With most people choosing to initially rent, when relocating to Malta, we increasingly find many tenants getting burnt by landlords who refuse point blank to transfer the utilities into the tenants’ name with the occupier being forced into paying the domestic, as opposed to the residential, rate (35-60 per cent more) in cash to the landlord on a monthly basis, with rarely a receipt being given.
Many never see a bill and have to trust that they are indeed being charged accurately, wishing they had known beforehand about the possibly government-approved scam.
I have consistently been asked over the last years whether properties placed as available with estate agents are ‘licensed’ or ‘registered’ for rental and why when licensing is raised with the agents by knowledgeable tenants, the subject is either washed over, with a “yes, yes” or ignored completely.
A licence is only required when leasing to a tourist (a tourist being defined in most cases as staying here or three months or less). If the lessee has been residing in Malta for more than a year, then a licence is not required.
It therefore 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. Lessors would have to register with the VAT and Income Tax Department). However, if you retain the lease after three months, a licence is not actually required because you become a resident.
All holiday accommodation and short lets should be licensed. There are so many grey areas surrounding the licensing or otherwise of long let properties that research gets quite difficult.
It seems to me that all properties for rent should be licensed/registered. It is getting increasingly difficult for prospective tenants to find properties where the landlord agrees to a change of name on the utilities, entitling the tenant to residential rates.
Isn’t it time that agents took a stand on this? Let’s face it, whether you find a property on the first or the 12th showing, the fee is still the same.
When a property is listed for rental, the agent needs to ask if the tenant will be given utilities in their names and only show prospective tenants properties that are listed as such because, often, the tenant finds out after the lease is signed.
It might be a better idea to focus on the tax ‘dodgers’ before targeting the honest wage earner
Without this information being given to the tenant, the estate agents are, in some cases, enabling tax evasion by the property owner.
If estate agents know this happens, don’t they have a duty to inform tenants so this exorbitant costing can be included in the tenant’s budget?
All leases are done on the understanding that the tenant will be responsible for the utilities, which is fine. However, tenants do not agree to pay for overcharged utilities and they need to start adding this condition to the lease agreement before signing.
Many have been oblivious to the fact that they are, and have been, paying the higher domestic rate for many years. These would think usage must be high until they realise it when reading a newspaper or speaking to a neighbour.
Up In Arms advises all tenants in this situation to register with ARMS Ltd as the bill payer as soon as possible.
How is this scam resolved?
ARMS refuses all but the residency permit/e-card as proof of residency, in order to charge the residential rate, which is in direct conflict with EU guidelines.
Many think the overcharging of foreigners in this respect doesn’t gain anything for the country but, trust me, with thousands of people paying 35 – 60 per cent more some gain there must be.
Surely presenting a ‘lease’ to ARMS, which carries the details of the property, the name of the tenant and signed by the owner/agent, should be enough for the company to issue the bills on the names of those residing there.
At present, it is the property (the owner) and not the person that is held responsible for any bills that accrue.
This system smacks of laziness on the part of the provider, ARMS, which insists it is only following government instructions.
A deposit is already required by tenants, so I suggest that a passport number should also be demanded so that if a tenant/customer absconds without paying a bill he can be traced. Perhaps if so much onus was not placed on the landlord, in the case of arrears, they would be more willing to ‘allow’ a change of name.
One may argue that if residential properties were all billed at the residential rate, there wouldn’t be these problems.
The domestic rate was initially designed to rip off foreigners but, in fact, it is increasingly affecting tenants who are Maltese nationals.
Up In Arms members opposed to this overcharging use the ARMS web page calculator and only pay what they are due as a Malta resident. However, many of them end up facing garnishee orders and fighting legal battles, which can take years, for their rights as a resident of Malta to pay the residential rate for their utilities after being sued by landlords for the excess rate, landlords who admit they pay no tax on their income from said residential properties.
There is a lot of talk of an increase in ‘indirect taxation’. However, it might be a better idea to focus on the tax ‘dodgers’ before targeting the honest wage earner.
Other services required by tenants, such as telephone, internet, cable TV and gas, are not subject to such a procedure, so why only utilities?
armsclassaction@gmail.com
www.change.org/petitions/eu-commission-stop-the-discrimination-of-eu-nationals-in-malta
Patricia Graham forms part of Up In Arms lobby group.