There are three main categories of tenancies for residential properties in Gibraltar which are all governed by the Housing Act. These are:
Government Housing Tenancies;
Pre-war Tenancies (otherwise known as “Protected Tenancies”); and
Fixed Term Tenancies.
Government Housing Tenancies are allocated by the Government Housing Department to individuals who are on the social housing list. These houses are not available to rent privately or be sub-let and can only be occupied by the tenanted individual and their family.
Where a residential property was built before the 1st of January 1945, tenants can be entitled to certain protections under statute including security of tenure for themselves and potentially their family. Where a person has a “protected tenancy”, the Landlord will not be able to charge more than the "statutory rent" for such premises, which can be determined by the Rent Assessor (appointed by the Government) assessing variables of the property such as the condition, size, costs incurred by the landlord in upkeep of Premises and rents that have been assessed on comparable premises. Usually, the rents charged in these properties are much lower than current market rents. There is a relatively simple process in which the Landlord can “de-control” a pre-war flat. By de-controlling the flat, it enables the Landlord to rent it at a market rent, rather than at the set statutory rent.
Fixed Term Tenancies will be mostly applicable to new developments in Gibraltar. There are restrictive covenants on sub-letting in most, if not all, developments which were originally purchased on a 50/50 basis with the Government. As such, persons should exercise caution when renting in these developments to ensure that the Landlord has permission to legally let the property to them.
The terms of Fixed Term Tenancies vary but a Landlord should ensure, at a minimum, that there are obligations on their tenant to comply with the obligations of their Underlease. A tenant should ensure that they are thoroughly aware of the terms they are committing themselves too, and the term in which they are committing too. Usually, a residential tenant will commit to renting a property for between six to twelve months at a time and will continue to be liable to comply with their obligations under their tenancy agreement for the duration of the term of their tenancy.
Commercial Tenancies are governed by the Landlord and Tenant Act.
Commercial Tenants are entitled to security of tenure, which means that even after the termination of a lease they will be entitled to remain on the premises, as long as they continue to pay the rent and meet the obligations of their lease. Prior to the expiration of the lease, a landlord will usually serve a “Notice to Quit”, asking the tenant to confirm within two months of the date of the notice whether, at the date of termination of the lease, they would be willing to give up possession of the premises. The notice must set out whether the landlord would oppose any application to the court (by the tenant) for a grant of a new tenancy and their grounds to their opposition of the application. Commercial landlords (and this includes the owners of shops and offices) are able to oppose an application for a new tenancy and attempt to recover possession of the premises if they are able to demonstrate to the court with evidence that:
the tenant has failed, in their obligations in their lease, to keep the premises in such condition as stipulated in their lease;
the tenant has been persistently late in paying rent;
the tenant has been in substantial breach of lease; or
the landlord needs the premises back for their own business or residence, or for redevelopment.
Even if the court does grant possession to the landlord, a tenant may be entitled to certain compensation.
Commercial and residential landlords/tenants should take legal advice on the legal intricacies of the documents they are entering into prior to committing to a tenancy to ensure that they are adequately protected and aware of the legal obligations they are committing to. Should you require assistance or would like to know more, we at Triay Lawyers would be happy to assist and can be contacted by e-mail at firstname.lastname@example.org or by telephone at +35020072020.