Debt enforcement and insolvency are, in the Czech Republic, a bigger problem, than most people realise. Although the overall number of enforcement proceedings has been steadily falling for several years in a row (thanks, for example, to campaigns such as Milostivé léto or the gradual halting of trivial enforcement cases), it is still the case that, according to data from the Chamber of Executors of the Czech Republic, more than three million of them are running. The number of individuals currently subject to enforcement is just under 600,000. In practice this means that the toughest nut to crack are debtors with multiple enforcement orders – on average, each person in enforcement has more than five separate cases. How can you avoid unpleasant surprises when renting out a property? Do not rely on the applicant’s “word of honour” alone and invest a few tens or hundreds of crowns in a careful search of all available registers. In doing so you protect yourself and your property from potential trouble worth tens or hundreds of thousands of crowns.
Every handover of the keys should be preceded by a detailed check in the available registers
While it is true that in exceptional circumstances debtors may not be aware of their situation, most of them know very well that they have a problem, and they will try to manipulate the landlord in various ways. For example, in the Ústí nad Labem and Karlovy Vary regions at least one active enforcement is held by a full fifth of people over the age of 15. The best situation, by contrast, is in the Zlín Region and the Vysočina Region. In Prague, according to current statistics, roughly one in forty people is in enforcement.
Checking the Central Register of Enforcements
The Central Register of Enforcements is a public list maintained by the Chamber of Executors of the Czech Republic, in which you will find all the information on specific final enforcement proceedings. The register is publicly available at www.ceecr.cz, and can also be accessed through third-party web portals (e.g. CEBIA). Searches can be made without registration, and you will need either the name and date of birth of the prospective tenant, or the name and exact address; by far the most reliable method is verification by birth number. Remember, however, to first confirm that the birth number you obtained from the applicant is genuine. A handling fee of 60 Kč is charged for providing the information, and it can be paid online via a payment gateway. After that, nothing stands in the way of obtaining up-to-date and accurate information about the enforcements in progress. If you want an extract in paper form, the simplest route is to visit a Czech POINT branch (e.g. at a public office or a post office), where, after paying an identical fee, you will get the same information as from the online register. Enforcement data are usually entered without delay (within 3 days) and, conversely, deleted without undue delay once 15 days have passed after the enforcement proceedings ended, or after the executor learns of their end.
Children’s stickers are a sign of good luck in a flat; the ones reading “Seized in enforcement”, on the other hand, are something you will definitely want to avoid
Checking the Insolvency Register
The Insolvency Register is available online too, and examining it in detail will not cost you a single crown. The register contains all individuals who are unable to pay their debts (insolvency proceedings were initiated against them after 1 January 2008). If you were considering renting a flat to a legal entity, the counterpart to this register is the so-called Register of Bankrupts. Searching the Insolvency Register only requires knowing the first name and surname of the person who wants to rent the flat. It is good practice to check in the registers also other people who are planning to share the property with the tenant and use it. It often happens that the person who wants to rent the flat from you is literally the last member of the family who is not yet in enforcement or insolvency. For people who have, for example, been granted debt relief, you can view in detail all available documents from the insolvency administrator, the court or employers.
Checking the SOLUS register of defaulters
It is also good practice to ask for an extract from the SOLUS register. This is an interest association of legal entities that provide services of various kinds in the Czech Republic – for example mobile operators, banks, insurance companies or energy suppliers. The extract from the SOLUS register at NejsemDluznik.cz has to be requested by the prospective tenant. Among other things because it draws on non-public data from the ID card – you as the property owner cannot do it for them without their knowledge. It is more common, however, that you carry out the check together, with the applicant present, and you both have the result immediately to hand.
Thanks to the SOLUS register you can make sure that the person interested in renting your flat does not owe money for banking services, energy or a phone tariff
The service is thus de facto a tool for both parties to reassure themselves about the prospects of their contractual relationship. For the applicant it is a simple way to confirm, for a fee of 250 Kč, that they are free of debt. For the property owner it means a higher level of certainty that the applicant is able to pay all their obligations on time and does not shirk their duties. Do you lack the time, energy and nerves to vet every prospective tenant individually and to live with the thought of having to deal with unpaid rent and executors in the property you own? Then place your rental flat in the hands of a professional management company that carries out above-standard checks in a range of available registers and selects a completely trouble-free tenant. With the FLAT SERVICE Garant service we can take the risk of non-payment on ourselves – we will rent the flat from you directly for an agreed amount. Call +420 277 000 330 or write to sales@flatservice.cz to find out more.
