- Hans Weber
- December 4, 2023
Rising Debt Strains Czech Housing Cooperatives: Urgent Reforms Needed
A recent comprehensive report published by the Union of Czech and Moravian Housing Cooperatives (SČMBD) has unveiled a concerning surge in debt within the housing cooperative sector, placing undue financial stress on both cooperative unit owners and tenants alike. The report, compiled from the analysis of statements from a staggering 554 thousand apartments, discloses that debt owed to housing cooperatives and unit owners has ballooned to a staggering 170 million crowns in 2022, doubling from previous years.
Alarming figures within the report indicate that a substantial 53% of this debt is categorized as long-term uncollectible, while a further 13% of the indebted are persistent defaulters. One dire consequence of this trend is that residents within apartment buildings are increasingly shouldering the financial burden of unpaid bills, resorting to out-of-pocket payments for essential services such as energy. This shift in financial responsibility underscores the inability of a significant portion of residents to fulfill their financial obligations within these cooperatives.
Experts attribute this escalating indebtedness to the recent relaxation of debt relief procedures, which has eased the requirement for debtors to pay 30% of their total debt. Robert Němec, Chairman of the Czech Bar Association, elucidates that housing cooperatives often find themselves relegated to the back of the line during creditor settlements, due to a lack of priority in court procedures. The resultant discrepancy in the satisfaction of claims is linked to the value of the corresponding apartment.
Article by Prague Forum