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In 2013, I submitted a petition to the European Parliamentary Committee of Petitions and a complaint to the European Commission with respect to the Arms / tenant scam. I did this soon after it became apparent that Arms was not going to do anything about overcharging tenants as a matter of course. As it happens, neither was the Office of the Ombudsman or the National Audit Office. Impunity reigned and Arms continues to overcharge tenants to this day.
Like a star struck groupie, I felt sure that the EU would come to the rescue of tenants living in Malta. I do have an unfortunate tendency to put everyone and everything high on a pedestal initially, only for them to come tumbling down soon after. Whilst my petition was discussed twice during two sessions of the European Parliamentary Committee of Petitions, and whilst pressure was applied to the Maltese powers that be, five years later and still most tenants are overcharged on their consumption of water and electricity.
This is my last correspondence with the EU on the Arms / tenant scam. I've done all I can. I've exhausted all avenues that I can see.
From: johanna axisa1 <email@example.com>
Sent: 20 August 2018 20:06
Cc:firstname.lastname@example.org;email@example.com; firstname.lastname@example.org;email@example.com; firstname.lastname@example.org;email@example.com;firstname.lastname@example.org; email@example.com;firstname.lastname@example.org; email@example.com;firstname.lastname@example.org; email@example.com;firstname.lastname@example.org; email@example.com
Subject: Petition 1737/2013; CHAP 2013(2750)
Dear Secretariat of the Parliamentary Committee of Petitions
I am writing to protest - in the strongest possible terms - against the conclusions of the European Commission in their Notice to Members of the 29/6/2018 (please see attached). These are the conclusions of the European Commission:
“The Commission is satisfied with the changes implemented by the Maltese authorities. The additional documents sent by the petitioner in March and November 2017 do not include information which could induce the Commission to change its assessment.”
I would like somebody from the European Commission to explain clearly why the following articles of the TFEU and the Energy Efficiency Directive are not being breached by Malta:
Article 21 of the TFEU
The European Commission states that it is satisfied with the introduction of Arms Form F2: Temporary Recognition of the Tenant in Rented Premises as a solution to the longstanding tenant problem of tenants not being able to access the correct tariff for people living in their primary residences.
Using this new form, tenants, applying to be on the correct tariff for people living in their primary residence, will have to pay a non refundable €50 application fee and a €466 deposit. Homeowners do not incur these charges when they apply to be placed on the correct tariff. In my opinion, this constitutes an indirect discrimination against non Maltese EU nationals because most tenants in Malta are non Maltese. 80% of Maltese citizens are homeowners. This also means that, while the non Maltese EU tenant is living in Malta, they will not be able to have access to the €466 throughout their stay in Malta, which may be permanent.
Most crucially, the Commission has failed to read between the lines. The Commission does not seem to understand that landlords in Malta are extremely reluctant to register their tenants on the Arms bill. Tax evasion on rental income is rife in Malta. How do you think the landlord will feel when the tenant - via Arms Form F2 - registers their presence in the landlord’s so called empty secondary residence against the wishes of their landlord? I know for a fact from my tenant support group of now > 3000 members that many tenants would not consider going down the F2 application route, for this very reason.
Article 12 and Article 169 of the TFEU
Moreover, the discrimination of Arms, the sole, state owned utility billing company, against tenants, when compared to homeowners, is in breach of EU consumer protection law. Homeowners do not have to pay a €466 deposit or a €50 application fee to access the tariff for people living in their primary residence.
Why is this not the default tariff? This would resolve the Arms / tenant scam at a stroke. Why is the default tariff the extortionate secondary residence tariff, misleadingly named the domestic tariff (No. of registered occupants = zero)?
Energy Efficiency Directive
The Maltese rental market is completely unregulated and was completely liberalized in 1995. This means that landlords are free to increase rents by whatever amount they want. As a result there are many tenants from lower socioeconomic groups paying more than 70% of their income on rent. Homelessness is on the increase. These tenants will never be able to afford a €466 deposit or even a non refundable €50 application fee. This will mean that they will continue to be on the extortionate summer residence tariff. This unfair billing system will therefore penalise Maltese tenants from the lower socioeconomic groups because these are least likely to own their own property. At the same time, the multiple property owning landlord (often tax evading) will enjoy the correct tariff for people living in their primary residence as a matter of course.
Tenants who cannot afford the deposit and the €50 application fee and / or who will not want to risk the landlord’s wrath by applying to be placed on the correct tariff via Form F2, will therefore be trapped on the incorrect secondary residence tariff. They will also, therefore, not have access to the Arms bill or to any information on their consumption, because Arms is not able to give a copy of the bill to the tenant, if the tenant is not the account holder. This is in breach of the Energy Efficiency Directive, which stipulates that everybody must have information on their electricity consumption.
Article 102 of the TFEU
Arms is the sole, state owned utility billing company. Therefore, I submit that Arms is abusing of its dominant position and treating tenants less favourably when compared to homeowners. Tenants have no other utility companies to switch their custom to.
Tenants are unable to access the Arms Refund Mechanism via Arms Form H2
Please note that tenants, unlike homeowners, are not able to access the redress mechanism, Arms Form H1 because usually they are not the account holders. This is in further breach of Article 21, Article 12, Article 169 and Article 102 of the TFEU.
On the 17th February, 2016, I forwarded my application for Arms redress (dated the 16/2/2016) to Madame Boulanger of the European Commission (please see attached). There followed an absurd correspondence between Noel Scerri (Arms Legal Counsel) and myself, with the European Commission in copy, in which it was confirmed that any refund owed to us would first go to our ex landlord, the account holder. I would then have to initiate court proceedings in order to get our money back. Needless to say, the Arms overcharge plus my legal costs in the amount of €3801.63 are still unpaid.
The European Commission may be unaware (I cannot see how, but anyway) that the Maltese justice system is not fit for purpose. Most people will not resort to our justice system for justice. People will tell you that our courts only benefit the wrongdoer and not the victim. My own experience of having our tax evading landlord able to apply a precautionary garnishee order on our bank account and my salary, because I dared protest against paying for our consumption of water and electricity on the incorrect tariff, did nothing to reassure me of the effectiveness and fairness of the Maltese justice system.
Incidentally, my original petition of 2013 stated that the overcharge on the secondary residence tariff was 35% higher on the second home tariff for electricity and 60% higher on the second home tariff for water. I have sent the European Commission and the European Parliamentary Committee of Petitions reams of documents and information. Please note that post my 2013 petition, I discovered that the overcharge on Arms bills ranges from 43% to 103%, when compared to the cost on the primary residence tariff. In fact, our overcharge over 35 months was 101% more expensive when compared to the cost on the primary residence tariff.
Questions for the European Commission to ask the Maltese Authorities:
1. How many tenants have used Arms Form F2 Temporary Recognition of Tenant in Rented Premises since its inception?
2. How many tenants have been successful in applying for redress since the inception of Arms Form H1?
3. How many Maltese properties on the summer residence tariff (domestic tariff; No. of registered occupants = zero) show a consumption of water and electricity which belie the ‘zero occupants’ tag?
Finally, I must say that I am extremely disappointed at the way the European Commission has allowed Malta to dictate the terms of any solutions to the problems caused by this abusive billing system.
Having a billing system which is as fair to tenants as it is to homeowners is hardly rocket science. Most tenants in Malta are non Maltese EU nationals so this is definitely the remit of the EU. Instead of adding more complexities, more add on plasters, this billing system needs to be scrapped and a new one must be created. One possible, very simple solution is to make the default tariff the primary residence tariff.
Also, the European Commission does not seem to be able to join the dots. Why does Arms – the sole, state owned utility billing company – take more money from tenants than it should? Is it an honest mistake? Hardly. Arms has known that it takes more money from tenants than it should, ever since the inception of the two tier residential tariff in 2008. It has resisted doing anything about this ever since.
Could it be that Malta uses the EU national as a cash cow? Non Maltese EU nationals are not able to vote in the general elections. Votes are everything in Maltese politics. If you don’t have a vote, then you are not valuable to the Maltese politician. Why does the European Commission continue to humour Arms?
Throughout my 5 year campaign to do something about the Arms / tenant scam, I have kept the members of my tenant support group up to date with all my correspondence to the EU. This group now numbers > 3000 members. They are mostly EU nationals on the incorrect Arms tariff. The ineffectiveness of the EU to resolve this situation is dumbfounding. This will be the last time I will write to the EU regarding this situation. I am now a homeowner – we have lived in our own home for more than 2 years. This Arms / tenant scam does not affect me any more. I would like to tell the tenants in my tenant support group that their problems with extortionate Arms bills are over. This is my primary reason for writing to you, again and again, after the European Commission repeatedly tells you that they are satisfied with Malta’s inadequate tinkering to its billing system. Of course I would also like to have the €3801.63 Arms has stolen from my family back. I would have liked to play a part in making EU member state Malta a better place to live in. But this cannot go on. I cannot continue spending my time writing to you, year after year, with hardly any improvement in the situation.
Moving from the UK to Malta in 2010 opened our eyes to the absolute free for all that is Maltese administrative policy. It was a huge shock to the system. The precautionary garnishee orders were traumatic and were the catalyst to my activism.
Since then I have also petitioned the European Parliamentary Committee of Petitions regarding two other matters: Petition 0852/2015 regarding the lack of recognition of my 15 years' UK teaching experience, and also Petition 03294/2015, regarding the discriminatory annual traffic charge. My family and I have been subjected to living in substandard accommodation of insecure tenure, paying extortionate utility bills and extortionate annual circulation licence car fees. Our household of 5 was expected to live on €300 per month after rent and €150 per month on the incorrect utility tariff. This, when Caritas Malta published a study in 2016 which stipulated that a family of 4 needed €936 per month after rent to live a minimum existence. In other words, we have been penalized for freely moving from the UK to Malta. Freedom of movement? It doesn't exist in Malta.
I understand that currently there are more serious concerns regarding Malta. Does the EU not see, however, that the Arms / tenant scam is symptomatic of a wider array of maladministration issues?
Malta Tenant Support