The Czech Republic had 2.4 pct of rent defaulters in the first quarter of this year, down half a percentage point year-on-year. The reason for the decline is the improvement in the economic situation, the fall in inflation and the settlement with the energy crisis. This is according to an analysis by the Association of Rental Housing (ANB), an association of institutional landlords. The real value of non-paying tenants could be higher, according to the association, because the analysis does not take into account people who owe and have moved out of their rented accommodation. The association also believes that currently tenants are at an advantage against landlords.
The authors of the analysis defined a rent defaulter as a person who owes more than CZK 1,000 in rent for more than 30 days but is still a tenant. “The analysis therefore does not include non-payers who still owe rent but no longer live in the rental property. If we were to include these debtors in the analysis, the number would grow cumulatively because many debtors never pay their debt,” said ANB vice president Jakub Vysocký.
According to ANB, the problem of rent defaulters escalated at the turn of 2022 and 2023, at a time when there was an energy crisis and housing-related expenses skyrocketed. There were also places in the Czech Republic where the number of defaulters tripled.
The Association has long opposed the current planned legislative changes to rental conditions introduced by the Ministry of Regional Development (MMR) and the Ministry of Justice (MoJ). According to the new proposals, it would not be possible to conclude a lease agreement for a period of less than three years more than twice in a row, the landlord could increase the rent by 3.5 percent after reconstruction, and the process of evicting non-payers would be dealt with in a shortened court process. The association believes the proposal puts landlords at a disadvantage and will have no real impact on the issue of evicting non-payers.
In a survey conducted by the Ministry of Regional Development last June, which was attended by some 1,400 respondents, about five per cent of people said they had been in arrears with rent payments in the last year. The vast majority have paid or are paying off the debt. In addition, 96 per cent of respondents said they had never received a notice to quit their tenancy or an official eviction notice. One percent of respondents had experienced eviction for non-payment of rent.
Smaller landlords with fewer than ten apartments most often reported rent payments were more than two weeks late, but these debts were eventually paid in full and in one lump sum. Over the course of a year, the likelihood of this occurring is about seven percent per apartment, according to MMR data. In three per cent of cases, tenants paid their debt in instalments. The fear of losing one’s home is mainly related to age and net household income. Tenants over 50 years of age in particular have a lower fear of losing their housing.
ANB brings together 21 institutional landlords who own more than 60,000 rental apartments in the country as of 2020. The properties are rented out by 16 of these owners.
Source: ANB and CTK
