Disclaimer: buying property anywhere is a complex process. Mistakes happen. Is there a locality in the world where property is always a good investment and no problems ever crop up? Not that we know. In fact, in our experience, some of the most reputable, transparent countries feature tough and peril-fraught transactions.
We have listed here are some common pitfalls buyers will find when looking for property in Malta. We hope it helps you to keep them in mind, and naturally, you can always contact us if you’d like our expertise by your side.
“Someone else” is interested
Does it strike you as odd that every time you see a property, another “interested buyer” is literally ready to sign the promise of sale? That a buyer rang five minutes ago and is coming to see the apartment later in the day? Coincidence?
This trick is a classic – to the point that even non-professional sellers will try and pull it off. It plays on one innate human bias: the fear of missing out. It is the same behaviour that makes Apple shares shoot to the sky when they announce some good news. You’ve just got to get on the train before you miss out.
True, good deals exist and they go fast. That’s why it is important that you keep your budget in mind (including post-purchase expenses) and have a sound idea of how much the property is actually worth – a property valuation exercise. That way, you won’t ever get suckered into paying €300,000 for a flat that’s worth €250,000.
Sorry, no warranty
Don’t we love renovations? That old apartment, farmhouse or townhouse will look beautiful once you get the stone clean, and the sanded beams will look just fantastic.
The problems come up once you pay up and get the keys. Those beautiful beams, it turns out, were rotten at the ends and have to be replaced. The paint was hiding broken slabs – replacing them means taking off part of the roof. The house will look beautiful all right, if your budget stretches that far.
Unfortunately, the contract of sale for any property to be renovated is likely to include a clause that exonerates the seller for any latent defect. It is crucial to have the property inspected by an independent expert before you sign anything. The advice will pay for itself twice: in peace of mind, and as a negotiating tool.
They want to sell. No they don’t. Yes they do.
If we had to pick our least favourite pitfall, this would be the one. And a very Maltese pitfall it is. Why is it the plague of all plagues? Simple: because is only through time, dedication and hard negotiating work that you’ll go through it.
It often happens: ten, twenty, thirty heirs to a property (we’ve had up to near the hundred) decide they want to sell their great-aunt’s property. Except there’s one, the holdout, who doesn’t want to. You won’t know beforehand, not from the selling agent and not from the family member you deal with. But the defector will turn up. His or her complaint will be different every time. It might be the money, that he/she wants to buy it for themselves, that there is a minor clause in the contract they do not agree with. Either way, you’re stuck.
Yes, because in Malta it works like this: either all the co-owners agree to the terms of the sale, or the owners representing the majority of the share need to take the holdouts (even if they own a tenth of one percent!) to court. It’s an oversimplification, but that’s the idea. And it will take months for the case to close, if the family is even open to going to court. Sometimes the defector is just looking to get some “pocket money” from you, behind their family’s back. Think carefully before moving ahead in this type of situation.
You paid, and now you can’t do what you wanted
This one falls in the “didn’t do your research” bucket. It most typically has to do with not thoroughly checking what is and what is not permitted in your local plan: how far up you can build, what alterations you are allowed to make (in some cases, very little), and very very important: what others are allowed to do in that area. Why is it that every time you ask about that grassy field behind the property the reassuring response comes: don’t worry, they can’t/won’t build there. Right. Except they often can, and will.
The bottom line is: you have to do your homework, because no one’s going to give your back your money when the “guaranteed view” goes away or the Planning Authority says you can’t convert the garage into a shoe shop. In doubt, always better to ask an independent architect.
Defects in planning, title or tax position
I’m going to make a public confession: when I bought my first property in Malta, my very own residence, I mistakenly paid more than twice as much stamp duty as I should have had. Why is that? Well, the property was in a Urban Conservation Area, and in addition it was a scheduled property. Thousands of euros were going to make their way back into my pocket. Great, right? Except no one told me, not the architect, not the agent. Little wonder, since none of them had the duty to tell me. I discovered it myself, and thankfully many months later a cheque branded “Central Bank of Malta” made its way into my mailbox.
Aside from the notary, who has a duty to check for defects in title (basically, that who’s selling to you has the right to do so), the tax position of the property and the conformity of the property with planning regulations is up to you to work out. When you want to resell the property and find out that a defect in planning had not been sanctioned, you will be the one to pay for someone else’s mistake. Again, better have an independent architect triple-check everything for you. It pays for itself.
Did we leave anything out?
We’d love to hear from you if you have any feedback or we’ve left anything out. Please contact us anytime.