september 2009.pdf - CBS OBSERVER
september 2009.pdf - CBS OBSERVER
september 2009.pdf - CBS OBSERVER
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After a resounding defeat in a Rental Review<br />
Board ruling and subsequently being portrayed<br />
in the press as a greedy landlord<br />
this January, <strong>CBS</strong> got a three quarter turnaround<br />
in the appeal this summer. The<br />
original ruling was that <strong>CBS</strong> should return<br />
three-quarters of the rent paid by a student<br />
plaintiff, 17,406 out 23,946 DKR for a five<br />
month period. In the appeal-ruling, the<br />
Rental Review Board practically reversed<br />
their position, finding a rent of 19,620 DKK<br />
appropriate for the five month period and<br />
ruling that <strong>CBS</strong> should return 4,326 DKR to<br />
the plaintiff, amounting to about a quarter of<br />
the rent paid.<br />
The legal battle, however, is far from over.<br />
The initial ruling<br />
On January 7th, 2009 Huslejnævnet i<br />
København (Copenhagens Rental Review<br />
Board) reviewed the complaints filed by<br />
<strong>CBS</strong> undergraduate student, Julia Engelhardt.<br />
She was renting a 12.5 square meter<br />
room plus access to common facilities on<br />
Hammerensgade, a property administered by<br />
<strong>CBS</strong> International Office for housing international<br />
exchange students. She complained<br />
primarily about problems of cleanliness and<br />
lack of service.<br />
The Rental Board reviewed her case<br />
and found that <strong>CBS</strong> was operating reasonably<br />
but was overcharging her, based on<br />
her amount of living space. After what can<br />
only be described as a rather unfortunate<br />
blunder, notices were lost and <strong>CBS</strong> failed<br />
to respond to the charges by the requisite<br />
time. Therefore a ruling was passed that<br />
Engelhardt should have her five months rent<br />
reduced from 23.946 to 6.540 DKK.<br />
In the wake of Julia Engelhardt’s case<br />
complaints were made by 15 other renters<br />
in <strong>CBS</strong>-administered properties, seeking rent<br />
reductions and refunds.<br />
Collateral damage<br />
When the ruling came out, national broadcaster<br />
DR ran several stories portraying <strong>CBS</strong><br />
as a greedy landlord. This caused a huge<br />
backlash, creating a public relations nightmare<br />
for <strong>CBS</strong> and even threatened <strong>CBS</strong>’ corporate<br />
sponsorships, some of whom would<br />
rather withdraw their financial support than<br />
be party to overcharging students. This connection<br />
was relevant because a part of <strong>CBS</strong>’<br />
income from corporate partner sponsorships<br />
goes towards covering<br />
mortgages through<br />
<strong>CBS</strong>’ Boligfond, a<br />
financial trust established<br />
in order to<br />
provide housing for<br />
international exchange<br />
students and scholars.<br />
Politicians also<br />
weighed in on the<br />
issue, demanding a<br />
review over how <strong>CBS</strong><br />
could charge such<br />
high rents. <strong>CBS</strong> vehemently<br />
responded to<br />
charges of profiteering, citing the high costs<br />
of guaranteeing housing and acquiring well<br />
situated student housing at the height of<br />
a volatile housing market in Copenhagen,<br />
where incoming international students have<br />
absolutely no advantages in the free-for-all<br />
competition with the better connected Danish<br />
students.<br />
Shedding light on the issue<br />
Bringing these facts to light in the appeal<br />
resulted in the Appeals Board reversing the<br />
Rental Review Board’s initial decision and<br />
tripling the amount<br />
considered to be an<br />
acceptable rent. In the<br />
Engelhardt case the<br />
rent was raised to just<br />
over 19.620 DKK. <strong>CBS</strong><br />
is paying back the difference<br />
and is awaiting<br />
further appeals on<br />
the remaining cases.<br />
- We are not predators<br />
here, we are<br />
barely able to cover<br />
our costs. Giving<br />
guarantees on housing<br />
is extremely expensive and we do everything<br />
in our power to cut costs, explains <strong>CBS</strong><br />
International Office Director, Robin Jensen<br />
and adds:<br />
i n - h o u s e n e w s p a p e r f o r co p e n h a g e n b u s i n e s s s c h o o l<br />
Rent-appeal saves <strong>CBS</strong> money – and image<br />
Just after the New Year, <strong>CBS</strong> took a beating in Copenhagen’s municipal Rental Review Board. The rent that <strong>CBS</strong>’ charged<br />
for its international student housing was ruled to be four times as high as reasonable, and <strong>CBS</strong>’ image took a battering in<br />
the media. The appeal this summer, however, has mostly acquitted <strong>CBS</strong> of any wrongdoing<br />
l a n d l o r d i s s u e s<br />
By William Tylander<br />
Photo: Rafa Irusta, Dreamstime.com<br />
‘We are operating our<br />
facilities at cost. If we are forced to<br />
lower our rents we will not be able<br />
to honour our lease agreements<br />
and will have to seriously reduce<br />
our available housing. That is not<br />
something we can afford to do.<br />
Peter Pietras<br />
University Director<br />
After <strong>CBS</strong> took a beating in the first ruling from the municipal Rental Review Board, the<br />
Appeals Board raised the ‘acceptable rent’ by almost 300 percent.<br />
- It’s a quandary. We cannot just shrug<br />
our shoulders and leave our international<br />
exchange students to find housing on their<br />
own. <strong>CBS</strong> operates under a government<br />
mandate to internationalize, but we are not<br />
provided with the resources to do so. In a<br />
city unable to provide<br />
the most basic need<br />
of having a place to<br />
stay for an international<br />
student without<br />
knowledge of Danish<br />
and without any personal<br />
connections<br />
in Copenhagen, we<br />
have done our best to<br />
deliver a solution. But<br />
in order to do so we<br />
have to charge rents in<br />
line for what it costs<br />
us to operate.<br />
Unsupported commitments<br />
In 2006 Denmark took on broad multi-lateral<br />
economic and political agreements to achieve<br />
greater internationalization, with the education<br />
sector as a committed key component<br />
to these plans. <strong>CBS</strong> had at that point already<br />
‘While it was of some<br />
comfort that the Rental Review<br />
Board raised their position on<br />
acceptable rent almost 300<br />
percent from their initial decision,<br />
the acceptable rent still doesn’t<br />
come up to the amount that it costs<br />
us to rent out those rooms.<br />
Robin Jensen<br />
International Office Director<br />
worked on expanding the school’s international<br />
profile for a number of years, an<br />
aspect of this being entering into reciprocal<br />
student exchange partnerships with foreign<br />
universities. A key component of these partnerships<br />
has been a guarantee on student<br />
housing.<br />
<strong>CBS</strong>’ International Office had explored all<br />
available options in the public sector before<br />
going out on a limb to secure properties for<br />
their exchange agreements. Placement in<br />
established student housing has been very<br />
hard to come by, as these generally operate<br />
at very full capacity, on top of which there<br />
has been a building freeze on establishing<br />
new units.<br />
<strong>CBS</strong> has taken part in discussions about<br />
subsidies and spots in public housing locally<br />
with Copenhagen’s and Frederiksberg’s<br />
municipalities to no avail. <strong>CBS</strong> has also<br />
addressed the predicament on a national<br />
level to the ministries of Housing and Science<br />
both. And the use of income earmarked for<br />
education and research to subsidize student<br />
housing is completely out of the question as<br />
it would violate <strong>CBS</strong>’ mandate as a publically<br />
financed university.<br />
- We are operating our facilities at cost.<br />
If we are forced to lower our rents we will<br />
not be able to honour our lease agreements<br />
and will have to seriously reduce our available<br />
housing. That is not something we can<br />
afford to do, explains University Director<br />
Peter Pietras, who notes that losing housing<br />
for exchange students will have serious consequences,<br />
reducing <strong>CBS</strong> students’ opportunities<br />
abroad.<br />
The fight goes on<br />
With the first of <strong>CBS</strong>’ sixteen student housing<br />
cases seeing a substantial turnaround on the<br />
appeal, the outlook for the future of <strong>CBS</strong>’<br />
ability to offer housing is better. But <strong>CBS</strong> is<br />
still far from break-even, and thus the fight is<br />
not over.<br />
- While it was of some comfort that the<br />
Rental Review Board raised their position<br />
on acceptable rent almost 300 percent from<br />
their initial decision, the acceptable rent<br />
still doesn’t come up to the amount that it<br />
costs us to rent out those rooms, explains<br />
International Office Director, Robin Jensen.<br />
<strong>CBS</strong>’ cases will now go on to be heard in<br />
civil court, where <strong>CBS</strong> hopes for an even<br />
more realistic ruling than the Rental Review<br />
Boards appeal-ruling. Finding a tenable solution<br />
to the international student housing<br />
question however must also happen outside<br />
of the courts and in<br />
the political arena.<br />
- What is needed is<br />
for officials on all levels<br />
and in the different<br />
ministries to sit down<br />
together and work<br />
out a comprehensive<br />
solution, notes Robin<br />
Jensen.<br />
Although Robin<br />
Jensen deeply regrets<br />
the bad will and lack<br />
of trust that the media<br />
coverage of this issue<br />
has generated, she<br />
hopes that there now finally will be efforts at<br />
the highest level to help the universities solve<br />
the problem of how to house their international<br />
students in a fair and decent manner.<br />
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