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september 2009.pdf - CBS OBSERVER

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4 0<br />

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 />

1

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