The proposed new regulations, however, take a more restrictive approach. They would require properties, namely apartments, to gain the approval of the majority of condominium members, with such approval needing to be renewed every three years. These measures are being justified by local authorities as necessary to address issues caused by tourists, which negatively affect residents. Notably, the proposed framework includes safeguards, such as allowing property owners to appeal decisions, which aim to mitigate potential unfairness or misuse of authority.

Whilst regulatory change is warranted, it is crucial to acknowledge the significant dependence of many households on income from short-term rentals, particularly given the rising cost of living.

It is worth considering alternative measures before imposing significant restrictions on individual property rights. For example, better enforcement of existing registration and licensing requirements could address the issue of unregulated properties.
As of 2023, the MTA had issued approximately 5,700 licenses for short-let properties, yet over 10,000 properties were listed on platforms such as Airbnb. This discrepancy highlights a pervasive problem of non-compliance in the market.

The intentions of local authorities are commendable, and there is a clear need to address the challenges posed by short-term rentals. However, it would be prudent to draw lessons from the experiences of other countries, carefully evaluate the potential consequences, and adopt measured approaches that respect property rights while achieving the desired public interest objectives.

Davinia Cutajar
About the author

Davinia Cutajar

Davinia Cutajar is a partner at WH Partners and the international secretary of the Malta Chamber of Advocates (Il-Kamra tal-Avukati) and an Officer of the International Bar Association (IBA)’s Negligence and Damages Committee. Her main areas of practice are dispute resolution and corporate law. She also advises on corporate governance and AML compliance.

Learn More
Emma Mifsud
About the author

Emma Mifsud

Emma is a trainee lawyer who joined the firm in the summer of 2023.

Learn More

Related Articles

Scroll to Top