Gerada et al vs Attorney General — Controlled Rent Violates Property Rights

Family trapped in pre-1914 rent regime wins €88,060 compensation from State for violation of property rights

Prim'Awla tal-Qorti Ċivili (Ġurisdizzjoni Kostituzzjonali) · Hon. Justice Mark Simiana LL.D. · 20 March 2026

The Gerada siblings inherited a terraced house in Żejtun from their father. The property had been rented under Malta's controlled rent legislation — a regime frozen at 1914 rental values — for decades, for which they received approximately €200 per year. The tenancy renewed automatically by law and the owners had no right to refuse. The applicants argued this constituted a violation of their right to peaceful enjoyment of possessions under Article 1 of the First Protocol to the ECHR and Article 37 of the Constitution. The Constitutional Court agreed, finding the State had failed to strike a fair balance between the public interest (protecting long-term tenants) and the owners' property rights, and awarded €88,060 in compensation.

The Constitutional Court found that the controlled rent legislation, which fixed rents at values based on 1914 market rates (adjusted marginally over time), imposed an excessive and disproportionate burden on the property owners. The property — a corner terraced house with a garden in a good location — could have generated at least €1,000 per month (€12,000 per year) at market rent, compared to the €200 per year actually received under the controlled rent regime. The Court held that while the State may regulate tenancies in the public interest, it cannot do so in a way that effectively expropriates the owner's economic rights without fair compensation. The State was ordered to pay €88,060 in compensation, plus legal interest from the date of judgment, plus all legal costs.

• Malta's controlled rent legislation (Ch. 69) fixed residential rents at 1914 values — properties rented before independence could generate as little as €200/year regardless of market value
• Article 1 of the First Protocol to the ECHR protects the peaceful enjoyment of possessions — this includes the right to receive a fair economic return from property
• The State must strike a 'fair balance' between protecting long-term tenants and the property rights of owners — an imbalance that is grossly disproportionate violates the ECHR
• Where controlled rent legislation creates a violation, the Constitutional Court can award financial compensation against the State (Avukat tal-Istat) even where the underlying tenancy continues
• The 2021 reforms (Act XXIV of 2021) gave landlords the right to apply to the Rent Board for increases, but only up to a maximum of 2% — still potentially insufficient to remedy historic violations
• The Gerada case follows a pattern of similar successful constitutional claims by Maltese property owners trapped in pre-independence rent regimes — each case determined on its own facts and compensation level
• Legal costs were awarded in full against the State — the Attorney General must pay all expenses of the constitutional proceedings