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Renting commercial space is a big responsibility — the success or failure of your business may ride on certain terms of the lease. Before you approach a landlord, you should understand how commercial leases differ from the more common residential variety, and before you sign anything, make sure you understand and agree with the basic terms of the lease, such as the amount of rent, the length of the lease and the configuration of the physical space.

Most Important Legal Terms

What is "Di Fermo" Period

A definite period. Will require a tenant to uphold payment of rent for the entire ‘di fermo’ period, regardless of the business’s situation

What is a "Di Rispetto" Period?

A ‘di rispetto’ period will give the tenant the opportunity to terminate the agreement during that period given a pre-stipulated notice as per agreement.

What is the Lease Duration in Malta?

This is usually a 5 year agreement with a 2 (or 3) year ‘di fermo’ period, the remaining 3 (or 2) years being ‘di rispetto’.

What is the Notice Period?

The notice period is the time period between the receipt of the letter of vacating and the end of the last working day within the premises. This time period has to be given to a landlord by his/her tenants before the lease agreement ends. This is not part of the “di fermo period” but is usually placed in the “di rispetto” period part of the contract. A notice period is typically 3 to 6 months.

What is a Security Deposit

The security deposit serves to protect the landlord if the tenant breaks or violates the terms of the lease or rental agreement. It may be used to cover damage to the property, cleaning, key replacement, or back rent. In Malta this can vary from a payment of between 3-6 months rent. It is also know as caution money and is refundable upon lapse of agreement if no damages occur.

Other Legal Terms Glossary

  • Action: A legal proceeding by which one demands or enforces one’s rights in court.
  • Arrears: Overdue rent.
  • Assignment: The transfer of rights or property from one person to another.
  • Automatic Renewal Clause: A provision in a written lease that allows the lease to be automatically extended upon expiration of a term or tenancy.
  • Breach: A violation of one or more provisions of a lease or contract.
  • Contract: An agreement to do or not do a particular thing.
  • Damages: Usually a sum of money awarded to a landlord or a tenant as compensation for a financial loss caused by the other party.
  • Default: A failure to fulfill a legal obligation, particularly payment of rent.
  • Dispossess: Remove a person from land; eviction.
  • Eviction: Dispossession by process of law; turning a tenant out of possession.
  • Expiration: The ending of a rental agreement by its own provisions, i.e. the term of lease is over.
  • Fixtures: Property that is attached or annexed to a structure, such as sinks and light sockets.
  • Judgment: A decision or opinion of the court, usually awarding money damages.
  • Landlord: One who owns and leases real estate.
  • Lease: A contract by which one conveys the right to possession of real estate to another for a designated length of time and usually for a specified monetary rent.
  • Lessee: A tenant under a lease.
  • Lessor: One who grants a lease (landlord or his agent).
  • Liability: The state of being legally responsible.
  • Mitigate: Taking action to make damages less costly or severe.
  • Notice: An oral or written forewarning of a legal event.
  • Notice of Petition to Recover Possession of Real Property: A legal document, often accompanying a petition to recover possession of real property, which informs the tenant of the date, time, and place of an eviction hearing.
  • Parties: Persons involved in a legal contract; the lessor and a lessee under a lease.
  • Premises: The property conveyed in a lease; a building, a house, an apartment, a dwelling unit, etc.
  • Property: That to which a person has a legal title; real estate that one has the legal right to possess, use, and enjoy.
  • Quit: To leave or vacate.
  • Remedy: A legal means to redress grievances or to correct a wrong.
  • Rent: A sum agreed upon between a landlord and a tenant to be paid at fixed intervals.
  • Right to Quiet and Peaceful Enjoyment: Generally reflects the landlord’s promise to the tenant that he/she has title to the premises that allows him/her to rent to the tenant.
  • Security Deposit: Money deposited by a tenant with the landlord as security for full and faithful performance by the tenant of the terms of the lease.
  • Sublease: A lease by a tenant to a third party, usually conveying the leased property for a shorter term than the tenant’s term. The original tenant remains completely liable to the landlord for rent.
  • Tenant: One who holds or possesses premises under a lease.
  • Tenancy: A holding of real property; also, the period of a tenant’s occupancy or possession of premises.
  • Term: The period of time for which a lease is granted.
  • Termination: The ending of a rental agreement by action of either party not resulting merely from the passage of time or from provisions of the lease limiting the term.
  • Utilities: Usually heat, hot and cold running water, and electricity supplied to a premises.
  • Permit: A document granting authority to do something; can be used to authorize a sheriff to physically remove a tenant from a premises.