With most people choosing to rent initially, when relocating to Malta, more and more we find tenants being burnt by landlords who refuse point blank to transfer the supply of electricity and water into the tenant’s name, meaning the tenant is forced into paying the domestic rate (which is between 30 and 65 per cent higher) as opposed to residential, in cash to the landlord on a monthly basis, with rarely a receipt. 

Many never see a bill and have to trust that they are indeed being charged accurately, wishing they had known beforehand about the possible government-approved scam that exists.

I have been asked consistently in recent years if properties advertised as available with estate agents are “licensed” or “registered” for rental and why, when the subject of licensing is raised by knowledgeable tenants with the agents, it is either brushed aside with a “yes, yes”, or ignored completely. 

These are the facts: A licence is only required when leasing a property to a tourist (defined in most situations as relating to a period of three months or less) and if the lessee has been residing in Malta for more than a year, then a licence is not required, so it seems that if you take a lease on a property, you are a tourist for the first three months and the property should be licensed (and therefore taxed, and lessors also have to register with the VAT and Income Tax Departments) but if you remain with the lease after three months, a licence is not actually required as you are a resident.

All holiday accommodation (short lets) should be licensed but there are so many grey areas surrounding the licensing or not of long-let properties that researching the situation is quite difficult.

It seems to me that all properties for rent should be licensed/registered. It is actually getting more and more difficult for prospective tenants to find properties where the landlord will indeed agree to a change of name for the provision of all utilities, thus entitling the tenant to residential rates.

Is it not time that agents took a stand on this? After all, whether you find a property on the first showing or the twelfth showing, the fee is still the same. 

When a property is listed for rental with an agent, that agent needs to ask if the tenant will be provided with utilities in their name, and only show prospective tenants properties that are listed as such, because many times the tenant finds out after the lease is signed. One could say that, without this information being passed on to the tenant, the estate agents are actually (in some cases, not all) enabling tax evasion by the property owner. Whichever way you look at it, estate agents know this happens, so do they not have a duty to inform prospective tenants so at least this exorbitant cost can be worked into the tenant’s budget?

All leases carry the agreement that the tenant will be responsible for utilities, which is fine, but tenants do not agree to pay for the overcharging of electricity and water and need to start adding this fact to the lease before signing.

Many tenants are quite oblivious of the fact that they are – and have been for many years – paying the higher ‘domestic’ rate. They simply believe that their consumption must be high, until one day they read a newspaper, or they talk to a neighbour and find they have no comeback. 

The Up in Arms group advises all tenants in this situation to register with ARMS as the bill payer at their address as soon as possible.

So how can this scam be resolved?

ARMS will only accept the residency permit/e-card as proof of residency, in order to affect the change from ‘domestic’ to ‘residential’ rate, which is in direct conflict with EU guidelines. Many people think that the overcharging of foreigners in this respect does not gain anything for the country but, trust me, with thousands of people paying 35 to 60 per cent more for their water and electricity, someone must be gaining something.

Surely, presenting ARMS with a lease that carries the details of the property and the name of the tenant and has been signed by the owner/agent, should be enough for all the utility companies to issue bills in the name of whoever is residing there.

Currently, the property (the owner) and not the person, is responsible for bills accrued. This system smacks of laziness on the part of the provider, ARMS, which insists it is only doing as instructed by government. A deposit is already required by tenants, so I suggest a passport number is also required so if a tenant/customer absconds without paying a bill, they can be traced. Perhaps if not so much onus were placed on landlords in respect of arrears, they would be more willing to ‘allow’ a change of name. 

Of course, it can be argued that if residential properties were all billed at the residential rate, these problems would not exist. The domestic rate was initially designed to rip off foreigners, but more and more it is actually affecting the Maltese national tenant.

Members of the ‘Up in Arms Group’ against this overcharging use the ARMS web page calculator and pay only what they are liable for as a resident of Malta. However, many of them end up with their bank accounts garnished, and fighting legal battles (that can go on for years) over their rights as a resident of Malta to pay the residential rate for their electricity and water, having been sued by landlords for the excess (domestic rate) who fully admit that they pay no tax on their income from such residential properties – and brag about it.

There is a lot of talk of an increase in “indirect taxation” that will affect everyone. It might actually be a better idea to focus on the “tax dodgers” before targeting the honest wage earner.

Other utilities and services required by tenants – such as telephone, gas, internet and cable – are not subject to this procedure, so why are electricity and water?

Patricia Graham 'Up in Arms'

For and on Behalf of Arms Class Action Group, ‘Up in Arms’

[email protected]

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