RAK developer threatens to cut power over chiller fee dispute

Tenants and landlords in RAK's Al Hamra Village say utility costs for chillers last year were based on overall use of electricity, and are far too high.

Tenants and landlords of Al Hamra Village in Ras al Khaimah face having their electricity disconnected in a continuing dispute with the developer over unpaid chiller fees. Sarah Dea / The National

RAS AL KHAIMAH // Tenants and landlords at a Ras Al Khaimah development face having their electricity disconnected in a continuing dispute with the developer over unpaid chiller fees.

They have refused to pay back-charged fees that were calculated based on overall power use, not chiller use.

In June last year, landlords were issued bills for chiller use from January to March. Many said they had not used air conditioning in that period.

Al Hamra Real Estate, which oversees 2,500 residential apartments and 1,000 villas and townhouses in Al Hamra Village, installed 2,500 meters by mid-September and had expected installation to be complete by December 31. About 100 meters have yet to be installed.

"While we cannot comment on a specific case without having unit number and billing history, we can state that Al Hamra has been lenient with collection of utility payments," Al Hamra said.

Landlords and tenants have asked that this year's meter readings be used to calculate last year's chiller fees more accurately.

Al Hamra said it would consider the proposal if it were backed by a "substantial majority" of owners.

"If we have written commitment from a substantial majority of the owners we will adjust 2012 invoices accordingly," the company said.

"This will mean that residents will bear the difference if the actual consumption is higher in 2013 and Al Hamra will credit those with lower consumption."

Dr Ulla Hedstroem owns three Al Hamra properties.

"Horrendous bills," Dr Hedstroem said. "I think they have done all these chiller charges in a very amateurish way.

"I do not trust the way they're calculating. I think when the meters are on it will be clear, hopefully, that those are other charges because this is far too much."

She said that for months she and many other overseas landlords were unaware of the high fees. Bills were delivered to her vacant flats.

When Dr Hedstroem rented the properties later in the year, she agreed to pay for utilities because she did not know of the chiller charges.

She was billed Dh6,000 for two studio flats between January and October and was told that if she did not pay by December 3, the electricity would be cut.

"I had refused to pay it like many others but I was hoping it was empty threats," Dr Hedstroem said.

"I wrote to them saying I am happy to pay the chiller charges if they are on a meter."

Her third studio, which had an outstanding repair bill, was cut off. The developer said this was because of unpaid chiller fees.

People with between three and four months of unpaid fees face disconnection and will be given a week's notice before electricity is cut, Al Hamra said.

"Disconnection of utilities due to non-payment is not new," the company said.

"This has been an ongoing practice for delinquent users."

Al Hamra earlier said that as air conditioning was a utility, fees must be paid according to tenant and owner contracts.

It said fees were high because rates were calculated by dividing the cost of a building's chiller units by the total electricity use.

Each user was then charged for each kilowatt of electricity used.

Bills are always delivered by email if contact details are correct, the company said.

But tenants who had not received bills said their email addresses had not changed in years.

An Asian tenant who did not want to be identified was disconnected without notice two days after she visited the office to discuss Dh3,000 in unsettled chiller fees that her owner had refused to pay.

"I was talking to this related person and he didn't tell me anything about this disconnection," the tenant said.

She said utility bills at her former apartment, which was also in RAK, never exceeded Dh300 a month.

One British pensioner said money was deducted from her account for chiller charges after she told developers the funds were to be used only for water and electricity.

"It's all a bit much for me, I've got to say," said the woman, who is 66 and has owned her property for four years. "This year my costs have doubled because of the chiller charges.

"It disturbs me because I'm getting older every year and less able to fight it every year. That's the underlying threat.

"I also don't like putting myself on a limb and not paying bills. It's not my way and I don't like it."