Scheme Launched for Extension of Commercial Government Leases

by , on Jun 30, 2021 02:15:04 PM

In a press conference on Thursday 17th September 2020, Minister for Transport, Infrastructure and Capital Projects Ian Borg and Parliamentary Secretary for Lands and Construction Chris Agius announced a new scheme launched under the auspices of the Lands Authority whereby tenants of commercial leases granted by the Government expiring after the end of August 2025 may be renewed for a further 65 years.

The scheme came into force by virtue of Legal Notice 369 of 2020 on the Extension of Temporary Emphyteusis in a Contract for a Commercial Premises Transferred from the Government, the Lands Authority or Ecclesiastical Entities by Title of Emphyteusis which was published under the Government Lands Act on 15th September 2020.

Natural and legal persons who hold a title of temporary emphyteusis on a property transferred from the Government, the Lands Authority or an Ecclesiastical entity which subsequently passed on the title to the government for a commercial purpose with a term that will expire after the 31st August 2025 may request the Lands Authority to rescind the contract and grant a new contract holding a title of temporary emphyteusis.

The term of the new concession will be of 65 years if the term of the concession currently in force is longer than 65 years, with the term of the new contract starting to run from the date of the new contract. The new contract must be done by public deed.

The applicant must satisfy a number of requirements in order to be eligible for this scheme. Firstly, the applicant must prove that the land is required for a commercial project and thus would benefit the economy and generate employment. The applicant would also need to furnish the Authority with a business plan outlining a number of matters including a description of the product and services which shall be offered, the objectives, a description of the market, a justification of the project’s viability, growth potential, and funding requirements. The applicant must also be recognized as the emphyteuta of such land or building, and must give proof that there are no arrears on payment of ground rent.

However, if the subject of the concession is the execution of works, the supply of goods or the supply of services which were run by the State prior to the concession, the applicant is not eligible for the scheme.

When evaluating the new contract, the Authority will appoint architects to carry out the evaluation with regard to the value of the original concession, the period remaining for the original concession to expire, the potential for development, the market value of a similar property and other market indicators, and the condition of the property. The applicant must then pay the entire value as determined by the evaluation to the Authority on the date of the contract.

Along with the application, applicants must submit a number of documents including a copy of the original contract, a copy of the last ground rent receipt of payment, a copy of the property or site plan and photos indicating the state of the property, among others. A fee of €1000 must also be paid with the application.

It is interesting to note that every application must be approved by a resolution of the House of Representatives. Applications will start being accepted on the 5th October 2020.