Rising Debt to Owners and Housing Cooperatives in the Czech Republic

A recent report by the Union of Czech and Moravian Housing Cooperatives (SČMBD) has revealed that debt to housing cooperatives and unit owners has doubled to approximately 170 million crowns in 2022. The amount includes 53% of long-term uncollectible debt, and 13% of those in debt are persistent defaulters.

The report further states that those living in apartment buildings often have to pay for energy and other services out of their own pockets due to the inability of other residents to pay their dues. The rise in debtors is attributed to the relaxation of the debt relief process, where people are no longer obligated to pay 30% of their debt.

Robert Němec, Chairman of the Czech Bar Association, explains that housing cooperatives do not have priority in court settlements and often fall behind in the order of creditors in the case of multiple debtor executions. As a result, the share of satisfied claims depends on the value of the apartment.

According to the report, tenants’ debt in housing cooperatives has increased significantly compared to the previous year. Jan Vysloužil, the chairman of SČMBD, states that this is alarming, especially since 53% of the total debt is long-term uncollectible.

The Union of Czech and Moravian Housing Cooperatives is a particular interest group of housing cooperatives and unit owners with a presence throughout the Czech Republic. The organization analyzed the statements from 554 thousand apartments to compile this report.

The rise in debt is a cause for concern for cooperative unit owners and those living in apartment buildings. Many have to bear the burden of unpaid bills and are forced to deal with their own financial difficulties.

It is crucial to understand the reasons behind the rise in debt and take appropriate measures to address the issue. This involves stricter regulations and effective measures to promptly ensure debtors pay their dues.

The report highlights the importance of financial planning and accountability to avoid debt. It also emphasizes the need for housing cooperatives to have a more significant role in court settlements and for the government to consider providing additional support to those struggling.

By taking these steps, the Czech Republic can ensure that housing cooperatives and unit owners receive the necessary funds to maintain their properties and that tenants are not burdened with additional costs due to the inability of others to pay their dues.