MALTA Law and Practice Contributed by: Damien Degiorgio and Ramona Galea, Fenech Farrugia Fiott Legal
6.16 Forms of Security to Protect Against a Failure of the Tenant to Meet Its Obligations Parties to a lease agreement normally agree that the lessee is to pay a deposit upon the signing of the lease agreement, to be kept by the land - lord and used to cover any extraneous expenses which may arise such as property damage. This, however, provides the landlord with only a lim - ited form of security and therefore the parties can agree to other types of security such as the payment of an insurance policy. The parties may also agree to security by surety - ship provided that the contract of lease shall not extend to obligations resulting from the renewal of the lease, if this is the case, or the continued occupation of the property unless the surety has expressly bound themself for the whole time until the lessee vacates the property subject to the lease. The amount and form of the security agreed to must, however, fulfil certain requirements, which will depend on the financial situation of the les - see. In the case of commercial lease agreements, it may very well be the case that the sharehold - ers in a limited liability company offer a personal guarantee other than their assets in the com - pany, given that they would only have limited liability. 6.17 Right to Occupy After Termination or Expiry of a Lease Unless the parties to a contract have included a clause within the agreement granting the ten - ant the right to extend its lease, then it must vacate the property immediately at the end of the lease and return possession of the property to the landlord.
The lessee shall also be liable to remediate any damage or deterioration that may have occurred during the lessee’s enjoyment of the property, either through their own acts or those of any others residing in the property, unless they can prove that such deterioration or damage occurred without any fault on their part. It is worth keeping in mind that, although it is the lessor who is bound to make good any urgent repairs that may arise, it shall nevertheless be lawful for the lessee, without the necessity of resorting to any form of proceedings, to carry out such repairs at the lessor’s expense and also to retain rent on account of any serious preju - dice which may have been caused through the omission or delay of the lessor to carry out such repairs. 6.14 Specific Regulations The Private Residential Leases Act, Chapter 604 of the Laws of Malta establishes specific provi - sions on what can and cannot be included within a lease agreement. In fact, there are a number of clauses that dictate this, and if prohibited claus - es are included then the lease agreement may be declared null and without effect. Such restrictions mainly relate to lease duration, payment of expenses, changes and increases in rent payable, and are generally intended to pro - tect the lessee’s rights. In respect of leases other than residential leases, the provisions contained within the Civil Code regulate the terms included within lease agreements. 6.15 Effect of the Tenant’s Insolvency If the tenant becomes insolvent, the landlord shall have the right to demand dissolution of the lease agreement.
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