Counting Czech money (Illustrative image)

Czech Cabinet approves delays in paying mortgages, loans, and rent for those affected by coronavirus

The Czech government approved several financial proposals to help people affected by the coronavirus

The Czech government approved the postponement of loans and mortgages repayments for up to six months. The proposal still needs to be approved by the Czech Parliament and signed into law by the president.

People and businesses have to ask for a payment postponement and declare that this is due to a pandemic. Interest and principal payments would then be interrupted. The move applies to loans taken out before March 26.

The Cabinet also decided that companies that had to close operations due to measures would be entitled to defer rent from March 12 to June 30, and pay back in up two years.

The deferral does not apply to credit cards, overdrafts, revolving loans, operating leases or loans related to capital market transactions. Also, repayments cannot be deferred for loans where the debtor has been late in repayment for over 30 days as of March 26.

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“After intensive negotiations with representatives of the Czech National Bank and four major domestic banks, we have prepared a solution for those who were most affected by the current situation. Postponement of installments will be voluntary for clients and will not involve any fees,” Finance Minister Alena Schillerová (for ANO) said.

Schillerová added that the interruption in repayments will not cause a negative entry in the bank register for the client, leading to a bad credit rating.

The government also passed a bill stating that a tenant cannot be evicted from an apartment if they are unable to pay rent due to the coronavirus pandemic. They will be able to pay the back rent by the end of May 2021, Minister for Regional Development Klára Dostálová (for ANO) said.

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She added that this was not rent forgiveness, as the full amount will have to be paid eventually.

Loan repayments to the State Housing Development Fund would also be suspended until November 30, 2020. The repayment of principal and loan accessories would be deferred.

Bills for services such as electricity and water will also be delayed, as these require someone to come and read the meters, which is not safe under current conditions.

Companies forces to close due to coronavirus will also be able to suspend rent payments and have until March 31, 2022, to make the payments up. The Export Guarantee and Insurance Company (EGAP) will also offer help to businesses.

The Chamber of Deputies should deal with the proposals in abbreviated proceedings due to declared state of legislative emergency.

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