A brief overview of Expropriation Legislation
Expropriation in simple terms is the mechanism by which the government acquires private property for the benefit of the public, often against the wishes of the owner.
Five years ago, on the 25th of April, the Government Lands Act came into force by way of ACT XVII of 2017 which replaced the outgoing Land Acquisition (Public Purpose) Ordinance. The new act sought to regulate amongst others this mechanism of land acquisition and to establish the procedure that shall be followed related to this acquisition. The enactment of this act also introduced a fresh set of remedies intended to provide landowners with specific courses of action for problematic situations existing prior to the entry into force of this Act, however, the right to take action may no longer be possible within less than two months from the date of this article. To be specific, the first deadline to institute an action comes about on the 24thof April 2022.
Whilst on the face of it, expropriation may appear to breach an individual’s most basic human right, this process does not come without its various checks and balances. The right to property in Malta is secured by article 1 of the First Protocol of the European Convention on Human rights which holds that no person shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law. Our Constitution on the other hand, whilst not securing a right to property per se,provides for the protection from deprivation of property without compensation by way of article 37. The Constitution guarantees that if a property has been compulsorily taken possession of, then the owner is entitled to the payment of adequate compensation; a right to contest such compensation in front of an independent and impartial court or tribunal, as well as a right of appeal therefrom. Thus from these two articles, it is deducible that the right to property can be limited when it is in the public interest as long as adequate compensation is given.
What is the Public Interest?
The European Convention gives states a wide margin of appreciation in determining what is in the public interest and this very question has also been the subject of interpretation in many local cases. The Land Arbitration Board, which is the competent forum which determines and decides on cases relating to expropriation, refers to the aforementioned Government Lands Act to determine whether the expropriation at hand falls under such definition, which, in turn, provides a non-exhaustive list. of what shall be construed as in the public interest.
What type of acquisition can the government make?
The Government may acquire any land required for a public purpose either by way of ‘absolute purchase’, or alternatively, for the ‘possession and use’ thereof for not more than ten years.
In the past, the government could also acquire property by ‘public tenure’ which was often assimilated to by our courts to a perpetual emphyteusis whereby the landowners were recognized by the government as owners but possession was retained by the government, for which a negligible recognition rent would be given to the owners.
How does the Government acquire property?
The Government Lands Act gives authority to the Chairperson of the Board of Governors of the Lands Authority, who may, by declaration signed by him, declare any land to be required for a public purpose. Such declaration shall then be published in the Gazette and also published for at least once in two daily or Sunday local newspapers containing well-defined details to identify the land that is being acquired for public purposes whilst also mentioning the public purpose for which such land is being required. The declaration shall also state the amount of compensation which the authority is willing to pay for the land to which the declaration refers.
In the case of acquisition of land for ‘possession and use’, the Government Lands Act holds that the declaration shall indicate the number of years during which the land shall be kept by the authority, as long as that period of time does not exceed ten years, and it shall specify the whole amount of compensation that the authority is willing to pay as an acquisition rent for all the years that the land is going to be kept.
Prior to the enactment of the Government Lands Act, the declaration mentioned used to be issued by the Governor General of Malta or by the President of Malta which for transitory purposes shall still be considered to have been validly issued by the competent authority for the purposes and effects of the law.
If no contestation is made, the authority shall have the right to enter the land and take possession thereof. Within fifteen days from when the time for contesting elapses, the authority shall subsequently deposit the compensation due in an interest-bearing bank account after which the absolute ownership of the land is then transferred to the Government.
At this juncture, it is pertinent to point out that the Government, before the coming into force of this Act had to follow a different albeit a quite similar process involving a declaration, and a subsequent ‘notice’. This procedure has many times over, not been properly adhered to by past legislations and as a consequence, in the present day, we have a situation whereby the authorities have commenced the process of expropriation without completing it. As a result, we have a disorganized situation leading to various complications and uncertainty for landowners. To name a few scenarios, there are landowners who have been dispossessed of their property without a declaration. There are other situations whereby a declaration has been validly issued however the absolute acquisition was not followed through. Another scenario exists whereby the declaration has been validly issued with agreement taken place but property not acquired and thus the compensation has not been given. There are also landowners whose land has been occupied by ‘public tenure’ and others whose land has been taken for ‘possession and use’ over which the maximum ten year period has expired.
What rights do expropriated landowners have?
The Government Lands Act provides a number of remedies which vary according to the specific situation of the landowner.
First and foremost, adequate compensation is guaranteed right. However, the type of compensation awarded to a landowner is dependent upon the modes of acquisition through which the land was acquired for its expropriation.
In cases where the authority expropriates the land by way of ‘absolute purchase’, the landowner would be eligible for compensation according to the value of the land if sold in the open market by a willing seller voluntarily. In cases of expropriation for ‘possession and use’, compensation shall be established in accordance with the amount which the land, if leased in the open market by a willing owner might be expected to realize.
If the expropriated land has not yet been properly acquired, landowners can demand that this process is finalized, be given their compensation or alternatively have the land to be returned to them.
Landowners who institute a case in front of the Arbitration Board may also request moral and material damages as well as simple interest over the final compensation liquidated.
Are there any time limits for expropriated landowners to exercise such rights?
Our Civil Code holds that all actions, whether real, personal, or mixed, are barred by the lapse of thirty years, in fact, some of the remedies mentioned above have the same 30-year prescriptive period. This notwithstanding, our law also provides for shorter time prescriptive periods for other actions.
To contest whether the acquisition is done for a public purpose, the landowner must act within the first fifty days of the issuance of the declaration.
To contest the amount of compensation, expropriated landowners have five years from the date the declaration by the chairperson of the Board of Governors of the Lands Authority has been published.
Landowners whose land has been occupied by ‘public tenure’ have until April 24th of 2027 to submit their action.
Referring back to the conglomeration of problems left by past governments, the Government Lands Act gives landowners whose declaration has been issued prior to the 25th of April 1992 only till the 24th of April 2022 to commence their action. This is applicable to those who have not received ‘Notice to treat’ or an offer for compensation and also where no deceleration has been issued.
Failing to take action will mean that the landowner will only be afforded the right to the compensation deposited in the manner explained above (if any at all).
The introduction of this act was intended to minimize litigation before the courts, especially owing to the fact that the government and its entities often ignored the provisions of past legislation and dragged their feet when it came to giving landowners their dues. It is undeniable that the previous legislation brought about problematic circumstances and the rights of landowners have been violated for decades. Whilst the promulgation of the Government Lands Act saw the establishment of new remedies which brought about more legal certainty, we are yet to see whether the five-year prescriptive period will be challenged as even at Parliament stage, many have raised their concern that this could lead to the limitation of citizen’s rights and possibly be rendered discriminatory and unconstitutional. What is certain is that it is better to act now as tomorrow might be too late.
Originally Published 03 March 2022
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.