RPG Byty finds ally in rent negotiations

RPG Byty, Czech Tenants Association agree to seek common ground on rent deregulation

Michael Stein 11.1.2011

RPG Byty, the Czech Republic’s largest owner of rental housing, has signed a memorandum of cooperation with the Czech Tenants Association (SON) in a bid to resolve the potential impasse over rental pricing as deregulation begins to take effect. A number of points the two organizations agreed on were enumerated at a press conference in Ostrava.

RPG plans to implement gradual rent increases in order to allow for improved repairs of its housing portfolio. RPG outlined its rent increase proposals in November, with the maximum increase coming to 7.5 per square meter. While SON acknowledges the potential increase in comfort from improved facilities, its priority remains minimizing the impact of higher rents on tenants.

 

The points agreed upon included the presence of a SON member on the audit committee for payments from RPG’s housing funds, and establishing an RPG rescue fund for tenants in extraordinary distress to be supervised by SON. Lease terms were also adjusted so that the notice period between a landlord and tenant is now three months and fines for violations were lowered from Kč 5,000 to Kč 1,000. The agreements spelled out in the memorandum only apply to tenants who have signed new contracts.

Praise not universal

In opposition to RPG stands the BytyOKD.cz tenant group, which cried foul over SON’s cooperation with the real estate group. “Instead of SON defending the interests of tenants, citizens and taxpayers they are openly defending the interests of a company that has acted and continues to act unethically toward tenants,” said Roman Macháček, chairman of BytyOKD.cz’s website. RPG plans to implement gradual rent increases in order to allow for improved repairs

BytyOKD.cz has taken its complaints to the European Commission, claiming that the Ministry for Regional Development gave the company illegal state aid and that a Kč 1 billion loan gave them an unfair advantage over its competitors. RPG has denied the charges and stated that it is a matter between the Czech government and the EU.

Meanwhile, RPG Real Estate CEO Tony Aksich, seemed to be taking a backhanded swipe at BytyOKD.cz in saying, “We’re aware that between tenants and landlords there have always existed and will always exist some inherent tension. Likewise, there are long-term issues influencing tenants’ lives such as that of repairs and refurbishment of the housing stock. In the past, however, some self-appointed representatives of the tenants have chosen to concentrate on a single goal, which is to have the owners sell the apartments to the tenants without being remotely interested in the tenants’ real problems.”

RPG Byty is part of the RPG Real Estate group, which was founded in mid-2006 as a result of the transformation of the mining company OKD. The group took over assets and activities that were not related to OKD’s main mining operation, including residential housing mostly in the Moravia-Silesia region.