Navigating the rental market in Prague: what you need to know

Therefore, it is vital for migrants to navigate the housing market with a well-informed approach. The practical workshop, organised by the Expat Center Prague in collaboration with experts from Prague's NGO Association for Integration and Migration (SIMI), covered key aspects such as searching for accommodation, recognizing and avoiding scams, understanding rental contracts, and knowing the rights and responsibilities of tenants. This article summarises the key information from the workshop.

The Rental Market in Prague and Czechia

Prague is a multicultural city and hosts far over 20% foreign residents. The city is characterised by higher housing costs compared to other Czech cities, with a robust transportation network linking it to other major urban centers. On the website of the Ministry of Finance you can have a look at the price map, which indicates the prices on a rental market across Czech regions and Prague.

Searching for Accommodation

Tips for Where and How to Look:

● Online Portals: Websites like Bezrealitky.cz and Sreality.cz are popular for finding rental properties directly from owners or through agencies. It is essential to respond quickly to listings due to high demand, for that purpose it is possible to set up a watchdog function, which will alert you for the listings fitting to your search parameters.

● Search Parameters: Specify housing parameters such as the number of rooms, maximum rental price, and furniture availability. For example, note the difference between "1kk" and "1+1" in Czech rental listings: 1kk (garsoniéra) refers to an apartment consisting of one room with a kitchenette, along with a bathroom and toilet which may be combined or separate, however 1+1 indicates an apartment with one living room plus a separate kitchen, along with bathroom facilities.

● Social Media: Platforms like Facebook and Telegram host numerous groups like 'Spolubydlení Praha' where rentals and flatshares are frequently posted. However, you should be cautious of potential scams and risk behavior.

● Realtors: Although they can expedite the search process, be mindful of commissions, which can amount to a month's rent plus VAT.

● Pro Tip: Use your actual social networks. As soon as you start looking for accommodation, make a post on your social media. Don't hesitate to let your colleagues, classmates, parents in school chats, and other community members know about your search. This method often works best because it leverages your existing relationships and can lead to more trustworthy and personal accommodation leads.

Avoiding Scams:

● Be cautious of offers with unrealistically low rent and refuse to view the property in person (for example, the landlord lives abroad and can not organise the viewing visit, however, asks for the money in advance).

● Verify the property owner's credentials via the Land Registry and avoid making payments before signing the contract (it is possible that the scammers can rent out the property on a short-term basis and rent it to you illegally).

● Use established platforms and avoid transferring money through unofficial channels.

How much money would I need?

We structured the expenses according to their types. Here is the breakdown of usual associated costs of moving into a new apartment.

One-Time Expenses

1. Deposit (“Jistota”/”Kauce”): This deposit serves as a security guarantee for the landlord, ensuring that the tenant fulfills their obligations under the lease agreement. By law it is capped at three months' net rent and is refundable at the end of the lease if there are no damages or outstanding dues.
2. Realtor's commission (if applicable): Often equal to one month's rent plus 21% VAT, this fee is paid for the services of a real estate agent to facilitate finding a rental property.

Monthly Expenses

1. Rent: The primary monthly expense, which varies significantly between locations and the type of accommodation.
2. Utilities: These usually include heating, water, sewage, garbage disposal, and service charges for common areas. It is crucial to confirm what is included in your rental agreement.
3. Additional Costs: Can include internet, TV/radio fees, parking, and sometimes apartment insurance if required by the owner.

Paying for the electricity and gas Typically, the landlord pays the suppliers directly, with contracts with the energy company in the name of the apartment owner. However, tenants can also transfer electricity and gas to their own name to avoid debt problems.

Prepayments (deposit payments, “zálohy”) for utilities are set based on actual consumption for the previous year. The landlord must provide an annual report of actual costs, known as "vyúčtování", within 4 months after the end of the billing period. This report identifies any overpayments or underpayments based on actual consumption of services. If the tenant has overpaid, the landlord must return the excess amount without undue delay at the end of the tenancy.

In case of underpayment, the tenant may need to pay the difference to the actual amount, which can be several tens of thousands at once. It is important to note that when concluding new contracts, the tariffs may be higher compared to old customers. To control the settlement, tenants have the right to request invoices from service providers.

Understanding Rental Contracts

When signing a rental contract in Prague or Czechia, it is crucial to understand their key elements and implications. The contract should clearly specify the parties involved, the details of the rental property, and the terms of the agreement. The contract typically includes information about the landlord and tenant, such as their names, permanent addresses, and contact details. It should also provide details about the rented property, including the address, floor, layout, total area and ideally the specification of the property according to the Land Registry. It’s advisable to have the contract reviewed by a lawyer or a trusted advisor familiar with real estate or applicable civil law, especially if the contract is not written in your native language. The key message is simple: DO NOT SIGN anything without understanding it.

Selected key aspects considering the contract:

● Duration and renewal: Fixed-term contracts are common, often for a duration of one year with an option to renew. If no specific term is stated, the contract is considered open-ended.

● Rent increases: The rent increase should not be more than 20% every 3 years for the indefinite contract, it must be proposed in writing by the landlord and agreed upon by the tenant. The contract may also include provisions for automatic adjustments based on inflation (“inflační doložka”).

● When the lease term ends, please pay attention to the fact that termination of the lease could be done under various conditions, based on the nature of the contract whether it is fixed-term or indefinite.

Selected issues to consider

In the rental context, there are specific restrictions on what a landlord can and cannot do, which are crucial for tenants to understand.

● Landlords cannot prohibit pets in the lease unless it would cause unreasonable difficulties.

● They also cannot prevent tenants from registering the rental address as their residence with the Ministry of Interior (MOI); a rental contract alone is sufficient for this purpose.

● Additionally, while landlords can impose fines, such as for late rent payments, these fines, when combined with the deposit, cannot exceed three times the monthly rent.

● Landlords are also not permitted to enter the apartment whenever they wish; they must provide sufficient advance notice and have a valid reason for entering, and it should never be without the tenant’s presence unless it’s an emergency situation.

Moving in and out

● Check-in: Document the state of the property thoroughly when moving in. Take photos and ensure all defects are recorded to avoid disputes over your deposit upon moving out. Prepare a transfer protocol, where the state of the apartment is documented, it should be signed by you and the landlord.

● Moving out: Provide proper notice as required by your lease agreement, usually at least three months for an indefinite lease. Ensure the property is in good condition, matching the initial check-in state (with regards to the usual tear and wear) to secure the return of your deposit.

● The landlord has the right to withhold the security deposit only in certain circumstances, such as offsetting the deposit against any outstanding rent or utility payments owed by the tenant. The landlord can also deduct compensation for damage to the apartment or its furnishings beyond normal wear and tear, but they must provide proof of the damage, such as photographs or witness statements. Additionally, if the tenant moves out of the apartment before the end of the notice period specified in the contract, they may forfeit their deposit. It is important to note that the landlord has the burden of proof when it comes to deducting money from the deposit, and they must demonstrate the damage or outstanding payments with clear evidence.

In conclusion, navigating the rental market in Prague and Czechia requires diligence, caution, and a good understanding of tenant rights. While the rental market in Prague can be challenging, especially for foreigners, there are resources available to help.

● Refugees Welcome Czechia: Assists specifically with housing for refugees. Website: www.uprchlici-vitejte.cz

● Tenants Initiative (INN): Activist member-based organisation offers advice and support to its members. Website: https://iniciativanajemniku.cz/en/domu-english/

● SOS Association: Advocates for consumer protection, including tenants. Website: https://www.asociace-sos.cz/

● Association for Integration and Migration (SIMI): Provides comprehensive support to migrants including legal advice (partly also on rental issues). Website: www.migrace.com

Authors: Stepan Vashkevich (Refugees Welcome), Katerina Losova (SIMI - Association for Integration and Migration)