MALTA Law and Practice Contributed by: Damien Degiorgio and Ramona Galea, Fenech Farrugia Fiott Legal
their lease conditions. Alternatively, the parties may agree that rent paid by the tenant is to be paid for a fixed term and prior to the commence - ment of such term, thereby protecting the land - lord against default in payment of rent. 7. Construction 7.1 Common Structures Used to Price Construction Projects The most common structures used to price con - struction projects are bills of quantities, where a fixed price will generally be issued to the cli - ent beforehand. If there are significant changes to the costs due, which not attributable in any manner to breaches caused by the contractor, the contracts entered into between the parties would normally include a clause that would regu - late such price change. 7.2 Assigning Responsibility for the Design and Construction of a Project Responsibility for the design and construction of the project is normally assigned by means of the contract of works entered by the parties, and this to the extent provided by law. All parties must ensure that the execution of works on a building are in accordance with the best indus - try practices and standards that also include the respect and protection of the environment and the immediate surroundings, its users and the public in general. Each party shall neces - sarily bear responsibility for their own work: for instance, in every construction project there shall be a “responsible architect” who will assume responsibility for the execution of the project in its entirety. This, of course, does not exclude the liability of the contractor and the builder. Currently, new amendments have been intro- duced by means of Subsidiary legislation 623.06
on the Avoidance of Damage to Third Party Property Regulations requiring that a construc - tion site be covered by a valid insurance policy against any loss, damage, injury or death that may be sustained by third parties consequent to any act or omission done by the construction works undertaken by clients, contractors and any subcontractors or employees engaged. The extent of cover of the insurance policy shall be determined by the insurance contract based on a valid assessment of the risks involved. 7.3 Management of Construction Risk Warranties, indemnifications, limitations of liabil - ity and waivers of certain types of damages may all be used as tools to manage construction risk on a project, to the extent permitted by law. As explained in 7.2. Assigning Responsibility for the Design and Construction of a Project , con - struction projects have to be covered by a valid insurance policy whereby such policy is required to cover a third-party liability limit of not less than EUR750,000 for any loss, damage, injury or death that may be suffered by a third party due to the actions or omissions of the persons involved and responsible for the construction project in question. 7.4 Management of Schedule-Related Risk Contractual parties for the construction of works may choose to include a clause granting the owner monetary compensation should works not be completed by a stipulated date. Such compensation may take the form of daily penal - ties which are imposed on the contractor once works have not been completed at a predeter - mined date.
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