Buying & Selling Property
Legal assistance is provided from the first stage of the promise of sale (konvenju) up to the publishing of the final deed. A preliminary agreement is one by which buyers and sellers bind themselves before the final deed of sale. The vendor promises to sell, while the purchaser promises to purchase and acquire an immovable property, at a specific price within an agreed date, subject to a set of terms and conditions which are found in the agreement. A promise of sale, unless otherwise stated in the agreement, has a legal validity of 3 months. Usually, a deposit of 10% of the selling price is paid by the buyer upon such an agreement. On this konvenju, the buyer is also required to pay provisional stamp duty, which normally amounts to 1% of the selling price.
After the signing of the promise of sale but before the signing of the contract of sale, the necessary searches are carried out by the Notary in order to ensure that there are no hypothecs or debts burdening the property in question and that the sellers possess a satisfactory title for transferring the property. During this period, it is also important for the prospective buyers to follow the steps required for the approval of a loan, in case that they need to take out a bank loan for the purchase of the property.
A date is ultimately set for the final deed of sale to be signed by all the parties concerned, together with the Notary. After the final deed is read and agreed upon, the contract is then published by the Notary and registered with the Public and Land registries.
The same procedure applies with respect to any other inter vivos transfers, whether one is acquiring the property by title of donation, partition, exchange or emphyteutical concession.
Buying Property Foreigners
Chapter 246 of the Laws of Malta regarding the acquisition of immovable property by non-residents distinguishes between a resident and a non- resident (non-EU) person. In terms of this Act, a resident includes a Maltese or an EU citizen who has lived in Malta for at least five years before the acquisition date. Such persons can acquire any immovable property without the need of an AIP permit. If the Maltese or EU citizens do not satisfy this 5 year threshold, they could only acquire immovable property without the need to obtain an AIP permit when purchasing the property as their ordinary residence or for the fulfilment of a business.
An Acquisition of Immovable Property (AIP) permit might therefore be required for persons who are classified as non-residents in terms of the above mentioned Act. A fixed fee of two hundred and thirty three euro (€233) is due when an AIP Permit is issued.
In general, non-EU citizens always need to obtain such a permit and must also satisfy the minimum thresholds fixed regarding property values. However, a number of exceptions apply where non-residents do not require a permit, which include the following:
- The acquisition of a grave or a site for a grave
- The redemption of any groundrent or other burden encumbering the property
- Property devolving causa mortis on a person, wherever resident
- Acquiring property in Special Designated Areas
- Acquiring a further divided or undivided share in a property
- Transfer of property in an inheritance between co-heirs
- Partition of property between co-owners
- Acquisition of property by a company, not being a non-resident, from members holding over 50% interest of its share capital
- Donation of property to spouses, descendant or ascendant in direct line & their spouses and in absence of descendants, to siblings and their descendants
Loans
Whenever a person is taking out a bank loan, the notary comes into play in order to compile all documentation and searches which are required by the bank. Subsequently, the notary will draft the loan contract and any other contract of cancellation of a hypothec should this be a requisite, and after due publication of the contract, the notary will register the hypothecs and/or privileges within those time frames stipulated by law.
With respect to loans between private persons, the notary will similarly draft the loan contract, a contract of constitution of a hypothec or conservation of privilege, as the case may be.
Matrimonial Regimes & Personal Separation
The matrimonial regimes under Maltese law are namely the community of acquests, separation of estates and community of residue under separate administration.
For all married couples under Maltese law, the regime of the Community of Acquests would apply by default, unless the spouses agree otherwise by means of a prenuptial agreement. Essentially, anything that the spouses acquire during marriage will belong to both, in equal and undivided shares and will be administered jointly between them. However, anything that was acquired by each of the spouses separately before their marriage, will remain the sole exclusive property of the husband or the wife.
On the other hand, if the married couple adopt the Separation of Estates regime, anything that a spouse acquires before or after marriage will belong exclusively to and be administered by the said spouse who has acquired it, and the other spouse would have no claim over it.
The least favoured regime is the Community of Residue under Separate Administration (CORSA). Under this regime, anything that the spouses acquire during marriage will be owned separately, but should the marriage be terminated, any residue that is left will be shared equally between the spouses.
If personal separation takes place between a married couple whose marriage is regulated by the regime of Community of Acquests, they would be obliged to split equally all the items which form part of the Community, that is anything that they acquired during their marriage.
Successions - Causa Mortis
Succession is the estate of a deceased person which devolves unto the heirs. This is also more commonly known as transmission “causa mortis” or denunzja. The will of the deceased determines who the heirs are, and in absence of any testamentary dispositions, it devolves ab intestato, and his heirs are therefore recognised by the law itself.
With regards to any immovable property which forms part of the estate of the deceased, a Causa Mortis Declaration is required by law for fiscal purposes. The law establishes that this declaration should be done within six months from the date of death of the deceased, so that the heirs or declarees would be abe to benefit from certain tax rebates and exemptions, and within one year in order to avoid incurring interest on tax.
Wills
A will is a legal instrument through which the testator regulates the way in which his estate is to be disposed of upon his demise. Maltese law distinguishes between various types of wills which can be drawn up, including:
- Public will - a public will is one which is received by a notary public in the presence of two witnesses. Although the contents of such a will remain secret until the date of death of the testator, third parties may be able to know that a person has made a public will as the notary is bound to enrol the public will with the Director of the Public Registry.
- Secret will - this type of will is somewhat antiquated. This will may only be disclosed on the date of death of the testator, and therefore no third party will be able to discover the contents or the existence of this will throughout the life of the testator. Two witnesses are also required for the act of delivery, that is, when the notary delivers the secret will sealed in an envelope by the testator to the Registry of the Court of Voluntary Jurisdiction.
- Unica charta will - this can only be drawn up by married spouses, who may opt for a joint (Unica Charta) will, which is drawn up and received in the same manner as public wills.
Leases
A written lease agreement between a lessor and a lessee creates a clear picture of their respective rights and duties, and therefore helps in avoiding conflicts which may arise in the future. Seeking legal advice from professionals before signing a lease contract is crucial as once it is signed, both parties must abide by the terms and conditions agreed upon.
Following a number of amendments made to the law, it is now an established principle that a lease agreement shall be made in writing. In absence of this, the agreement would be null.
Other
Further instances of notarial services include notarisations, authentication of signatures and documents, giving of oaths & affidavits, power of attorneys (prokura), carrying out searches, applications before the court of voluntary jurisdiction, the drawing up of private writings, and general legal services.