Lease, utilities and other payments
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When looking for housing in the Czech Republic, most applicants focus primarily on the "rent price." However, the reality of the Czech market is that the amount you send to the landlord monthly consists of several distinct components. Understanding exactly what you are paying for and what the landlord can (and cannot) charge is key to avoiding unpleasant surprises during the annual reconciliation.
In practice, you will encounter two main models of how payments are set up in the Czech Republic:
### 1. "All-inclusive" Rent (Flat-rate payment)
This model is more common for short-term rentals, flat-sharing, or smaller apartments. A single fixed amount is agreed upon in the contract, which includes both the net rent and all utilities and services.
* **Advantage:** You have the certainty of fixed costs and do not have to worry about the annual reconciliation.
* **Risk:** If the flat rate is set too high, you are overpaying. If it is too low, landlords often try to increase the price retroactively, which is legally impossible for a pure flat rate without a new agreement.
Note – such an all-inclusive flat-rate payment can only be agreed upon for leases shorter than 24 months; otherwise, minimum deposits for heating and water must be specified!
### 2. Rent and Service Deposits (The most common model)
Here, the payment is strictly divided into net rent (the landlord's compensation for the use of the apartment) and service advances. These advances are merely an "advance payment" for actual consumption. Once a year (usually by the end of April, May ... for the previous year), the landlord must provide a reconciliation statement. If you consumed less, they must return the overpayment; if more, you must pay the arrears.
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## What are "services" and what are not? And what about "Other payments"?
This is where we reach the most common bone of contention between tenants and landlords. The Czech Act on Services (No. 67/2013 Coll.), in conjunction with the Civil Code, defines what can be included in billable services. These are activities from which you, as a tenant, derive a direct benefit – in other words, what constitutes a service for you as the lessee.
**What legally belongs to services and can be "reconciled":**
* Water supply and sewage disposal (water and sewage rates).
* Heat and hot water supply.
* Lighting and cleaning of common areas in the building.
* Operation and cleaning of chimneys.
* Cleaning of common areas.
* Elevator operation.
**What legally is NOT a service (and the landlord may not charge you for it in deposits):**
In Czech practice, landlords often try to hide costs in "services" that the law does not allow to be passed on to the tenant. These primarily include:
* **Repair Fund:** Contributions to the repair fund (contribution to the administration of the building and land) are an investment by the owner into their own property. The tenant does not receive immediate service benefit from it; therefore, it should always be part of the net rent, not the billable services.
* **Building/Apartment Insurance:** The owner pays for insurance to protect their investment.
* **Remuneration for the manager or the HOA (SVJ) committee:** The costs of administrative management of the building are borne by the owner.
But again, pay attention to the specific provisions of the contract – while the landlord cannot "reconcile" these payments as services, if you agree to, for example: "Rent XY, service deposits and other payments Z, these payments include in particular water, sewage, heat, cleaning of common areas, and the repair fund" – then you have included the repair fund under "other payments" and such terms can be agreed upon in a contract!
There is big difference if you have in cotract stated: + 5000Kč services, or + 5000Kč services and other payments (electricity, watter, gas, repair fund). The second one will cost you 10-30.000Kč yearly in payments to landlords property...
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## Electricity and Gas
In the Czech Republic, there are two ways to handle utilities directly in the apartment (cooking, lighting, sockets):
1. **Transfer to the tenant:** The cleanest solution. You sign the contract with the supplier (e.g., ČEZ, PRE, E.ON) directly. You have control over the price and the amount of deposits, and the landlord does not have to deal with any potential debts of yours.
2. **Utilities remain with the landlord:** You pay deposits to the landlord, and they forward them to the supplier. Note here – the landlord must provide you with the actual invoices from the supplier; they cannot add their own "margin" to the price of electricity.
## What is the best option?
When drafting a contract, a Flat Rate is best for you – you don't have to deal with consumption. However, it is rare because landlords will not want to offer it for the same reason. The next best option is to have the rent amount and service deposits clearly stated. For peace of mind during the next reconciliation, it is better to have specific services listed and to watch out for items like the repair fund, building insurance, etc., clarifying these payments with the landlord right at the signing of the contract. If you only have "Service Deposits" in the contract – without further specification – you are in a strong position because the landlord cannot charge you for these non-services – but if they didn't know this themselves, it will bother them significantly at the end of the year and you will be dealing with a dispute. If you agree to pay these non-services as well, list them correctly in the contract as other fees. Keep things clear!
Remember that as a tenant in the Czech Republic, you are protected as the weaker party. Transparency in payments is not "annoying" the landlord; it is your legal right. The repair fund, for example, is a substantial item in the HOA (SVJ) reconciliation. Landlords often try to have the lowest possible rent on the market and subsequently include this in the "reconciliation" instead of factoring it into the rent as the law intends – others simply don't know any better! Not every landlord is a lawyer... now that you know, it's up to you how you use this information :-)