Czechia: Cutting off chronic non-payers from hot water and district heating

The Supreme Court has condoned the course of action taken by one HOA when they cut off the (non-paying) owner of an apartment unit from hot water and heat. Would such an approach be possible also toward a non-payment tenant?

An association of apartment unit owners had passed an assembly decision to cut off perennial non-payers (who were at least three months behind their payments) from hot water and district heat supplies, at the expense of the non-payer.

The owner of one such unit, acquired in an auction, then sought relief in court. The unit had been cut off from the said utilities by the HOA on grounds of failure to pay the facility management fee and the payments on account of utilities. The new owner was in fact a company with personal ties to the previous owner which now sought the reinstatement of supplies in court. The HOA countered by making the resumption of supplies conditional upon prior settlement of all outstanding amounts.

The Supreme Court noted that associations of apartment unit owners are legal entities established for the purpose of managing apartment buildings and the pertinent land plots. Sec. 1189 of the Civil Code enumerates the elements of such property management, listing a number of powers and responsibilities which principally relate to the common parts and areas of a given real property. Building administration within the meaning of Sec. 1189 of the Civil Code does not include any obligation on the part of the HOA to ensure that the owner of an individual unit may exercise the rights associated with ownership of the apartment unit to the full extent and without disturbance.

While it is true that the HOA may provide the owners of apartment units with services, and resolve on the scope of such services, as per Act No. 67/2013 Coll., the law does not oblige the HOA to render such performances.

To the extent that the HOA is under no statutory obligation to procure utilities and supplies, concluded the Supreme Court, it may well decide not to provide such services to non-payers.

Having said all that, the situation presents itself rather differently in the case of lease relations. As per Sec. 2205 (c) and Sec. 2243 of the Civil Code, the landlord must see to it that the tenant has undisturbed use and enjoyment of the rental premises throughout the entire term of the lease, i.e., the landlord cannot make fulfillment of the duty to procure supplies conditional upon the fulfillment of obligations on the part of the tenant, and thus must not suspend or restrict supplies in the event that the tenant is in default with payments owed. If the tenant is in breach of its obligation to make payments on account of utilities, the landlord may send them to collections or terminate the lease.

Judgment 26 Cdo 3535/2022 of the Supreme Court of 20 February 2024

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