The Finance Ministry (MF) says it had to increase rents in two apartment buildings in the Krkonoše region of Harrachov, where mostly low-income people live, several times according to the law. The MoF insists on the increase and will only forgive tenants for rent arrears incurred until the end of October this year if they request it. The MF wants to sell the houses with 14 flats next year, including the tenants, including the debt for the unpaid increased rent. This is according to a statement by Finance Ministry spokesman Tomáš Weiss. According to him, none of the tenants are at risk of eviction. The tenants told journalists on Tuesday that they refuse to accept the three- to fivefold increase in rent and are paying it at the original rate.
The two apartment buildings in a local area called Klondajk were built almost 30 years ago. The residents originally paid the rent to the city. The state acquired both houses last year following a court ruling in a years-long dispute with the city over the settlement of liabilities after the privatisation of Crystalex in the 1990s.
“The MF had to offer new lease contracts to the residents of both houses because the original contracts are invalid based on a court decision on the allocation of the property to the MF as the successor of the former National Property Fund of the Czech Republic. The amount of rent in the newly proposed lease contracts corresponds to the market level that is customary at the time and place,” Weiss said. He said the rent was determined on the basis of two expert opinions. “The significant increase in rent is due to the fact that both houses were paying regulated rents that had not been adequately increased for more than 20 years. Other than the implemented procedure of the Ministry of Finance, it would be in direct contradiction with the Act on State Property, which we have to follow, as this is a property transferred free of charge in 1993 from the National Property Fund of the Czech Republic to the town of Harrachov,” said the spokesman.
The MF has been recovering the increased rent retroactively since the houses were repossessed, i.e. from November 2021. Weiss said it was not true, however, that they did not try to take into account the social situation of the users. “We are well aware that a large proportion of the occupants of the houses are elderly or even disabled pensioners, for whom all the alternatives offered may be financially unaffordable,” Weiss said. He said none of the tenants are facing eviction and will be forgiven for outstanding rent increases for the period from November 2021 to October 2022, but they must apply. However, the unpaid increased rent from this November will no longer be forgiven by the MoF, although Weiss said the debt will not be collected by the MoF. “We would sell this debt for the tenants along with the houses because according to the state property law we cannot write it off, but we can sell it. Then it will be up to Harrachov or any other entity that acquires the houses what they want to do with it,” Weiss said.
The MF plans to offer the houses in a public tender in the first half of next year, probably in the online auction system of the Office for State Representation in Property Affairs. Harrachov will have the right of pre-emption, given that it owns the land under the apartment buildings.
Dagmar Tothová, who has been living in the Klondajk house since it was built, told reporters on Tuesday that she should pay five times more in rent. She is on a disability pension and her husband is retired. So far, they have been paying a monthly rent of nearly CZK 3,000, but the ministry is demanding that they pay CZK 15,500 and pay CZK 150,000 on top of that.
Mayor Tomáš Vašíček (SNK – Change for Harrachov) told journalists that he considers the Ministry’s demand for a multiple increase in rent to be outrageous. “It is nonsense,” he said. He said the rent at such a level would correspond to commercial accommodation in apartments or new buildings. The city has secured a lawyer to represent the tenants in their negotiations with the MF.
The state has also offered to buy the apartments from the tenants, but the price is considered exorbitant because the houses are in poor condition. The roof, windows, balconies and other parts need repair. In total, the tenants would have to pay over CZK 100 million. “They have averaged one apartment for eight million,” Toth said.
Source: CTK
