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Czech law tightens housing benefit terms for residential hotels

Prague, 8.11.2014 22:25, (ROMEA)
One of the residential hotels in Ostrava on Cihelná street (2013). (Photo:  František Kostlán)
One of the residential hotels in Ostrava on Cihelná street (2013). (Photo: František Kostlán)

The disbursal of housing benefits directly to the operators of residential hotels will be restricted by a new law. The state will calculate the benefits based on the amount of space leased, not per person.

Now the amount of rent charged by such facilities may not exceed usual market rents. The change was introduced by a Government amendment to the law on aid to those in material distress and was signed by Czech President Miloš Zeman on Thursday.  

The amendment is supposed to prevent residential hotel operators from overcharging the state. It also establishes the requirements that apartments must met to qualify for state assistance.

In the lower house a provision was added to the Government model according to which the benefit can only be disbursed to a residential hotel operator with the consent of the municipality where the facility is located. The aim of the provision was to prevent the creation of residential hotels in inconvenient places.

Czech ombud Anna Šabatová objected to the provision. She believed it might lead to the closure of several residential hotels whose socially vulnerable tenants might end up homeless on the streets.

Most legislators, however, did not share those concerns. In their view, the change primarily makes it possible for municipalities to influence the location of residential hotels.

The socially needy tenants of such facilities will be given permanent residency in the municipality, which will be responsible for handling the consequences of closing them. The Government amendment is also supposed to loosen several architectural and technical requirements for recreational facilities so the owners of such properties can access the state housing benefit should they decide to provide permanent housing.  

This change will particularly affect people on welfare who already live in such vacation cottages and actually own them. Under previous legislation such people were not entitled to housing benefits.

Czech Social Affairs Minister Michaela Marksová (ČSSD) said previously that the Government wanted to prevent state housing benefits from motivating landlords to charge overpriced rents for substandard facilities. All residential hotels will now have to uphold certain standards.

The procedure for awarding housing benefits is to be both simplified and tightened. The provision of such benefits will no longer be time-bound.

The number of people receiving housing benefits and the volume of payments disbursed has risen in recent years. In 2011, there were 24 400 recipients of the benefits, for which the state paid CZK 850 million; last year there were 65 100 recipients and CZK 2.8 billion disbursed.

ČTK, translated by Gwendolyn Albert
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