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Which tariff is 'just right'?

23/12/2014

25 Comments

 
Picture

There is much confusion with regard to which utility tariff should be applied when you rent a property.

Something that should be extremely simple is made extremely complicated.  This is more than likely to be intentional because:  

  • Arms collects more money than it should from tenants living in their primary residences; 

  • letting agents do not have to broker unpleasant negotiations so, in the main, do not give the necessary information to prospective tenants; 

  • most landlords do not want to document the presence of rent paying tenants in their so called empty second properties to enable tax evasion on their rental income.

When you look at the breakdown of the three tariffs it is as plain as anything that there are clear rationales behind each tariff that have nothing to do with the story of Goldilocks and the three bears.  

In other words: expensive, less expensive and least expensive is not what it's about.

This is also backed by a series of Arms adverts in the Times of Malta late last year which stated that "The residential tariff is applicable on the consumer's primary residence."

Plus Article 45, Chapter 4 of the Constitution of Malta states the following:  "... no law shall make any provision that is discriminatory either of itself or in its effect."

Tenants are NOT lesser beings.  Tenants should not pay at the extortionate domestic rate or non residential rate simply because they are tenants.

Please remember:

The
non residential tariff is for businesses

The
domestic tariff is for empty or occasionally used properties

The
residential tariff is the tariff EVERYBODY living in their primary residence should be on.

I've prepared photoscreens of the online Arms calculator showing the cost of annual allowances of  electricity and water at the domestic rate, the residential rate and the non residential rate for 1 person, 2 person, 3 person, 4 person and 5 person households. (see below)

At the residential rate households enjoy reasonable allowances of 1 750 units of electricity PER PERSON per year and 33 cubic metres of water PER PERSON per year at a cheaper rate.  They also enjoy eco reductions if the allowance of 1 750 units of electricity PER PERSON is not exceeded.

The other two tariffs do not incorporate any allowances per person.  There are no eco reductions applied.  

The summary in the file below shows how the cost is broken down at the different tariffs for households of different number of occupants:      
                                    ,


summary.docx
File Size: 17 kb
File Type: docx
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Some interesting points which are immediately apparent:  

  • The overcharge ranges from 43% to 103.4% more expensive.  The average overcharge is 85%.

  • Why should people living in their primary residence be on the non residential tariff simply because their landlord is a company?  Why should these people pay VAT on their utilities, while others living in their primary residences, do not?  Is this distinction allowed under EU law?

  • Why should tenants living in their primary residence, not receive an eco reduction if they are being as environmentally friendly as homeowners?  Is this distinction allowed under EU law?





One person household: 
onenonresidential.png
File Size: 123 kb
File Type: png
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oneresidential.png
File Size: 123 kb
File Type: png
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onedomestic.png
File Size: 123 kb
File Type: png
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Two person household:
twononresidential.png
File Size: 124 kb
File Type: png
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tworesidential.png
File Size: 123 kb
File Type: png
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twodomestic.png
File Size: 106 kb
File Type: png
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Three person household:  
threenonresidential.png
File Size: 125 kb
File Type: png
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threeresidential.png
File Size: 131 kb
File Type: png
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threedomestic.png
File Size: 127 kb
File Type: png
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Four person household:  

fournonresidential.png
File Size: 129 kb
File Type: png
Download File

fourresidential.png
File Size: 130 kb
File Type: png
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fourdomestic.png
File Size: 130 kb
File Type: png
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Five person household:  
fivenonresidential.png
File Size: 130 kb
File Type: png
Download File

fiveresidential.png
File Size: 104 kb
File Type: png
Download File

fivedomestic.png
File Size: 106 kb
File Type: png
Download File

25 Comments
John Hanamy
20/12/2014 01:06:44 pm

Hi all. Yes I totally agree with your campaign against ARMS. I have had an experience with the organisation and the way landlords collaborate with the 'system'. Keeping the electricity and water meters under lock and key so the tenants can't see how much units they are using and thus how big their bills will be.
I have a question for anyone on the site. Is there a standard code for buildings for private rented accommodation in Malta, such as, are landlords required to provide heating for flats, or is it legal to rent rooms with no windows etc? I wonder can anyone help with that? Thank you.

Reply
Rafal
29/2/2016 09:53:50 pm

Hi Johanna

First I'd like to thank you that blog has been created by you. It really helps for all the people coming to Malta and trying to live here. I actually wrote my query to ARMS about our rate electricity/water rate. We are Polish family and moved to Malta last year in April. We live in Attard in the apartment and registered under the Domestic rate which is not right obviously.
I have another question related to renting. We are paying the common parts fee (maintenance, cleaning) 24.00 eur every month. It was not specified in the contract of lease. Can you please advise if there is any institution where we can get a support from or anyone to help us in order to refund that fee.
Thank you in advance.

Regards

Rafal

Reply
Johanna MacRae
3/3/2016 11:24:52 pm

Dear Rafal

I'm very glad that this piece is coming in useful. Do you know there is also an application for redress, Arms Form H1, which you could use to apply for a refund of the overcharge? I'm confident that Arms, the sole, state owned utility billing company will have to play fair eventually - the EU Commission is investigating the Arms/tenant issue and an infringement is imminent.

With regard to the common parts fee, as far as I know, if it's not mentioned in the contract, then, no, you are not liable.

With regard to any institution or body which can help you get your money back, I'm afraid that, as yet, I'm not aware of anything. However, the Small Claims Court or the Rent Regulation Board (not sure which would be the correct jurisdiction) might be of use.

Good luck.

Best regards
Johanna MacRae

PS If you haven't already done so, you may wish to join the Malta Tenant Support Facebook group.

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