Article 1494 of the Civil Code of Malta (Chapter 16 of the Laws of Malta) defines emphytheusis as follows:
“The emphyteusis is a contract by which one of the contracting parties grants to the other, in perpetuity or for a time, a property for a determined annual rent or land rent that the latter is obliged to pay the former, either in money or in kind, in recognition of possession “.
Emphytheusis is typical of continental (European) law and not English law. It is very different from leasing or renting a home or land. This is because, unlike leasing, emphytheusis is a real right that is attributed to the land that is hired and not to the person who hires it. On the other hand, the lease, being a personal right, does not bind the land or the house that is granted, but only the person who receives the lease. The legal implications arising from these differences are considerable, especially with regard to the rights and obligations of the contracting parties.
The Enfiteusis contract must be made by public deed before a Notary Public. It would be null if it were done by private deed. The lease, on the other hand, may be entered into by private deed and will have the force of law. The lease agreement cannot be changed during the lease period. Once the land rent is established, it cannot be changed.
Article 1494 provides three key phrases that need to be clarified:
I. perpetuity or for a time
There are two types of empitheutic concessions: perpetual emphytheusis and temporary emphytheusis. The first is a payment that must be made annually with the legal option of reimbursement. The redemption leaves the land in absolute ownership. Temporary emphytheusis, on the other hand, is a multi-year contract. (Generally, in Malta, the most popular number of years hired is 17 years, 21 years, 99 years and 150 years).
ii. declared annual rent or land rental
The canone or rental of the land must be included in the contract, under penalty of nullity, and must be paid annually to the dominus, that is, to the owner of the house.
iii.
The utilist recognizes that he can legally enjoy that property and must recognize the dominus as the real owner of said property.
The emphyteusis contract is a sui generis contract whereby the dominus, who is the true owner of the property, is temporarily stripped of all property rights. Said rights and obligations are transferred to the “utilist”, the person who enjoys said concession, during said period. At the expiration of the contract, the property, with all the improvements that have been made, will return to the dominus and there will be no right to extend the Enfiteusis.
In the old days, landowners used to grant emphytheusis to farmers who tended the land. Sometimes the agreement would be that in recognition, instead of paying money, the farmer would give the dominus part of the product, crop or fruit produced by that land.
The property rights and obligations are, during the execution of the Enfiteusis, conferred on the utilist and not on the real owner. Article 1507 establishes that the utilist is obliged to comply with any obligation imposed by law on the owners of buildings or land. This shows the responsibility of the utilist in terms of the maintenance of the property. You must treat that property as if it were your own. However, if there is a considerable expense in the fulfillment of such obligation, the utilist may request before the First Chamber of the Civil Court to demand that the dominus be obliged to contribute a part of the expense. In this case, the court will take into consideration, mainly, the Enfiteusis contract entered into by the parties, the remaining period of the concession, the amount of the land rent and other circumstances relevant to the claim.
The utilist has a very broad right to dispose of the property held under Enfiteusis; You may dispose of the emphyteutic estate by public deed that may be an inter vivos act, that is, carried out during your life, or causa mortis, that is, carried out after your death, in this case, by will. The utilist can sell the Enfiteusis to a third party for a certain amount of money. Obviously, it will sell the remainder of the emphyteutical period. In addition, he will be able to re-assign the property under Enfiteusis, known as subenfiteusis, in which case he will receive a rent from the land himself.
Such alienation of property does not require the permission or consent of the dominus, in any case. In addition, the rights and obligations of the utilist, at the time of transfer, will be transferred to the new utilist or subenfiteuta. The latter will only become the new utilist after the dominus recognizes him. Unless the new utilist is known to be incapable of meeting his contractual obligations, the dominus cannot refuse to acknowledge him. In cases where the dominus refuses to recognize the new utilist, the latter will continue to be personally linked to the first by paying the rent for the land.
During the period of validity of the Enfiteusis, the utilist has the right to ‘alter the surface of the dwelling, as long as it does not cause any deterioration in it’ (article 1506 (2)). Therefore, if the utilist wants to build more or add more to existing structures on the ground, he can do so. Additionally, you are entitled to any “hidden treasure” that you may find on said property. The dominus has no right to share.
Once the Enfiteusis has expired, the user is obliged by law to return the land or property with all the improvements made throughout the years in which the property was under Enfiteusis.