MALTA Law and Practice Contributed by: Damien Degiorgio and Ramona Galea, Fenech Farrugia Fiott Legal
the seller’s property, both present and future; or, otherwise, by means of a special hypothec over other specific property owned by the seller, which is more effective since it follows the prop - erty and not the person. Customarily, the remedies available to a buyer in the event of misrepresentations made by the seller are: • the rescission of the contract of sale; • to restore the parties to the position they were in prior to entering the contract; or • the payment of damages being either pre- liquidated damages or in the form of quan - tifiable damages as agreed by the parties in terms of the contract, subject to the highest applicable interest rate under the laws of Malta at the time (currently 8% per annum in civil matters). The law does not provide any limit as to the amount of damages that may be liquidated in terms of misrepresentation, provided that the amount is considered equitable and just, according to the circumstances, and represents actual losses incurred. In leases, the lessee may demand the annul - ment of the contract of lease together with the payment of damages, if they can prove that misrepresentations or fraud were used to their prejudice in regard to any conditions imposed on a lease. The new lease shall remain operative on the same conditions as the previous lease, at a rent to be fixed following valuation by experts depending on the present circumstances when the conditions so impeached were accepted. 2.6 Important Areas of Law for Investors Most notably, an investor should take cogni - sance of the applicable tax and duty payable on
the type of property chosen and that regulating the transfer of immovable property. Throughout the years, the Maltese government has taken the initiative to lower the duty payable on UCAs and other similar properties, with the intention of preserving Malta’s heritage. It is also recom - mended to refer to the applicable provisions within the Immovable Property (Acquisition by Non-residents) Act, Chapter 246 of the Laws of Malta, which stipulate the necessary conditions that are to be fulfilled by foreign investors acquir - ing property in Malta. Additionally, an investor should also proceed with consulting a notary who will proceed to file the necessary form (Form E) to the land regis - try and carry out all the relevant searches on the property specifically to determine whether a property is in a Registration Area. Such inves - tor will also have the right to know whether the property has never been registered before, or, if it has been registered, whether the property is subject to a hypothec, privileges and/or cau - tions registered at the land registry, and/or any other known fact that may negatively influence the investor’s decision to acquire the real estate. This is regulated under the Land Registration Act, Chapter 296 of the Laws of Malta. 2.7 Soil Pollution or Environmental Contamination Maltese law stipulates that every person shall be liable for the damage that occurs through that person’s own fault. Thus, where a property buyer is not aware of any soil or environmental pollution and has not committed any contribu - tory acts, then such person is exempt from any ensuing responsibility. The same cannot be said for the seller who in bad faith sells the property without disclosing the pollution present.
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