TENANTS DO NOT EXIST FOR ARMS JAMES DAVIS

“TENANTS DO NOT EXIST FOR ARMS” JAMES DAVIS, ACTING ARMS CEO, 2013 - 2014

SOME BACKGROUND • My family and I moved to Malta in September 2010. • In August 2013 our landlord took out a precautionary garnishee order on our bank account and my salary because we refused to continue overpaying on the incorrectly applied summer residence tariff, misleadingly named the domestic tariff (number of registered occupants = zero) • December 2014 – I founded Malta Tenant Support • July 2015 – The Small Claims Court final judgement was that my landlord and I had to share the arrears on the Arms bill, then amounting to 1 600 euro. It was agreed (also by the Arms representative) that my family and I were on the incorrect tariff but the court case was limited to who was responsible for the arrears on the bill and nothing else.

THE THREE ARMS TARIFFS • The residential tariff (Number of occupants > zero) – this tariff is meant for people living in their primary residence. The rates per unit of electricity and water are much cheaper. • The domestic tariff (Number of occupants = zero) – this tariff is meant for empty or occasionally used second properties. The idea is that it doesn’t matter if you pay more per unit of electricity and water if you are not going to spend much time in the property, if any. • The non residential tariff is the tariff meant for businesses.

The domestic tariff was always the tariff meant for empty or occasionally used second properties. On the residential tariff, occupants pay On the domestic tariff, occupants pays € 1. 40 per cubic metre of water for the € 2. 19 per cubic metre of water for the first 33 cubic metres of water, no matter how many people live in the property. After the first 33 cubic metres, the cost increases to an eye watering € 5. 14 per cubic metre of water. For a family of 5, 33 cubic metres of water are consumed in 2 to 3 months. On the domestic tariff, occupants do not get an eco reduction, even if their consumption is low. They are also charged more per unit of electricity. allowance of 33 cubic metres of water PERSON per year. This means that a family of 5 would get an allowance of 165 cubic metres of water at € 1. 40 per cubic metre. If this generous allowance is exceeded, then the cost increases to € 5. 14 per cubic metre. On the residential tariff, occupants get an allowance of 1 750 units of electricity PERSON per year at a cheaper rate per unit, below which consumption they also get an eco reduction.

Example: This is the online Arms calculator showing the cost on the domestic tariff - of our consumption of water and electricity over a period of 35 months in our first rental property: On the domestic tariff: Service Charge € 189. 83 Consumption € 3 866. 67 Less Eco Reduction € 0. 00 Total Electricity € 4 056. 49 Service Charge € 172. 31 Consumption € 1 956. 23 Total Water € 2 128. 52 Total Bill € 6 185. 01

This is the Arms online calculator showing the cost on the residential tariff of our electricity and water consumption over a period of 35 months in our first rental property. On the Residential Tariff Service Charge € 189. 83 Consumption € 2 989. 16 Less Eco-Reduction € 693. 99 Total Electricity € 2485. 00 Service Charge € 172. 31 Consumption € 612. 98 Total Water € 785. 27 Total Bill € 3270. 28

Summary of example: (For a consumption of 17670 units of electricity and 417 units of water over a 35 month period) On the Residential Tariff On the domestic tariff: Service Charge € 189. 83 Consumption € 2 989. 16 Less Eco-Reduction € 693. 99 Total Electricity € 2485. 00 Service Charge € 189. 83 Consumption € 3 866. 67 Less Eco Reduction € 0. 00 Total Electricity € 4 056. 49 Service Charge € 172. 31 Consumption € 612. 98 Total Water € 785. 27 Service Charge € 172. 31 Consumption € 1 956. 23 Total Water € 2 128. 52 Total Bill € 3270. 28 Total Bill € 6 185. 01

https: //maltaserv. com/solutions/met ers I must stress that my family’s problems with Arms are not unique. Most of the 3 000 tenants in my tenant support group have been or are on the incorrectly applied domestic tariff. Utility bills are a major reason for tenant distress.

THERE ARE 3 WAYS IN WHICH THE TENANT CAN ACCESS THE CORRECT ARMS TARIFF FOR PEOPLE LIVING IN THEIR PRIMARY RESIDENCE (THE RESIDENTIAL TARIFF): 1. ARMS FORM F – REGISTRATION OF CHANGE IN CONSUMER This form allows the tenant to transfer the account in their name. For this to happen, the tenant needs the permission of the landlord (signature on form and copy of landlord id) and a deposit of 466 euro. https: //www. smartutilities. com. mt/wps/wcm/connect/1 dc 56735 -71 b 4 -4 dc 5 -8521 bc 15 be 795 d 53/F++REGISTRATION+OF+CHANGE+IN+CONSUMER. pdf? MOD=AJPERES

2. ARMS FORM F 2 – TEMPORARY RECOGNITION OF TENANT IN RENTED PREMISES This form was introduced under pressure from the EU. The tenant does not need the permission of the landlord for them to have access to their account. They need to pay a non refundable € 50 application fee and a deposit of € 466. Besides the hefty deposit and non refundable fee, the down side of this form is that most landlords will be angry that there is a paper trail showing the presence of rent paying tenants in their so called empty second properties. Arms Form F 2: https: //www. smartutilities. com. mt/wps/wcm/connect/8 ea 670 dd-73 a 8 -4754 -a 8 f 5 f 97 ca 4 a 0 ac 40/Form+F 2++Temporary+recognition+of+tenant+in+rented+premises. pdf? MOD=AJPERES With both above mechanisms, the tenant has to complete Arms Form H, change in the number of persons declaration, to register all the people living in the rental property.

3. WITH THE PERMISSION OF THE LANDLORD (SIGNATURE ON ARMS FORM H AND COPY OF LANDLORD’S ID), THE TENANT AND ALL OCCUPANTS ARE REGISTERED ON THE ARMS BILL VIA ARMS FORM H, CHANGE IN THE NUMBER OF PERSONS DECLARATION. This does not incur any charge. However, the tenant does not have access to the Arms bill and Arms will therefore refuse to have a conversation with the tenant about the account because of the Data Protection Act. This is problematic – since we became homeowners I have had my Arms bill revised twice (in the first year) because of serious mistakes made with the bill. The account holder in this case would be the landlord. Arms Form H: https: //www. smartutilities. com. mt/wps/wcm/connect/5 a 66 aa 6 f-067 e-46 c 7 -9 c 44915 cb 99 cd 359/H+CHANGE+IN+NUMBER+OF+PERSONS+DECLARATION+31072015. pdf? MOD=AJPERES

THE CRUX OF THIS PROBLEM IS THAT THE TENANT DOES NOT HAVE AUTOMATIC ACCESS TO THE ARMS ACCOUNT • So, as you can see all three methods of accessing the correct tariff for people living in their primary residence are problematic for tenants. Also, something that is not immediately obvious is that it is not in the interest of Arms, the landlord or the letting agent that they allow the tenant to be registered on the Arms bill. • Arms – because they can continue overcharging tenants living in their primary residence • Landlords - because they do not want to have a paper trail showing the presence of rent paying tenants in their so called empty second properties • Letting agents – because they do not want to upset their repeat customers. Tenants are two a penny in this under supplied rental market. Landlords are scarce. So the repeat customers are landlords, even though the tenant pays the same letting agent fee as the landlord (usually half a month’s rent).

SINCE AUGUST 2013, I HAVE TRIED TO ALERT DIFFERENT INSTITUTIONS REGARDING THE DISTRESS CAUSED TO TENANTS BY THIS BILLING SYSTEM • I wrote to the Arms CEO, copied in Konrad Mizzi, then Minister for Energy and the Prime Minister. • I submitted a petition to the European Parliament and a complaint to the European Commission • I submitted a complaint to the Office of the Ombudsman • I wrote to the National Audit Office • Five years later and not much has improved. Arms Form H 1, application for redress and Arms Form F 2, temporary recognition of tenant in rented premises, both introduced under pressure from the EU, have proved ineffective; they pay lip service to the problems caused by this billing system. In the case of Arms Form H 1, application for redress, I was told that the refund would go to my landlord’s account and I would then have to chase him for it.

PREPAID METERS • Arms has completely washed its hands of prepaid meters. There doesn’t seem to be any entity taking responsibility for this. With prepaid meters, the landlord is free to charge whatever rate per unit they want. This is causing much distress. • https: //maltaserv. com/solutions/meters - this company fits prepaid meters. Below is an excerpt from their website showing that the landlord is free to set whatever rate they want, even though the landlord will be billed by Arms in the usual way. • How does this work? • Just like a mobile phone, this meter will accept pre-paid cards, which only cost you a few cents each, covering the actual cost of the card. You however sell the cards to your guests at the printed face value (EUR 10, EUR 20 or other values by special order). They insert the card/s into the meter, which will then supply them with a number of electrical units (Kw. H), as per the adjustment you choose. As the electricity gets consumed, your guests will eventually need to purchase further cards from you to assure that their supply is not cut off. The cards can only be purchased from us, by you, it is not possible for your guests to obtain cards directly from us or any other sources. • How is the meter installed? • The meter is very easily installed in the apartment/house generally in one of three ways: as a sub-meter for all the property's electricity consumption; as a meter on a separate circuit, usually the circuit where airconditioning and heating units are installed; or as a meter for a single appliance such as an individual air-conditioning unit, or maybe even a washing machine. The latter fitments enable you to offer airconditioning/washing machine as an option available against separate payment. This is a very popular way of fitting the meter/s. You will of course still receive Enemalta’s bills; this sub-meter does not interfere in any way with Enemalta’s metering or billing. The difference now is that you will have collected the money to pay your bills, in advance! Not only, but you can adjust the rate per unit as per your requirements, such that you would be “re-selling” the electricity at a reasonable rate above cost, to cover the initial cost of the meter and the disposable cards, the wear and tear of equipment such as air-conditioning units, and Enemalta’s service charge. Thus over time, not only does the meter offer peace of mind, but it pays for itself and all your running expenses!

LAW OF THE JUNGLE - LANDLORDS SEEM TO THINK THAT THEY CAN TAKE THE LAW INTO THEIR OWN HANDS AND CUT OFF THE ELECTRICITY SUPPLY In this particular case, a tenant asked for help with her landlord. For completely unforeseeable reasons, she was not able to pay all the rent. The landlord removed the door from its hinges and cut the electricity supply.

SOLUTIONS • Make sure there is only one way for tenants to be billed at the correct tariff. • Make sure that it is not discriminatory. Homeowners do not need to pay a deposit, let alone for 466 euro. Some countries do specify a deposit but it is ALL consumers – tenant or homeowner - who have to pay this. In the UK, no one pays a deposit. • Tenants MUST have access to their Arms accounts. There must be no barriers for this to happen. No need for landlord permission or signature or a copy of landlord id. No application fee or deposit.