Czech court initiates distraint against Přednádraží landlord, auction may result

A court has initiated distraint against Domy Přednádraží, s.r.o., the firm that owns properties in the ghetto on Přednádraží Street in Ostrava. The decision was made at the request of Ostrava Waterworks and Sewerage company (Ostravské vodárny a kanalizace - OVAK), which is owed several hundreds of thousands of crowns by the firm.

The chamber of executors says the situation could result in an auction of the properties. Landlord Oldřich Roztočil views the chamber’s statement as more institutional pressure and a plot against him.

The problematic situation with the properties began last summer, when the Building Works Authority decided that occupants of the locality had to move out because the buildings in which they were living are unsafe. Most people have since moved away, but several are still living to this day in building no. 8, which is the only property that seems to be relatively inhabitable.

Interest in the locality was revived several days ago when Roztočil signed new leases with the remaining occupants. However, he was subsequently unable to reach an agreement with the Building Works Authority to re-register the property as a residence.

The authority still lists building no. 8 as non-residential, which means those living in it cannot qualify for housing benefits. The landlord then told them they must move out.

Most of the tenants are still in the building. The landlord has filed criminal charges against them and asked police to evict them.

A court expert will now assess the value of the buildings on Přednádraží Street, according to Ms Báčová, the spokesperson for the chamber of executors. “Notice of an auction will then be issued which will establish the minimum bid, among other matters,” she said.

The auction will most probably take place online this summer. Báčová said the court-appointed executor is negotiating with entities interested in assisting those occupying the property.

"It is anticipated that the distraint ordered against the current owner could contribute toward finding a way out of the long-unresolved conditions in the locality. For example, a civic association or foundation could become the new owner of the non-residential properties and could turn them into a mini coexistence village or social services center,” Báčová said.  

Roztočil said he views the proposal to seize his properties as a justified demand by his creditors, who are just trying to get their money. "The company got into this situation thanks to the inability of others to pay, but talk of an auction is very exaggerated,” he said, adding that at a personal level he views the whole situation as yet another attempt to defeat him.

"If you look at who owns OVAK, which filed the motion for distraint, it is clear that the municipality owns an enormous share of it, and we have been bravely fighting them for nine months now,” Roztočil said. He said he would decide what to do next once he learns the exact amount of money owed.

"If it would have some effect, there is still the option to settle, i.e., to pay off the debt. However, if the situation continues to involve moves to destroy the settlement, then we will let the auction go ahead,” Roztočil said.

The landlord believes the auction should not affect all of the company’s assets. He was angered by the chamber’s statement about the locality’s possible future, saying it was completely inappropriate for them to have commented on a possible outcome.

Jana Pondělíčková, the spokesperson for the municipal department of Moravská Ostrava a Přívoz, said any new owner would have to repair the properties as per the Building Works Authority’s order. The work would involve cleaning the basements of backed-up sewage and performing repairs to the buildings’ interiors, to the internal sewer line and the connection to the larger sewerage system, to the lightning rods, the roofs, and the wiring.

"The owner would have to submit documentation about the construction, and on the basis of that documentation we would be able to evaluate whether the property meets the necessary requirements to be registered as residential. If the owner meets the requirements of performing the repairs and submitting documentation of them, it is possible that the buildings could be used once more as residences,” Pondělíčková said.

The municipal department reportedly has no interest in an eventual auction of the properties. "The municipal department is not considering participating in the auction to purchase either the buildings or the land,” Pondělíčková said.

On the other hand, Kumar Vishwanathan of the Life Together (Vzájemné soužití) civic association, which is working with the local residents, is considering participating in the auction, should one take place. However, he said the association does not have enough financing to participate on its own.

Should an auction take place, the association will do its best to find partners to help create low-cost housing at the site. "We have already negotiated with the executor, who was open to the idea that low-cost housing could exist there,” Vishwanathan said.

There are currently nine buildings in the locality. Each plot is 3 058 meters square. With the exception of building no. 8, the properties are all in a devastated state with collapsed interiors.