The Malta Development Association (MDA) refers to the article published by Times of Malta titled “Renters lose hundreds in deposits for flats they never occupied” and the related public statements by the tenants’ union, Solidarjetà.
While the MDA fully support efforts to promote a fair and transparent rental market, we strongly object to the one-sided portrayal of landlords which ignores the systemic issues landlords themselves routinely face and mischaracterises the legitimate use of pre-contractual deposits.
It is worth explaining that a pre-contractual deposit is not a hidden trap or exploitative tactic but ratherit is a standard practice in both local and international rental markets. Its primary purpose is:
• To secure a commitment from the tenant while the formal contract is being finalised.
• To protect the landlord from losing potential income or other tenants during this waiting period.
• To ensure the property is held exclusively for the prospective tenant, often leading the landlord to turn away other interested parties.
If tenants were allowed to unilaterally change their mind after the landlord has withheld the property from the market, the landlord would bear the full financial and practical burden of this indecision. In such cases, the only remedy available to the landlord is the retention of the deposit which is a basic pre-agreed upon form of compensation for lost opportunity and wasted time. It’s also worth noting that an agreement can also be signed regulating the terms of this type of deposit.
Contrary to the narrative presented, landlords are also regularly exposed to irresponsible and opportunistic behaviour by tenants or prospective tenants in the various stages, including:
• Before contract signing: Tenants often pay a deposit and then change their mind, sometimes due to frivolous reasons, gossip, or personal circumstances. This leaves the landlord with vacant periods, unearned rent, and a loss of alternative tenants who were refused.
• During the lease term: Even when a fixed-term lease is agreed upon, the law currently permits tenants to terminate early for any reason, causing contractual uncertainty, financial disruption, re-letting delays, and higher costs.
• Following the termination of the lease: Tenants leave properties without providing a forwarding address, often leaving behind damage, unpaid utility bills, or rent arrears. In these cases, landlords are left without any realistic legal remedy, as they cannot trace the tenant to initiate recovery proceedings.
These are not rare occurrences but they are part of the daily reality of Malta’s private rental market. Any discussion of tenant protections must equally consider the risks borne by landlords, who often operate in good faith and with no comparable avenues for redress.
The reported cases in the article, while unfortunate, reveal a lack of documentation, legal clarity, or engagement with licensed intermediaries such as Real Estate Agents. None of the cases described involve a signed lease, a formal deposit agreement, or oversight by a regulated estate agent. This absence of structure undermines the credibility of the claims.
The solution is not to vilify landlords, but to encourage all parties to formalise pre-contractual steps.
The MDA notes the suggestion to create a central deposit-holding system or escrow mechanism. Escrow systems cannot function fairly without defined contract terms and mutual obligations. Applying such a system to pre-contract scenarios often fluid and informal would risk bureaucratising or paralysing an already sensitive and time-critical process. Furthermore, many disputes arise from a lack of formal agreement, not from the method of payment or where funds are held.
In conclusion the MDA strongly believes that tenant protections should be reinforced but not at the expense of fairness or at the cost of demonising landlords. The vast majority of landlords and estate agents in Malta act professionally and responsibly. The same standards must also be expected of tenants.
A functioning rental market relies on clear written agreements at all stages of the transaction and balanced legal protections that recognise the risks and rights of both parties.
We call on public stakeholders, the media, and tenants’ unions to engage in constructive dialogue and avoid generalisations that harm the sector’s reputation. The MDA remains committed to working with all parties to promote higher standards and practical improvements to Malta’s rental system.