As expats step up their campaign against abuse in the letting industry, the Federation of Estate Agents has cited the “explosion” of young, foreign residents as the reason for landlords’ caution over deposits and utility bills.

A federation spokesman said it was “unfortunately common” for younger foreign residents to abscond without paying their dues.

“In many cases, the fact that landlords receive the bill is the only safeguard to ensure it is paid, since the vast majority of contracts are for a year or less,” he said.

“Some tenants do not even get a maid to clean their apartment throughout their tenure, so this [deposit for damages] is also becoming part of the rental contract.”

Expat lobby group Up in Arms is in contact with several local estate agents over formulating a ‘tenants’ charter’, to ensure lessees are fully informed of their rights and protected against abuse.

One concern is that many lessees are unable to pay the cheaper ‘residential’ utility tariff because landlords will not register their clients’ names on the bills.

It is suspected that, in some cases, landlords are reluctant to register clients because they do not declare their rental income.

If utility bills are issued in the landlord’s name, lessees have no access to them under the terms of the Data Protection Act.

The Federation of Estate Agents felt it would be unfeasible to change a name on utility bills without a “massive” deposit to cover the risk of absconding.

Another concern of Up in Arms is the fact that landlords commonly hold deposits in their personal accounts, leaving the possibility of them withholding money at the end of the contact due to alleged damages.

Some would prefer to see deposits held in escrow accounts, which would mean they were held in trust by a third party and returned only after specified conditions were fulfilled. The use of escrow accounts for rental properties is common practice in the UK, where deposits are expected to be returned within 15 days.

Malta is miles behind the UK in terms of regulating the market

But the Federation of Estate Agents thought it would be a “disaster” if its members had to act as the stipulated third party. “We would then be in a position to have to decide who is right or wrong and be expected to judge the situations, which is not within our remit or ability from a legal standpoint,” the spokesman said.

In most cases Maltese estate agents do not manage landlords’ funds and intervene only when requested to help solve disputes.

Asked if the federation would support a ‘tenants’ charter’, the spokesman said: “Everybody is free to enter whatever charters they want and it is beyond the federation’s remit to force members to enter agreements. This is up to the individual agencies.”

Case study

British expat Peter Hobson* has changed rental properties four times during his four-year stay in Malta, losing more than €2,000 in unreturned deposits in the process.

Most recently, he was informed the company that owned and rented out the penthouse he was vacating in Ġzira was claiming €1,428 from his €1,600 security deposit.

This included €665 to replace a kitchen top, €175 for a new coffee table and €225 for repainting the flat.

Invoices and e-mails between Mr Hobson and the company over the past few months have been seen by this newspaper.

Mr Hobson claimed the kitchen top had one burn mark and the table had one coffee stain, neither of which was disputed by the chairman or secretary in the e-mails seen by this newspaper.

He repeatedly asked to be issued with three separate quotes before agreeing to pay for the items. He received a two-line e-mail with no reference number as one quote.

When he was later issued with another quote, he called the number on the paper and was told the company that supposedly issued it had changed name – it was, in fact, the same firm that owned his property.

Having seen the invoice, Times of Malta called the number last week and was told the same information in a recorded conversation.

After three months, Mr Hobson threatened the landlord company with arbitration and was offered a settlement of €500, which he reluctantly accepted.

“Malta is miles behind the UK in terms of regulating the market,” Mr Hobson said.

“If the island wants to continue to attract foreign investment and foreign talent to improve its economic viability, then surely such key areas as rent and utilities need to be addressed.”

*Name changed