Municipalities often to blame for poor people's debts - press

Czech municipalities are in many cases to blame for the problems of their socially deprived inhabitants, primarily Romanies, who end up as rent-defaulters with high debts and are in the end moved to low-standard ghettos where they are paradoxically often charged inadequately high rents, the daily Lidove noviny (LN) writes today.

It adds that municipalities profit from such rent-defaulters since they can get rid of them easily and sell the municipal flats to private owners.

"They let the rent rise so high that it becomes impossible for the family to pay it. Especially if the debt has increased by penalties, as well as court and distraint fees," said Marketa Vankova, an anthropologist from Charles University who has participated in a project mapping the types of crime in deprived localities in Brno, south Moravia, ordered by the Interior Ministry.

LN points out that in the case of rent-defaulters, municipalities do not use the efficient legal instruments they have at their disposal. They can either send part of the debtors’ social benefits directly to the house owner, or they can agree on an instalment scheme with them.

Vankova expressed fears that some municipalities intentionally profit from high debts of low-income, mostly unemployed and socially isolated people with low education who are not able to judge their situation from the legal point of view.

Instead of seeking a solution acceptable for both sides, municipal authorities often decide to relocate rent-defaulters to low-standard housing or to sell the house with them to a private owner who would either "clean up" the house to lease or re-sell it, or profit from its poor inhabitants.

Owners of such real estate are well aware that the poor tenants living on the edge are not able to secure normal housing and that is why they offer flats to them for extremely high prices with regard to local circumstances, LN says.

The paper cites an example of a company from Plzen, west Bohemia, providing loans and collecting debts, that can easily profit from debts of low-income inhabitants. Some time ago, the company, which has contacts with two municipal representatives received a municipal order for debt recovery from rent-defaulters without a tender. Moreover, the company bids for the purchase of some 40 municipal flats inhabited mainly by local Romanies.

LN writes that the Plzen district authority moved Romanies living on social support to large flats with too high rents that they could not afford to pay so they started to have debts. The municipality hired a debt collector and it plans to sell the flats to the same company. The Town Council first rejected the sale of the flats but it would deal with it again in April, the paper adds.

Deputy Plzen Mayor Jiri Uhlik (Civic Democrats, ODS) told the paper that it would be up to the new house owner to solve the problems with the indebted tenants.

The People in Need humanitarian organisation points out that such families would have two "bad" options. The new owner would either throw them out without a compensation or he would try to relocate them in low-standard flats for which they would be forced to pay the same or even higher rents, LN says.

Those who are mostly dependent on social benefits naturally cannot afford to pay much higher rents and are forced to borrow money, often under very disadvantageous conditions, which they are soon not able to pay back.

According to a study, such loans are often provided or mediated by people connected with the new house owners. They can for example secure a false job contract or a statement on regular income to take a bank loan, for which the mediator charges up to a half of the borrowed sum, LN says.

The deprived families are thereby entrapped in a vicious circle from which they cannot escape.

"We have forgotten that these people are not only culprits, but also victims…or victims at first place," Vankova told LN.