What Are the Latest Malta Real Estate Legalities?

Recently there have been a series of innovations concerning legal aspects of Malta real estate. Such changes in the Malta real estate market mainly affect people selling and buying property in Malta or Gozo.  

Trying to make headway amidst a great deal of legal jargon is not so simple for those of us who are not well versed in such necessary detail. So, I ask Dr. Jean Carl Debono B.A., M.A., LL.D., Notary Public & Commissioner for Oaths to explain more about these innovations and how they will be affecting the future of the property in Malta transactions.

Recent amendments to the Notarial legislation

“Recent amendments to the Notarial legislation have been described as a milestone in our profession and their effects are quite widespread, ranging from the modernization of numerous aspects to the clarification of grey areas and introduction of novel concepts. For instance – notaries are routinely entrusted with deposits on the promise of sale agreements and with other monies related to property transfers tax and stamp duty. The amendments have introduced the concept of segregation between monies belonging to the notary in his personal capacity, and monies deposited with him in his professional capacity. Every notary is thus required to open a “Notarial Deposit Account” and keep a register of all this information.”

Compulsory professional indemnity

Dr Debono continues by explaining how the introduction of a compulsory professional indemnity now requires notaries to be adequately insured against all risks arising from professional liability. Whereas in the past most Notaries segregated their funds and also had insurance coverage, introducing these concepts as a legal necessity provides an added peace of mind for both the Notary and more importantly, for the general public.

Notarial corrective act

“On a more technical level, amendments introduce relatively novel practices, such as the case where parties exempt the Notary from reading the contract. The introduction of a Notarial corrective act is another novel amendment. This concept gives Notaries the right to unilaterally make a declaratory act rectifying any errors or omissions contained in their own published acts. Undoubtedly Notaries are to act with extreme caution when utilizing such powers. Furthermore, these Notarial corrective acts cannot in any way affect the intention and consent of the parties given in the original act itself.”

However, Dr Debono points out that perhaps the most significant aspect of such amendments relates to the examination of title and the duty to make a report in specified circumstances. “The aim behind this new regulation is to crystallize what most Notaries effectively do when they examine title. This new regulation thus legislatively defines the standard of diligence that is required from a Notary when examining searches. Whereas lack of clear and specific rules has cast numerous doubts as to the extent of Notarial duty and responsibility, recent amendments clearly define what documents are to be compiled for the examination of title and what is expected from a Notary in order for him to diligently examine a root of title. This will create a standard of practice between all Notaries so they will be deemed to have acted with due diligence.”

“Unless exempted from examining title, a Notary is required to draw up a report in writing. This is very important from the Malta real estate buyer’s point of view since a report shall include the Notary’s advice and a list of documents compiled during the performance of his work. A buyer will thus have a summary of all the findings together with all relevant documentation connected with the property being purchased.”

Buying property legal changes

I ask Dr Debono for his personal opinion on such legal changes…. “As a young Notary, I look forward to other much-needed changes which go beyond these recent amendments and could significantly facilitate and improve notarial work increasing efficiency. Three such changes include:

• the introduction of a common registry for all power of attorneys – this can greatly simplify the revocation and verification of mandates;
• the online registration of deeds and online submission of taxes – this greatly improves efficiency and security in our profession;
• an official online database searches system.”

Purchase of immovable property

Dr Debono appreciates that the purchase of immovable property or real estate can be the most significant investment in people’s lives and from this perspective, the fundamental role of a Notary in examining title cannot be underestimated. “I am sure the new regulations shall help strengthen elements of certainty and independence which are so important for our profession. These amendments shall ultimately improve the perception and confidence of the public in our profession.”