Ground rent (censu) - legally, emphyteusis - is an annual payment owed on certain Malta properties where the buyer owns the building but pays rent on the underlying land, or where the property was sold on the condition of a perpetual or temporary ground rent.
Why it exists
Ground rent arrangements are common on older Maltese properties, particularly townhouses and older apartment blocks, where developers historically sold units subject to ground rent rather than as full outright ownership.
What buyers should check
- Whether the ground rent is temporary (expiring after a fixed term) or perpetual.
- The annual amount, and whether it is subject to periodic revision.
- Who the ground rent is payable to, and whether it has been consistently paid.
A notary carrying out due diligence on a promise of sale will typically identify any ground rent obligations attached to a property before the final deed is signed.
Redeeming a perpetual ground rent
Where a ground rent is perpetual, the owner has the legal right to redeem it - buying out the rent to become full, unencumbered owner. Redemption is calculated by capitalising the annual ground rent at 5%, meaning the redemption sum is 20 times the annual ground rent. Redemption can be done by agreement with the landowner in front of a notary, or - if the landowner can’t be traced or won’t agree - by filing a schedule of redemption (ċedola) in court.
Sources
- Perpetual Ground Rents in Malta Property - Chetcuti Cauchi Advocates