2006/02/28 - Pl. ÚS 20/05: Rent Control

28 February 2006

HEADNOTES

The

long-term inactivity of the Parliament of the Czech Republic,

consisting of failure to pass a special legal regulation defining cases

in which a landlord is entitled to unilaterally increase rent, payment

for services relating to use of an apartment, and to change other

conditions of a lease agreement ( § 696 par. 1 of the Civil Code), is

unconstitutional and violates . 4 par. 3, . 4 par. 4 and . 11 of the

Charter of Fundamental Rights and Freedoms and . 1 par. 1 of Protocol

no. 1 to the Convention for the Protection of Human Rights and

Fundamental Freedoms.

The

Constitutional Court here again points to the conclusions of its

decision making practice in matters of rent control, in which it

emphasized that it is not permissible to shift the social burden of one

group of people (tenants) to another group (landlords), and adds that it

is also not permissible to create various categories of landlords,

depending on whether the rent in apartments owned by a group is subject

to rent control or not. The consequences of the legislature’s inactivity

lead the Constitutional Court, being aware of its position as the body

for protecting constitutionality, to the necessity of replacing the

instruments for legal protection of landlord which are lacking at the

level of “ordinary” law by applying the principles of constitutional law

regulation. That is why the Constitutional Court insists on fulfillment

of the fundamental function of the general courts, i.e. ensuring

proportional protection of subjective rights and interests protected by

law, and requires that the general courts provide them to landlords by

not denying their complaints demanding determination of increased rent

by referring to the inadequacy of the legal framework. That means that

the general courts, even despite the absence of the specific regulations

envisaged in § 696 par. 1 of the Civil Code must decide to increase

rent, depending on local conditions, so as to prevent the abovementioned

discrimination. In such decision making the courts must refrain from

arbitrariness; a decision must be based on rational arguments and

thorough weighing of all the circumstances of a case, the application of

natural principles and the customs of civic life, the conclusions of

legal learning and settled, constitutionally consistent court practice.

The

selected judicial route to a solution is an expression of evaluating

the relationship between the legislative and judicial branches. That

relationship arises from the separation of powers in the state, as

established in the Constitution. A material analysis necessarily leads

us to conclude that this separation is not a purposes in and of itself,

but pursues a higher purpose. From its very beginnings it was subjected

by the constitutional framers to an idea based above all on service to

the citizen and to society. Every power has a tendency to concentration,

growth and corruption; absolute power to an uncontrollable corruption.

If one of the branches of power exceeds its constitutional framework,

its authority, or, on the contrary, does not fulfill its tasks and thus

prevents the proper functioning of another branch (in the adjudicated

case, of the judicial branch), the control mechanism of checks and

balances, which is built into the system of separation of powers, must

come into play. The Constitution defines the main task of the judicial

branch as follows: “Courts are called upon above all to provide

protection of rights in the legally prescribed manner” (. 90) and “The

fundamental rights and basic freedoms shall enjoy the protection of

judicial bodies” (. 4). The Constitutional Court’s position arises from

the same framework of a democratic law-based state: “The Constitutional

Court is the judicial body responsible for the protection of

constitutionality” (. 83). From these viewpoints, the general courts,

including the Supreme Court (cf. decision of 31 August 2005, file no. 26

Cdo 867/2004), err if they refuse to provide protection to the rights

of natural persons and legal entities who have turned to them with a

demand for justice, if they deny their complaints merely with a

formalistic reasoning and reference to the inactivity of the legislature

(the non-existence of the relevant legal regulations), after the

Constitutional Court, as protector of constitutionality and review

thereof, opened the way for them through its decisions. The

Constitutional Court has repeatedly declared the unequal position of one

group of owners of rental apartments and buildings to be discriminatory

and unconstitutional, and the long-term inactivity of the Parliament of

the CR to be incompatible with the requirements of a law-based state.

The Constitutional Court, by the will of the constitutional framers, is

responsible for the maintenance of the constitutional order in the Czech

Republic, and therefore it does not intend to abandon this obligation,

it calls on the general courts to fulfill their obligations, and refuses

to rely merely on pressure from the European Court of Human Rights.



CZECH REPUBLIC

CONSTITUTIONAL COURT

JUDGMENT


IN THE NAME OF THE CZECH REPUBLIC

 


The

Plenum of the Constitutional Court, composed of the Chairman Pavel

Rychetský, judge Stanislav Balík, František Duchoň, Vlasta Formánková,

Vojen Güttler, Pavel Holländer, Ivana Janů, Vladimír Kurka, Dagmar

Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Miloslav Výborný and

Eliška Wagnerová, decided on 28 February 2006 in the matter of a

petition from the Municipal Court in Prague seeking the annulment of §

685 to § 716 of Act no. 40/1964 Coll., the Civil Code, as amended by

later regulations, with the participation of the Chamber of Deputies and

of the Senate of the Parliament of the Czech Republic, as follows:


I. The long-term inactivity of the Parliament of the Czech Republic,

consisting of failure to pass a special legal regulation defining cases

in which a landlord is entitled to unilaterally increase rent, payment

for services relating to use of an apartment, and to change other

conditions of a lease agreement, is unconstitutional and violates . 4

par. 3, art. 4 par. 4 and . 11 of the Charter of Fundamental Rights and

Freedoms and . 1 par. 1 of Protocol no. 1 to the Convention for the

Protection of Human Rights and Fundamental Freedoms.

II. The petition to annul § 696 par. 1 of the Civil Code is denied.

III. The petition to annul § 685 to § 695, § 696 par. 2, § 697 to § 716 of the Civil Code is denied.

 


REASONING

A.
 

The

petitioner, in accordance with Art. 95 par. 2 of the Constitution of

the Czech Republic sought to have the Constitutional Court issue a

judgment annulling the special provisions on lease of an apartment in

division four, chapter seven, part eight of Act no. 40/1964 Coll., the

Civil Code, as amended by later amendments (§ 685 to § 716 of the CC).

It stated that in the matter of the plaintiff, Ing. arch. T. Z.,

represented by Mgr. S. N., attorney, against the defendant, R. P., the

District Court of Prague 5 decided, in its verdict of 23 April 2004,

ref. no. 6 C 392/2003-27, by denying the complaint with the petition for

payment of CZK 3,668 and conveniences. In that matter, the plaintiff,

as the landlord of the building in which the defendant rents an

apartment, charged rent in the usual amount under § 671 par. 1 of the

Civil Code, because he claimed the amount of rent was never agreed on,

and until 19 March 2003 it was only officially set by a legal

regulation, which, however, was annulled by judgments of the

Constitutional Court. According to a private expert evaluation, the

usual level of rent is CZK 4,839, but the defendant paid the plaintiff

for July 2003 only CZK 1,171, and therefore the plaintiff seeks payment

of the difference. After the presentation of evidence, the court of the

first level concluded that the petition was not justified, based on the

determination that the defendant was using the apartment on the basis of

an agreement on use of an agreement entered into on 2 May 1990. The

amount of CZK 1,171, paid in rent in July 2003, corresponds to the rent

last stated by decree no. 176/1993 Coll. The court of the first level

assessed these findings under § 696 par. 1 of the CC and stated that, in

view of the fact that at the present time there is no legal regulation

which would, within the scope of that provision, provided an opportunity

to increase rent for use of an apartment when the general provisions of

the Civil Code concerning rent can not be applied, the plaintiff’s

demand for payment of the usual rent is not justified, and the starting

point must be the last determined rent level under decree no. 176/1993

Coll. The plaintiff filed an appeal against the verdict, in which he

objected that the decision is inconsistent with the Constitutional

Court’s conclusions stated in its decisions no. 231/2000 Coll., no.

528/2002 Coll. and no. 84/2003 Coll., because the court of the first

level provided protection to an unconstitutional situation, and the

court of the first level should have presented the matter to the

Constitutional Court with a petition to annul the provision of the Act

which is inconsistent with the Constitution, i.e. § 696 of the CC.

According to the plaintiff the contested decision is inconsistent not

only with constitutional legal regulations, but also inconsistent with

the law itself; decree no. 176/1993 Coll. was not an implementing legal

regulation for the Civil Code, but a regulation issued on the basis of

the Act on Prices, no. 526/1990 Coll. The provision of § 696 par. 1 of

the CC was never fulfilled, which the Constitutional Court also stated

in its judgment. Therefore, according to the plaintiff, § 696 of the CC

can not be applied if there is no legal norm implementing it, and the

court should have proceeded according to § 671 par. 1 of the CC and set

the level of rent as the usual rent.
 

The

appeals court, after reviewing certain evidence, concluded that it was

appropriate to proceed according to § 109 par. 1 let. c) of the Civil

Procedure Code. The evidence introduced indicates that the present

dispute does not involve setting the rent as a condition for entering

into a new lease agreement, when it would be possible, in the absence of

a special implementing regulation envisaged by § 696 par. 1, to take as

a starting point the usual rent under § 671 par. 1 of the CC. A lease

agreement was duly entered into between the plaintiff’s legal

predecessor and the defendant, included the rent amount determined by

the previously valid decree on rent, which also governed rent control.

The plaintiff, as the legal successor of the previous owner, assumed all

the rights and obligations of the landlord which arise from a concluded

lease agreement. This conclusion is not changed by the fact that decree

no. 176/1993 Coll., as well as other regulations, were annulled by the

Constitutional Court. In this conflict the plaintiff’s entitlement must

be seen as an entitlement to unilaterally increase rent which was

previously duly set, and because this involves legal evaluation of the

matter, the court is not bound in this regard by the plaintiff’s

petition, which rejects the cited application of the law. For that

reason the court of the first level decided correctly under § 696 par. 1

of the CC, but it reached an erroneous legal conclusion if it concluded

that the complaint must be denied due to the inadequate legal

regulations concerning § 696 of the CC.
 

The

petitioner also points out that under § 493 of the CC an obligation

relationship can not be changed without the consent of the parties,

unless the Civil Code provides otherwise. Under § 696 par. 1 of the CC a

special regulation shall provide the method of calculating rent,

payment for services related to the use of an apartment, the manner of

paying them, as well as cases in which the landlord is entitled to

unilaterally increase the rent and charges for services relating to the

use of an apartment, and change other conditions of a lease agreement.

These provisions indicate that the Civil Code classified lease

relationships to an apartment among exceptional obligations

relationships, where a change in the obligations can also occur on the

basis of a unilateral legal act by the creditor (landlord). This

exception in the landlord’s rights is balanced on the other side by the

fact that the tenant enjoys increased protection arising from the

special regulation of rights and obligations from lease of an apartment

(e.g. restriction of the [landlord’s] ability to give notice terminating

the lease only to specified grounds, only with the consent of the

court, and in statutory cases also for compensation). In the

petitioner’s opinion, § 696 par. 1 of the CC can not be interpreted to

the effect that, in the absence of a special legal regulation a petition

for payment of increased rent must be denied, because by proceedings

that way the court would provided protection for an unconstitutional

situation, which was found unconstitutional in all the above cited

judgments of the Constitutional Court. That would violate the

fundamental constitutional principle enshrined in . 90 of the

Constitution of the CR, under which the courts are called upon primarily

to provide protection for rights in a statutorily prescribed manner. In

the petitioner’s opinion it is also necessary to begin with the

principle that in civil law relationships one fundamentally can not deny

protection to subjective rights with reference to non-existing legal

norms; a court is required, in its decisions, to provide protection to

the rights of a landlord who seeks an increase of regulated rent.
 

The

petitioner, in the position of the appeals court, considered whether

the dispute could be resolved with the help of statutory analogy (§ 853

of the CC), or analogy of laws, and also applied the opinion of the

Plenum of the Constitutional Court stated in decision no. 21/1996. The

petitioner concluded that in the absence of a direct implementing

statutory regulation to § 696 par. 1 of the CC, in this case, it was not

possibly to apply by analogy either the general Civil Code provisions

on a lease agreement (§ 663 - § 684) or the general provisions on the

law of obligations (part eight, chapter one of the CC), or the

provisions of other civil law regulations, because none of them regulate

the conditions under which it would be possible without prior agreement

to unilaterally change the amount of payments under a lease agreement.

In agreement with the court of the first level, the petitioner concluded

that it is also not possible to proceed under Act no. 526/1990 Coll.,

on Prices, because that Act does not provide any conditions under which

it would be possible to assess the validity of a unilateral legal act by

the landlord aimed at increasing rent. Such conditions could be

specified only by an appropriate civil law regulation, and the appeals

court referred in full to the legal analysis presented on that issue by

the Constitutional Court in judgment no. 528/2002 Coll. In that regard

the petitioner concluded that even with the help of analogy the dispute

in question can not be resolved.
 

Therefore,

the petitioner proposed that the existing unconstitutional situation be

resolved by the Constitutional Court annulling the special part of the

Civil Code (§ 685 – § 716 of the CC), which regulates the rights and

obligations arising from lease of an apartment. The interconnectedness

of the entire legal framework on lease of an apartment does not permit

proposing the annulment of only some provision, e.g. § 696 par. 1 of the

CC. That provision is an exception provided to protect the rights of

the landlord, an is balanced by increased protection of the rights of a

tenant during termination of a lease. In the petitioner’s opinion the

existing legal regulation of lease of an apartment, in the absence of an

implementing regulation for § 696 par. 1 of the CC, is unbalanced and

one-sidedly gives an advantage to the tenant’s position. Therefore, it

is inconsistent with the principle of equal protection of property

rights (. 11 par. 1 second sentence of the Charter of Fundamental Rights

and Freedoms, the “Charter”), as well as being inconsistent with the

principle that forced limitation of property rights is possible in the

public interest, on the basis of law, and for compensation (. 11 par. 4

of the Charter). The petitioner also emphasizes that it does not

consider unconstitutional the content of the special provisions on lease

of an apartment, but the gap in legislative activity consisting of the

fact that neither by the deadline set by judgment no. 231/2000 Coll. or

even in the following more than 3 years, the legal framework envisaged

by § 696 par. 1 of the CC has not been passed. The petitioner is aware

of the gravity of its petition, but it is not competent to resolve in

the dispute at hand whether and what social consequences its petition

might have in social, economic, and other areas. It adds that in this

specific case annulling the entire legal framework regulating apartment

leases would no longer make it possible for the plaintiff to seek

payment of higher rent by the defendant than had been set previously.

However, the inequality of rights and obligations from the lease

relationship in question would be removed, because all rights and

obligations arising from the lease agreement to the apartment would have

to be subject to the general regulations for a lease agreement, as well

as the general framework for obligation relationships and general

provisions of the Civil Code. Any excesses in the exercise of rights and

obligations from the lease agreement would have to be resolved in

court, as is done with other lease agreements.
Because only the

Constitutional Court is authorized to evaluate the consistency of

individual provisions of the Civil Code with the Charter, the Municipal

Court in Prague, pursuant to . 95 par. 2 of the Constitution and § 64

par. 3 of Act no. 182/1993 Coll., on the Constitutional Court, as

amended by later regulations (the “Act on the Constitutional Court”),

this petition to annul the special provisions on lease of an apartment.
 


B.
 

The

Chamber of Deputies of the Parliament of the Czech Republic, in its

opinion statement, signed by its chairman, PhDr. Lubomír Zaorálek, first

recapitulated the petitioner’s position, and then stated that in 1991,

as part of the reform of the legal order, an extensive amendment of the

Civil Code was approved, published in the Collection of Laws as no.

509/1991; its aim was, among other things, to express the fundamental

principles of enshrining civil rights and freedoms in the Constitution.

This amendment inserted part eight, including the contested chapter

seven, division four, entitled “Special Provisions on Apartment Leases.”

It was largely modeled on international treaties to which the Czech

Republic has acceded and which were published as prescribed. Act no.

509/1991 Coll. was approved by the necessary majority of Federal

Assembly deputies on 5 November 1991. The Chamber of Deputies also

provides information about other laws which amended the contested

provisions, Act no. 264/1992 Coll. and Act no. 267/1994 Coll. It adds

that the acts were signed by the appropriate constitutional officials

and were duly promulgated. In view of this, it expressed the opinion

that the legislative assembly acted in the belief that the passed acts

were consistent with the Constitutional and our legal order, and that it

is up to the Constitutional Court to evaluate the constitutionality of

the contested provisions in connection with the petition from the

Municipal Court in Prague and to issue the appropriate decision.
 

The

Senate of the Parliament of the Czech Republic also first reviewed the

steps taken in introducing § 685 to § 716 into the Civil Code, and added

that this was a monolithic block of provisions concerning the return of

the classic law of obligations to our civil codex (part eight, the Law

of Obligations – § 488 to § 852). Due to the special importance of an

apartment in the life of every individual and society as a whole, a

separate place was reserved in the extensive set of sections for the

regulation of a lease relationship to this socially sensitive secondary

subject of a civil law relationship. From a legislative-technical

viewpoint, the provisions of § 685 – § 716 were included in one

division, and from a systematic viewpoint they were conceived as special

provisions related to those that govern a lease relationship generally.

It then pointed out that the rules regulating lease of an apartment

have been amended only twice, more markedly and most recently by Act no.

267/1994 Coll. On this occasion it pointed out that the amendment had

been aimed at lowering the number of acute conflicts in lease

relationships, that it generally meant a shift to the benefit of the

rights of landlords, and that the background report described the

transfer of payment of all repairs of internal furnishing of an

apartment from the landlord to the tenant as an indirect unilateral form

of increasing rent.
 

The

Senate of the Parliament of the CR, although the provisions in question

were approved at a time when it had not been formed yet, and thus did

not take part in the approval process, is aware that the critique of

rental housing does not rid it of its part in the responsibility for the

situation in this area. The Senate and individual senators tried to

take a constructive approach to resolving the problems; the Senate

largely believed that revision of rental housing must not be narrowed

simply to amendment of the Civil Code, but that it is necessary to

create a legal foundation such that the overall change of the

landlord-tenant relationship would be realistic and legitimate (i.e. a

change in the legal framework should take place on a wider basis,

synchronously with the legal frameworks governing, e.g., cooperative

housing, financial support for construction and purchasing of

apartments, with the condition sine qua non being a thorough analysis

including social discussion across a wide spectrum). Therefore, the

Senate does not find the solution for such a serious issue to be a

method of mere non-comprehensive annulment of individual provisions in

one or another statute. The Senate also pointed to the fact that in the

last five years three draft acts contained a regulation under which a

landlord could unilaterally change the rent for an apartment (under §

696 par. 1 of the CC); however, due to lack of political will the

legislative path ended in the Chamber of Deputies, without the Senate

getting to speak in the legislative process.
 

The

Senate formulated the following opinion regarding the merits of the

matter: There is no doubt that both the interest of the owner of a

rental apartment (the landlord) and the interest of the tenant are

subject to the protection of a democratic legislature. One can give

priority to the interests of one party (usually the tenant) in a certain

timeframe, but not permanently and unilaterally. Thus, the tenant’s

right to a certain level of protection corresponds to the landlord’s

obligation, on the other side, on the assumption that there is a

reasonable (justified) proportionality relationship between the means

used and the aims pursued. In other words: ever modern housing policy

involves seeking a balance between the principle of protecting the

tenant and the principle of protecting the landlord’s property, i.e.

seeking a fair balance between the requirements of the general interest

of society and the requirement to protect the fundamental rights of an

individual. Under the case law of the European Court of Human Rights the

legislature is given relatively great discretion in resolving this

problem: “States are given the right to enact such laws as they consider

necessary to regulate the use of property in accordance with the

general interest. Such laws are especially necessary and usual in the

area of housing, which is a central issue of social and economic policy

in modern societies. In order to implement such a policy, the

legislature must have a wide margin of appreciation, both in determining

whether there is a public interest authorizing the exercise of control

measures, and as regards the selection of detailed rules for

implementing such measures.” (Mellacher and others v. Austria, also

Hutten-Czapska v. Poland). The Senate then points to the Constitutional

Court’s opinion expressed in judgment no. 84/2003 Coll. In the next

part, the Senate turns its attention to the institution of tenant

protection, because the provisions proposed for derogation would de iure

remove it. After pointing out the fundamental instruments serving to

protect the tenant, as the weaker party (rent control and the provision

of an exclusive listing of grounds for giving notice of termination),

the Senate summarized that one can not think that the state would leave

the housing issue completely to the mercy of the market and give up its

ability to intervene in private law housing relationships. Housing is a

service sui generis to the individual, which the state is required to

secure thoroughly. With any kind of controls, there will unavoidably be a

limitation of one constitutionally protected right to the detriment of

another right, and therefore it is necessary to fundamentally insist

that all the criteria be met that characterize such tenant protection as

is not considered unconstitutional, by implementing a state policy

(provided it pursues a legitimate aim, is implemented through

constitutional means, is conceived as an extraordinary measure, and is a

public law intervention that is limited in time).
 

As

regards the special provisions of the Civil Code concerning apartment

leases, the Senate states that, although the entire division on

Apartment Leases primarily gives preference to tenant protection, they

also include a number which are of a “neutral” nature, and respond only

to various legal situations connected with use of an apartment (e.g.

joint rent of an apartment), and there are also provisions which are

conceived exclusively to the benefit of the landlord (the tenant’s

obligation to pay for minor repairs and expenses for routine maintenance

of the apartment, the landlord’s right of entry into the apartment,

etc.). From that, the Senate concludes that § 685 to 716 must be seen as

a complex of rules governing the rights and obligations to a specific

object – an apartment. If the object of the public interest (an

apartment, or rental housing) is unique, there is undoubtedly a need for

special regulations, which permit the regulation of situations which

are not routinely subject to them. The senate concludes that it is quite

justified for the framework in question to be a special one, and it is

difficult to reconcile it with a possible problem-free classification

under the general provisions on a lease agreement.
 


C.
 

In

evaluating the justification for the petition, the Constitutional Court

requested additional position statements, from affected entities: - the

Ministry for Local Development,
- the Tenants’ Association of the CR,
- the Civic Association of Owners of Buildings and Other Real Estate of the CR.
 

From these statements, the Constitutional Court excerpts the following information:
a) The Ministry for Local Development
The

Ministry fundamentally disagrees with the petition, and it stated that

both the government and the deputies, at their legislative initiative,

submitted to the Chamber of Deputies several new draft laws aiming to

address apartment rent; however, the Chamber of Deputies did not pass

any of them. The ministry also pointed out that the problem to which the

petitioner points is presently being addressed by the government’s

draft Act on unilateral increases of rent, which is proposed to go into

effect on 31 March 2006.

b) The Tenants’ Association of the CR
The

Tenants’ Association of the CR (the “Association”) considers the

petition fundamentally unacceptable, because granting it would lead to

unjustified, deep interference in the rights and obligations of citizens

without any sort of appropriate “compensation,” and to the termination

of a number of legal institutions which define the rights and

obligations of citizens, which would quite clearly evoke considerable

legal uncertainty. It also pointed to the fact that failure to pass the

legal framework envisaged in § 696 par. 1 of the Civil Code can hardly

be replaced by actions taken by a court, without erasing the separation

between the judicial branch and the executive branch. The Association

considers it curious that the petitioner seeks annulment of the

provisions on apartment leases, but simultaneously emphasizes that it

does not consider these provisions to be unconstitutional, that its aim

is to “provoke” the legislative bodies to address the legal

relationships concerning apartment leases. A petition is not competent

to fulfill this aim, because § 696 par. 1 of the Civil Code is the only

provision which permits unilateral increases of rent (though under

conditions which are to be provided by a special legal regulation). The

Association also requests that a legal regulation be passed as envisaged

by § 696 par. 1 of the Civil Code, but it considers it quite out of the

question, for that to happen without a “positive,” i.e. statutory,

regulation. The Association asked that the petition not be granted.
 

c) The Civic Association of Owners of Buildings and Other Real Estate of the CR
The

Civic Association of Owners of Buildings and Other Real Estate of the

CR (the “Owners’ Association”) provided the Constitutional Court a

detailed position statement, including extensive appendices. In its

statement it primarily emphasized that in Czech law the right to housing

is logically not conceived as a fundamental human right, unlike the

right to property, and it referred to the classification of lease

relationships, including rent control, expressed in the Constitutional

Court’s judgments. The Owners’ Association considers the proposed

annulment of § 685 – § 716 of the Civil Code to be a measure which would

significantly assist the necessary correction or removal of a now

overcome unconstitutional communist relic, i.e. the consequences of the

legal framework of so-called “personal use of an apartment”; the

existing legal framework of a protected lease – in its opinion – grossly

exceeds the normal limits of lease rights standard in Europe. In

another part of its position statement the Owners’ Association described

the most fundamental and most disputed institutions of a protected

lease, those being:
- the creation of the relation not on a voluntary basis, i.e. not on the basis of the parties’ freedom of contract,
- the inheritability of a lease to apartments belonging to other subjects,

- the tenant’s authorization to manage an apartment which does not

belong to him, even in cases where he abandons the apartment,
- the

inability to terminate the lease in accordance with the free will of the

landlord, while the tenant is provided that right, not restricted by

anything,
- the obligation of a former landlord to provide a substitute apartment of equal value to former tenants
and

it formulated detailed arguments concerning them. Upon summarizing

them, it concludes that tenants in apartments with protected controlled

rent (for a definite period) can apply the entire triad of property

rights to the apartment, and they use the apartments without restriction

for often laughably low payments; the Owners’ Association objects that

the owner has no rights of disposal, because he can not freely

termination the lease of his apartment and freely lease his apartment.

Therefore, it considers the contested provisions, in view of the manner

in which the lease relationship is created, to be such fundamental

interference in the rights of owners, that in the aggregate they are no

longer consistent with the constitutional protection of property rights.
 

As

regards the essence of the problem, the Owners’ Association pointed out

that the amount of so-called controlled rent is not even sufficient to

cover the expenses of mere maintenance of a leased apartment, let alone

improving it or obtaining appropriate profit, and it pointed to the

attached materials from expert institutions. These sources agree that

the expenses of mere maintenance range from 2.7 to ca. 4 % z of the

current annual maintenance price of an apartment; according to the

Ministry for Local Development, at the present time the average

regulated rent is equal to ca. 1.2 % of the current annual maintenance

price.
 

The Owners’

Association considers the current situation of petrified regulation of

apartment leases in the Civil code to be bad legally, economically and

in terms of the national economy. It states that protected leases under

the regime of the contested part of the Civil Code with rent set

according to the annulled regulations on rent control apply in

approximately 17% of housing stock, that is, in about 740,000

apartments, of which just under 300,000 apartments are in privately

owned buildings. Therefore, in the conclusion of its statement it

formulates three alternative recommendations:
a) If the

Constitutional Court fully agrees to annul the entire legal framework

for apartments leases, nothing will happen that can not be resolved in

the framework of the general regulations of leases; it will thereby

simultaneously require the state to resolve the problem with a new legal

framework.
b) It is evident that certain provisions in the

regulations of apartment leases are neutral from the viewpoint of

fundamental human rights; therefore, the Owners’ Association believes

that it would be sufficient for the Constitutional Court to annul only

the constitutionally disputed provisions, that is, § 685 par. 1, last

sentence, § 696 par. 1, §§ 706, 708, 712, 712a, 713 and 715, last

sentence.
c) If the Constitutional Court wished to minimize its

intervention, it would be possible to annul only the most substantial

and most problematic provisions, which are, at present, § 685 par. 1,

last sentence, § 696 par. 1 and § 711 of the Civil Code.
 

The

Civic Association of Owners of Buildings and Other Real Estate of the

CR requested that it be given the status of a secondary party to the

proceedings, by analogy under § 76 par. 3 of the Act on the

Constitutional Court. The Constitutional Court did not decide on this

request, because application by analogy of the cited provision does not

apply in proceedings to annul a statute or part thereof.
 


D.
 

From

the file of the District Court for Prague 5, file no. 6 C 392/2003, the

Constitutional Court determined that it was conducting proceedings in

which the plaintiff, as the landlord of a particular apartment in Prague

5, sought to have an obligation imposed upon the defendant, as tenant

of that apartment, to pay him an amount corresponding to the difference

between the amount of usual rent (per an expert assessment) and the

amount paid for the month of July 2003. The plaintiff complained that

the defendant’s rent was set by law, by transformation of personal use

of an apartment, and that the amount of rent had not been agreed between

the parties. After the Constitutional Court annulled the sub-statutory

legal regulations on rent control, the plaintiff tried to agree on a

fair rent, but the defendant did not agree to his proposal. The court of

the first level denied the complaint, when it accepted as proven that

there was a lease relationship between the parties, established by an

agreement on use of an apartment of 2 May 1990, that the tenant paid

rent for use of the apartment which corresponded to the amount last set

under decree no. 176/1993 Coll., annulled by Constitutional Court

judgment no. 231/2001 Coll., with effect as of 31 December 2001, and

that the complaint was not justified. The question of the amount of rent

was disputed by the parties, and the court stated that at the present

time there is no legal regulation which would at present determine the

question of the amount of rent for use of an apartment. In view of this

inadequacy in the legal framework, where on the one hand a Civil Code

provision refers to a special legal regulation, which, however, does not

exist, and on the other hand it is not possible to apply the general

Civil Code provisions concerning leases (§ 671 of the Civil Code), the

court concluded that § 969 (sic, should be 696) of the Civil Code must

be applied to the legal relationship in question, as the amount of rent

was determined by decree on the last day before it was annulled. If the

lease relationship between the parties continued, the court concluded

that the amount of rent set by the decree as of the day it was annulled

is the present amount of rent. Although the court sees considerable

inequality in the relationships between the landlord and tenant, as the

rent last set in 2001 does not correspond to the situation existing in

July 2003, at a minimum in view of the increased necessary costs for

maintenance and administration of real estate, it did not agree with the

plaintiff’s opinion that the current amount of rent is inconsistent

with Act no. 526/1990 Coll., on Prices, because that law does not apply

to the present case. The court did not find grounds for granting the

complaint in the inconsistency of the amount of rent with good morals,

as claimed by the plaintiff, because inconsistency with good morals only

permits denying legal protection to the exercise of a right, not

establishing or in any way changing legal relationships .
The

plaintiff filed an appeal against the first level verdict, in which it

objected that the contested verdict was inconsistent with constitutional

law regulations and with the law; he pointed to the fact that the

verdict is inconsistent with Constitutional Court judgments. The appeals

court reviewed the contested decision and the foregoing proceedings,

and concluded that it was appropriate to proceed pursuant to § 109 par. 1

let. c) of the Civil Procedure Code. By resolution of 21 February 2005,

ref. no. 18 Co 383/2004-44, it decided to suspend the proceedings

pending a decision by the Constitutional Court on its petition to annul

the special Civil Code provisions on apartment leases. It stated that it

does not consider unconstitutional the text of these provisions, but

the gap in legislative activity consisting of the fact that the

envisaged legal regulation had not been passed which would provide the

ability for the landlord to increase rent by a unilateral legal act had

not been passed.
 


E.
 

1.

The Constitutional Court is required – in accordance with § 68 par. 2

of the Act on the Constitutional Court – to first consider the question

whether the statute claimed to be unconstitutional was passed and issued

within the bounds of constitutionally provided jurisdiction and in a

constitutionally prescribed manner. The petitioner seeks annulment of §

685 to § 716 of the Civil Code. These are provisions which were not part

of the original Civil Code, i.e. Act no. 40/1964 Coll., which went into

effect on 1 April 1964; they were only incorporated into it at the

beginning of the 1990s, as a result of an amendment made by Act no.

509/1991 Coll., which Amends, Supplements, and Adjusts the Civil Code,

with effect as of 1 January 1992, in the form of the special provisions

on apartment leases in part eight, chapter seven, division four (note:

in view of the length of the text, it is not included in the reasoning

of the judgment).
 

Iin view

of the fact that Act no. 509/1991 Coll. was passed at the time of the

previous constitutional framework for the legislative process and

division of legislative power between the then-existing Czechoslovak

Federation and the republics, the Constitutional Court did not evaluate

fulfillment of the condition whether the Act was passed and issued

within the bounds of constitutionally provided jurisdiction and in a

constitutionally prescribed manner. For legal regulations issued before

of the Constitution of the CR went into effect the Constitutional Court –

under settled cases law – reviews only the consistency of their content

with the existing constitutional order, and not the constitutionality

of the manner in which they were created and observance of norm-creating

competence (cf., e.g., the judgment file no. Pl US 10/99, Collection of

Decisions – volume 16, 1st edition, Prague: C. H. Beck, 2000, p. 119).

2.

With effect as of 1 January 1993, some of the provisions in question

were subject to minor changes, based on Act no. 264/1992 Coll., which

Amends and Supplements the Civil Code, Annuls the Act on State Notary

Offices and Proceedings Before the State Notary’s Office (the Notarial

Code), and Amends and Supplements Certain Other Acts:
a) in § 707 par. 2 the words “state notary office” were replaced by the word “the court”,
b) letter i) was added to § 711 par. 1; it reads:

c) “in the case of a special purpose apartment or an apartment in a

special purpose building and the tenant is not a person with a health

disability,”
d) a new paragraph 4 was inserted into § 711; it reads:

“4) In the case of a special purpose apartment or an apartment in a

special purpose building, notice of termination of the lease can be

given under paragraph 1 only upon the prior consent of the person at

whose expense that apartment was established, or his legal successor, or

the consent of the appropriate body of the republic which recommended

concluding the lease agreement under the laws of the national councils.”


 

Because Act no. 264/1992

Coll. was also passed when the previous constitutional framework of the

legislative process and division of legislative competence was in

effect, the Constitutional Court did not evaluate fulfillment of the

condition whether it was passed and issued within the bounds of

constitutionally provided jurisdiction and in a constitutionally

prescribed manner (see above).

3. With effect as of 1 January

1995 another change of the provisions in question was made, by Act no.

267/1994 Coll., which Amends and Supplements the Civil Code with effect

as of 1 January 1995.
a) § 685 par. 1 reads:
“1) The lease of an

apartment is based on a lease contract under which the lessor (the

landlord) permits the lessee (the tenant) to use the apartment in return

for payment of rent, either for a definite period or without

determining the period of use. The lease of an apartment is protected;

the lessor may give notice of termination to the lessee only for grounds

determined by law.”.
 

b) § 686 par. 1 reads:

“1) The lease contract must contain a description of the flat

(apartment) and its conveniences, the extent of its use, the amount of

rent or the method of its calculation, as well as other payments for

services (supplies) related to the use of the flat or the manner in

which they are to be calculated. The lease contract must be in

writing.”.

c) In § 692, after paragraph 2 a new paragraph 3 was inserted, which reads:

“3) After a prior written notice, the lessee is obliged to let the

lessor, or a person entrusted by the lessor, install and maintain meters

measuring heating and hot and cold water consumption, as well as read

(record) the measurements shown on such meters. The lessee must also

enable access to other technical equipment (installations) situated in

the flat and owned by the lessor.”.

d)

In § 694 this sentence was added at the end: “Where this duty is

breached, the lessor is entitled to require the lessee to eliminate the

effected changes and alterations without delay.”.

e)

In § 706 par. 1 in the first sentence, after the words “daughter-in

law, who” the words “shall demonstrate that” were inserted, and in the

second sentence after the words “support, if” the words “shall

demonstrate that” were inserted.

f) In § 709 the words “apartments permanently designated as” were deleted.

g) In § 710 par. 3 the part of the sentence after the semicolon was deleted.

h) § 711 par. 1 let. b) reads:

“b) if the lessee has ceased to perform the work to which the lease of a

service flat is bound and the lessor needs the flat or another lessee

who will perform this work;”.

i)

In § 711 par. 1 let. h) at the end the following words were added: “or

if he uses flat without serious reasons only occasionally;”.  

j) A new paragraph 5 was added to § 711, which reads:

“5) If the lessor did not make use of the vacated flat, without serious

reasons, for the purpose for which the court approved notice of

termination, on an application by the lessee the court may rule that the

lessor pay the lessee his moving expenses and other expenses relating

to necessary modification of the lessee’s substitute flat. The court may

further require the lessor to pay for the lessee the difference between

the rent for the hitherto leased flat and the rent for the substitute

flat for a period of up to five years, starting from the month when the

lessee moved into the substitute flat, but no later than the day when

the lease of the substitute flat is terminated by the lessee. The

lessee’s right to reimbursement of the difference in rents shall not

become statute-barred for five years. Other rights of the lessee are not

affected thereby.”.

k) § 712 reads:
Ҥ 712
1) Housing substitutes are substitute flats and substitute accommodation.
2)

A substitute flat is a flat which, according to its size and

conveniences, provides for the lessee and members of his household

accommodation for dignified human habitation. If the lease relationship

was terminated by the lessor giving notice for reasons stated under §

711 par. 1 let. a), b), e), f) or i), the lessee shall have the right to

a substitute flat which, in the local conditions, is essentially

equivalent to the flat which he must vacate (an adequate substitute

flat). The court may rule with regard to reasons which merit special

consideration that the lessee is entitled to a substitute flat which has

a smaller floor space than the one which he is vacating. If the lease

relationship was terminated by the lessor giving notice for reasons

stated under § 711 part. 1 let. b) and the lessee stopped performing

work for the lessor without a serious reason, it is sufficient to

provide the lessee on his vacating the flat with shelter; the court may

rule that for reasons which merit special consideration the lessee has

the right to a substitute flat of a smaller floor area, lower quality

and with fewer conveniences, possibly located outside the municipality

in which the flat which he is vacating is situated, or to substitute

accommodation.
3) In cases under § 705 par. 2 first sentence, it is

sufficient to provide substitute accommodation for a divorced spouse who

must vacate the flat; however, the court may decide that, for reasons

which merit special consideration, the divorced spouse shall be entitled

to a substitute flat. In cases under § 705 par. 1 and par. 2, second

sentence, a divorced spouse is entitled to a substitute flat; for reason

which merit special consideration, the court may rule that the divorced

spouse is entitled to substitute accommodation only.
4) Substitute

accommodation means a one-room flat, or a room in a house for single

persons, or the sub-lease of a furnished or unfurnished part of another

lessee’s flat.
5) If the lease relationship is terminated by the

lessor giving notice under § 711 par. 1 let. c), d), g) or h), it shall

be sufficient to provide shelter. However, if a family with minor

children is involved and if the lease relationship is terminated by the

lessor’s notice under § 711 par. 1 ;et. c) or d), the court may rule for

reasons which merit special consideration, that the lessee shall be

entitled to substitute accommodation, or to a substitute flat. Shelter

means temporary accommodation, until the lessee obtains proper

accommodation, and premises for storing his furniture, other household

equipment and personal belongings.
6) If the lessee is entitled to

substitute housing, he is not obliged to move out of the flat until an

adequate housing substitute is provided for him; joint lessees are

entitled to only one housing substitute.”.
l) After § 712 a new § 712a was inserted, which reads:
Ҥ 712a
In

the period between the end of the lease relationship and the last day

of the time-limit for removing things from the flat, the lessor and the

person whose lease relationship has terminated have rights and

obligations to an extend corresponding to those stipulated in § 687 to §

699 and, as appropriate, in § 700 to § 702 par. 1.”.
m) § 713 par. 1 reads:

“1) If, after the death of the lessee or the dissolution of his

marriage, his spouse or persons stipulated in § 706 par. 1 continue to

use the service flat, such persons shall not be obliged to move out of

the flat until they are provided with an adequate substitute flat. This

shall also apply if the lessee of the service flat has permanently left

the common household. In warranted cases, the court may decide (rule)

that it shall be sufficient to provide a flat of a smaller floor area,

lower quality or with fewer conveniences, possibly (if need be) a flat

located in a town (or village) other than the one where the flat from

which it is necessary to vacate is situated, or that it shall be

sufficient to provide substitute accommodation.”.
n) In § 714 the

second sentence reads: “The lessee of a cooperative flat is not obliged

to move out of the flat until a housing substitute is provided under the

conditions stipulated in § 712.”.
o) In § 719 paragraph 2 was deleted. The previous paragraph 3 and 4 are re-numbered as paragraphs 2 and 3.
 

Act

no. 267/1994 Coll. was published in part 79/1994 of the Collection of

Laws, which was distributed on 30 December 1994. From the electronic

library of the Chamber of Deputies of the Parliament of the Czech

Republic the Constitutional Court determined that the draft Act was

submitted to the Chamber of Deputies as a government draft on 26 August

1994 and distributed to the deputies as publication 1125. The draft was

passed at the 25the session of the Chamber of Deputies on 15 December

1994 by resolution no. 536; out of 163 deputies present, 96 were in

favor, 32 against, 33 abstained, and 2 did not vote.

On 16 December 1994 the Act was delivered to the president for signature. The president signed the Act on 22 December 1994.
 

Therefore,

the Constitutional Court, under § 68 par. 2 of the Act on the

Constitutional Court, found that Act no. 267/1994 Coll., which Amends

and Supplements the Civil Code, was passed and issued within the bounds

of legislative competence of the Parliament of the CR set by the

Constitution of the CR and in a constitutionally prescribed manner.

4. After the changes implemented, the text of the contested provisions is the following:
PART EIGHT
CHAPTER SEVEN
DIVISION FOUR: Special provisions on Lease of Flats (Apartments)
§ 685

1) The lease of a flat (or the lease of an apartment; in Czech “nájem

bytu”) is based on a lease contract under which the lessor (the

landlord) permits the lessee (the tenant) to use the flat in return for

payment of rent, either for a definite period or without determining the

period of use. The lease of a flat is protected; the lessor may give

notice of termination to the lessee only for grounds determined by law.
2) A lease contract for a co-operative flat may be concluded on terms laid down in the statutes of the housing co-operative.

3) Acts (laws) of the National Councils shall specify what is meant by

“a service flat,” “a special purpose flat” and “a flat in a special

purpose building,” and under what conditions a lease contract may be

concluded for the lease of such service flat, special purpose flat or

flat in a special purpose building.
 

§ 686

1) The lease contract must contain a description of the flat

(apartment) and its conveniences, the extent of its use, the amount of

rent or the method of its calculation, as well as other payments for

services (supplies) related to the use of the flat or the manner in

which they are to be calculated. The lease contract must be in writing.

2) Where no period of lease has been agreed, it shall be presumed that

the contract of lease was concluded for an indefinite period of time.

Rights and Obligations Related to the Lease of a Flat
§ 687

1) The lessor is obliged to hand over the flat to the lessee (tenant)

in a condition suitable for its proper use and to ensure that the lessee

is able to exercise the rights related to the use of such flat in full

and without disturbance.
2) Unless the lease contract provides

otherwise, minor repairs in the flat related to its use and costs

related to its routine (customary) maintenance shall be paid for by the

lessee. The term “minor repairs and expenses” related to routine

maintenance of the flat is defined in special statutory provisions.

3) The rights and obligations of a tenant-member of a certain housing

co-operative with regard to minor repairs in a co-operative flat and

payment of costs related to (customary, normal) maintenance of the flat

are regulated by the statutes of such co-operative.

§ 688

The lessee and persons who live with the lessee (tenant) in a common

household shall have the right to use the flat and the common spaces of

the building and its equipment, as well as the right to make use of

services which are rendered in connection with the use of the flat.

§ 689

The lessee (tenant) shall use duly the flat, the common spaces and the

building’s facilities as well as services rendered in connection with

the use of the flat.

§ 690

When exercising his rights, the lessee (tenant) must see to it that a

milieu is created in the building which enables the other lessees to

exercise their rights.

§ 691

Where the lessor fails to perform his obligation to remedy defects

which inhibit proper use of the flat, or which put at risk the exercise

of the lessee’s (tenant’s) right, the lessee shall have the right –

after notifying the lessor accordingly – to remedy such defects to the

extent necessary, and to demand from the lessor compensation for the

expenses that he expediently incurred. The right to compensation must be

claimed with the lessor without undue delay. The right shall extinguish

if it is not exercised within six months after removal of the defects.
 

§ 692

1) The lessee (tenant) is obliged to inform the lessor, without undue

delay, of the need of repairs in the flat whose cost is to be borne by

the lessor; the lessee must enable the execution of such repairs,

otherwise he shall be liable for the damage arising from non-performance

of this obligation.
2) Unless the lessee arranges for minor repairs

and servicing in the flat to be made in time, the lessor shall have the

right, after notifying the lessee, to make arrangements for their

execution at his own expense and to demand reimbursement of such costs

from the lessee.
3) After a prior written notice, the lessee is

obliged to let the lessor, or a person entrusted by the lessor, install

and maintain meters measuring heating and hot and cold water

consumption, as well as read (record) the measurements shown on such

meters. The lessee must also enable access to other technical equipment

(installations) situated in the flat and owned by the lessor.

§ 693

The lessee (tenant) is obliged to remedy defects and repair damage in

the house (building) which he caused himself, or which were caused by

those living with him. Where he fails to do so, the lessor has the

right, after having first notified the lessee, to remedy the defects and

repair any such damage and demand compensation (reimbursement) from the

lessee.

§ 694
The

lessee (tenant) may not carry out constructional adaptations in the flat

or any other substantial alterations (modifications) to the flat, even

at his own expense, without the lessor’s consent. Where this duty is

breached, the lessor is entitled to require the lessee to eliminate the

effected changes and alterations without delay.

§ 695

The lessor is entitled to carry out constructional adaptations in the

flat and carry out other substantial alterations to the flat, only with

the consent of the lessee, who may withhold his consent only for serious

reasons. Where such modifications are made at the order of the

competent state administrative authority, the lessee is obliged to

enable their execution; otherwise he shall be liable for damage arising

from non-performance of the obligation (duty).

Rent and Payments for Services Relating to the Use of a Certain Flat
§ 696

1) The method of calculating the rent, payments for services relating

to the use of a certain flat, and the manner of their payment, as well

as the circumstances under which the lessor is entitled unilaterally to

increase rent and payments for services relating to the use of such

flat, and to alter other terms (conditions) of the lease contract, are

stipulated in other statutory provisions.
2) Payment for services

rendered in connection with the use of the flat, or advance payments for

them, shall be made together with payment of the rent, unless the

parties agree otherwise, or unless other statutory provisions stipulate

differently.
§ 697
If the lessee fails to pay the rent or to pay

for services relating to the use of the flat within five days of the

due date, he is obliged to pay the lessor a penalty for delay (late

charges).
 

§ 698
1) The

lessee (tenant) shall have the right to an appropriate reduction in the

rent if the lessor, despite the lessee’s notification of defects in the

flat or building fails to remedy such defects in the flat or building

which, substantially, or for a longer period of time, impair its use.

The lessee shall also have the right to an appropriate reduction in the

rent if services related to the use of such flat have not been rendered,

or have been defectively rendered, as a result of which the proper use

of such flat has been impaired.
2) The lessee shall have the same

right where construction works in the building substantially, or for a

longer period of time, impair the conditions for using the flat or

building.
3) The lessee shall have the right to an appropriate

reduction in the amounts paid for services relating to the use of the

flat, where such services are not properly and timely rendered.

§ 699

The right to a reduction in the rent, or in amounts paid for services

relating to the use of the flat, must be exercised with the lessor

without undue delay. The right shall extinguish if it is not exercised

within six months after the defects having been remedied.

Joint Lease of a Flat
§ 700
1) A flat may be jointly leased by two or more persons. Joint lessees shall have the same rights and obligations.
2) A joint lease can also be based on an agreement between the existing lessee, another person and the lessor.
3) In a co-operative flat, a joint lease may only be established between spouses (husband and wife).

§ 701

1) Any of the joint lessees (joint tenants) may arrange routine matters

relating to the joint lease of a flat. In other matters, the consent of

all of them shall be required, otherwise the act in law shall be null

and void.
2) All joint lessees shall be entitled and bound by acts in law relating to the joint lease jointly and severally.

§ 702

1) Where joint lessees fail to reach an agreement as regards the rights

and obligations arising from their joint lease of the flat, the court

shall rule on the matter, acting thereby on a petition filed by any of

them.
2) Acting on a petition filed by a joint lessee, the court may

cancel the right to joint lease of a flat in a case which merits

special consideration if, through no fault of the lessee, a situation

arose which inhibited joint use of the flat by the joint lessees. At the

same time, the court shall determine which one or more of the joint

lessees will continue to use the flat.
 

Joint Lease of a Flat by Spouses
§ 703

1) If during their marriage spouses, or one of them (become(s) the

lessee(s) of a flat, a joint lease of the flat by the spouses is

established.
2) If during their marriage only one of two spouses

acquires the right to conclude a contract for lease of a co-operative

flat, the joint lease of the flat by the spouses shall also establish

their joint membership in the co-operative; both spouses shall be

entitled and bound jointly and severally from this membership.
3) The provisions of subsections 1 and 2 shall not apply if the spouses do not live together permanently.
 

§ 704

1) If one of the spouses becomes the lessee of a flat prior to their

marriage, once they get married, a joint lease of the flat arises to

both spouses.
2) The same shall apply if, prior to their marriage,

one of the spouses acquired the right to conclude a contract for the

lease of a co-operative flat.

§ 705

1) If divorced spouses fail to reach an agreement about the lease of

their flat and one of them files a petition with the court regarding

this matter, the court shall terminate the right to joint lease of the

flat. At the same time, the court shall determine which of the spouses

shall continue to use the flat as a lessee.
2) If, prior to their

marriage, one of the divorced spouses acquired the right to conclude a

contract for lease of a co-operative flat, the right to joint lease of

the flat shall extinguish upon the divorce; the right to use the flat

shall pertain to the spouse who acquired the right to lease the flat

prior to their marriage. In other cases where divorced spouses fail to

reach an agreement about their joint lease of a co-operative flat and

one of them files a petition with the court regarding this matter, the

court shall rule on the extinguishment of this right, and determine

which of them shall, as a member of the co-operative, continue to be the

lessee of the flat; the court’s ruling (judgment) shall also extinguish

the divorced spouses’ joint membership in the co-operative.
3) When

ruling on the continued lease of a certain flat, the court shall

especially take into consideration the interests of minor children and

the opinion of the lessor.

Passage of the Lease of a Certain Flat
§ 706

1) If the lessee dies, and unless it concerns a flat in joint lease by

spouses, the lessee’s children, grandchildren, parents, brothers and

sisters, son-in-law, or daughter-in-law, who prove that on the day of

the lessee’s death they lived together with him in a common household,

and that they do not have a flat of their own, shall become (joint)

lessees of the flat. Persons who took care of the deceased lessee’s

common household, or who had been dependent on the deceased for their

subsistence (maintenance), shall also become (joint) lessees of the

flat, provided that they prove that they lived together with the

deceased in a common household for no less than three years prior to his

death and do not have a flat of their own.
2) If the lessee of a

co-operative flat dies and if it is not a flat in joint lease of the

spouses, both his membership in the co-operative and his lease of the

flat passes to the heir upon whom his membership share in the

co-operative devolves.

§ 707

1) If one of two spouses who were joint lessees (tenants) of a flat

dies, the surviving spouse shall become the sole lessee (tenant) of the

flat.
2) In the case of a co-operative flat, joint lease of the

flat by spouses shall extinguish upon the death of one of the spouses.

If the right to the co-operative flat was acquired during the marriage,

the surviving spouse continues to be a member of the co-operative and

acquires the membership share; the court shall take this fact into

consideration during probate (inheritance) proceedings. If the spouse

who died acquired the right to the co-operative flat prior to the

marriage, on his death both membership in the co-operative and lease of

the flat shall pass to the heir upon whom the membership share in the

co-operative devolves. If the lease concerns several objects, the

membership share may be inherited by two or more heirs.
3) If one of the joint lessees dies, his rights shall devolve upon the other joint lessees.
 

§ 708
The provisions of § 706 par. 1 and § 707 par. 1 shall even apply when the lessee has permanently left a common household.

§ 709

The provisions of § 703 to § 708 shall not apply to service flats,

special purpose flats and flats in special purpose buildings.
Termination of the Lease of a Flat

§ 710

1) The lease of a flat shall be terminated by a written agreement

concluded between the lessor and the lessee, or by a written notice of

termination.
2) If the lease of a flat was concluded for a definite period of time, it shall terminate upon expiry of that period of time.

3) A written notice of termination must specify the period when the

lease is to terminate; the period may not be less than three months and

must finish at the end of a calendar month.
 

§ 711

1) The lessor may give a notice terminating the lease of a flat only

with the consent of the competent court in the following circumstances:

a) if he needs the flat used by the lessee (tenant) for himself, his

spouse, his children, grandchildren, son-in-law or daughter-in-law, his

parents, or siblings;
b) if the lessee has ceased to perform the

work to which the lease of a service flat is connected and the lessor

needs the flat for another lessee who will perform this work;
c) if the lessee or those who live with him, despite a written warning, grossly breach morality (good morals) in the house;

d) if the lessee grossly breaches his obligations arising from lease of

the flat, especially by not paying the rent or charges for services

related to the use of such flat, for a period longer than three months;

e) if it is necessary for reasons of public interest to dispose of the

flat or the building (house) so that it cannot be used, or if the flat

or the building requires such repairs that the flat or the building

cannot be used for a prolonged period of time;
f) if the flat is a

flat which is structurally connected to premises designated for

operation of a shop, or some other entrepreneurial (business) activity,

and the lessee or the owner of such non-residential premises wants to

use the flat;
g) if the lessee has two or more flats, unless he cannot justly be required to use only one flat;

h) if the lessee does not use the flat without serious reasons or if he

uses the flat without serious reasons only occasionally;
i) if it

concerns a special purpose flat or a flat in a special purpose building,

unless the lessee is a handicapped (disabled) person.
2) If the

court approves a certain notice terminating the lease of a flat, it

shall also determine the date on which the lease relationship is to be

terminated, taking into consideration the notice period (§ 710). This

notice period shall start to run only on the first day of the calendar

month following the month when the court ruling (judgment) becomes

legally effective. At the same time the court shall also rule that the

lessee is obliged to vacate the flat no later than 15 days following

expiry of the notice period. If the lessee is entitled to be provided

with a substitute flat (or substitute accommodation), the court shall

rule that the lessee is obliged to vacate the flat within 15 days of the

day when a substitute flat is provided to him and, where substitute

accommodation is sufficient, within 15 days of such substitute

accommodation being provided.
3) Where the court approves the

termination notice for reasons stated under letters a), b), e) and f),

the court may, in warranted cases, impose on the lessor an obligation to

compensate the lessee for his moving expenses which it shall determine.

4) In the case of a special purpose flat or a flat in a special purpose

building, the lease contract may be terminated under paragraph 1 only

when this is first approved by the party at whose expense such flat was

established or by the legal successor of such party, or when this is

first approved by the relevant authority which, in accordance with the

laws of the National Council (Parliament), recommended the conclusion of

such lease contract.
5) if the lessor did not make use of the

vacated flat, without serious reasons, for the purpose for which the

court approved notice of termination concerning the flat from which the

lessee moved out his things, on a petition filed by the lessee the court

may rule that the lessor shall pay the lessee his moving expenses and

other expenses relating to modification of the lessee’s substitute flat.

The court may further require the lessor to pay for the lessee the

difference between the rent for the hitherto leased flat and the rent

for the substitute flat for a period of up to five years, starting from

the month when the lessee moved into the substitute flat, but latest

until the day when the lease of the substitute flat is terminated by the

lessee. The lessee’s right to reimbursement of the difference in rents

shall not become statute-barred for five years. Other rights of the

lessee are not thereby affected.

§ 712
1) Housing substitutes shall be substitute flats and substitute accommodation.

2) A substitute flat shall be a flat which, according to its size and

conveniences, provides for the lessee and members of his household

accommodation for dignified human habitation. If the lease relationship

was terminated by the lessor giving notice for reasons stated under §

711 par. 1 let. a), b), e), f) or i), the lessee shall have the right to

a substitute flat which, in the local conditions, is essentially

equivalent to the flat which he must vacate (an adequate substitute

flat). The court may rule with regard to reasons which merit special

consideration that the lessee is entitled to a substitute flat which has

a smaller floor space than the one which he is vacating. If the lease

relationship was terminated by the lessor giving notice for reasons

stated under § 711 part. 1 let. b) and the lessee stopped performing

work for the lessor without a serious reason, it is sufficient to

provide the lessee on his vacating the flat with shelter; the court may

rule that for reasons which merit special consideration the lessee has

the right to a substitute flat of a smaller floor area, lower quality

and with fewer conveniences, possibly located outside the municipality

in which the flat which he is vacating is situated, or to substitute

accommodation.
3) In cases under § 705 par. 2 first sentence, it is

sufficient to provide substitute accommodation for a divorced spouse who

must vacate the flat; however, the court may decide that, for reasons

which merit special consideration, the divorced spouse shall be entitled

to a substitute flat. In cases under § 705 par. 1 and par. 2, second

sentence, a divorced spouse is entitled to a substitute flat; for reason

which merit special consideration, the court may rule that the divorced

spouse is entitled to substitute accommodation only.
4) Substitute

accommodation means a one-room flat, or a room in a house for single

persons, or the sub-lease of a furnished or unfurnished part of another

lessee’s flat.
5) If the lease relationship is terminated by the

lessor giving notice under § 711 par. 1 let. c), d), g) or h), it shall

be sufficient to provide shelter. However, if a family with minor

children is involved and if the lease relationship is terminated by the

lessor’s notice under § 711 par. 1 let. c) or d), the court may rule for

reasons which merit special consideration, that the lessee shall be

entitled to substitute accommodation, or to a substitute flat. Shelter

means temporary accommodation, until the lessee obtains proper

accommodation, and premises for storing his furniture, other household

equipment and personal belongings.
6) If the lessee is entitled to

substitute housing, he is not obliged to move out of the flat until an

adequate housing substitute is provided for him; joint lessees are

entitled to only one housing substitute.
 

§ 712a

In the period between the end of the lease relationship and the last

day of the time-limit for removing things from the flat, the lessor and

the person whose lease relationship has terminated have rights and

obligations to an extent corresponding to those stipulated in § 687 to §

699 and, as appropriate, in § 700 to § 702 par. 1.  
 

§ 713

1) If, after the death of the lessee or the dissolution of his

marriage, his spouse or persons stipulated in § 706 par. 1 continue to

use the service flat, such persons shall not be obliged to move out of

the flat until they are provided with an adequate substitute flat. This

shall also apply if the lessee of the service flat has permanently left

the common household. In warranted cases, the court may decide (rule)

that it shall be sufficient to provide a flat of a smaller floor area,

lower quality or with fewer conveniences, possibly (if need be) a flat

located in a town (or village) other than the one where the flat from

which it is necessary to vacate is situated, or that it shall be

sufficient to provide substitute accommodation.
2) The provisions of paragraph 1 shall apply as appropriate to special purpose flats and flats in special purpose buildings.

§ 714

Upon termination of a person’s membership in a housing co-operative,

his leaves of a (co-operative) flat shall also terminate. The lessee of a

cooperative flat is not obliged to move out of the flat until a housing

substitute is provided under the conditions stipulated in § 712. The

member may demand return of his membership share in the co-operative

only after he vacated the flat, namely within the time-limit stipulated

in the articles of association.
Regulation of Rights upon the Mutual Exchange of Flats
 

§ 715

Lessees may make an agreement for exchange of their flats only with the

consent of the lessors. The consent and the agreement must be in

writing. If the lessor withholds to give consent to an exchange of a

flat without serious reasons and the lessee files a petition with the

court, its ruling on the matter may replace the manifestation of the

lessor’s will.

§ 716
1)

The right concerning performance of an agreement on the exchange of

flats must be asserted before the court within three months of the day

when consent to such agreement was given; otherwise the right shall

terminate.2) Where such serious circumstances subsequently affect one of

the parties that performance of the agreement cannot fairly be demanded

of this party, such party may withdraw from the agreement, but this

must be done without undue delay. The obligation to render compensation

for damage incurred shall not hereby be affected.
 


F.
 

The

Constitutional Court considered the question whether the petitioner –

the Municipal Court in Prague – is authorized to file a petition to

annul the contested Civil Code provisions. The active standing of a

court to file a petition to annul a legal regulation or provisions

thereof is defined by . 95 par. 2 of the Constitution so that, if a

court concludes that a statute which is to be applied in resolving a

matter is inconsistent with the constitutional order, it shall submit

the matter to the Constitutional Court. The Act on the Constitutional

Court provides in § 64 par. 3 that a court is also authorized to file a

petition to annul a statute or individual provisions thereof in

connection with its decision making activity under . 95 par. 2 of the

Constitution.
 

In the

adjudicated matter (see findings made by the Constitutional Court from

the file of the District Court for Prague 5 file no. 6 C 392/2003), in

view of the subject matter of the dispute, in which the landlord seeks

to have an obligation imposed on the tenant to pay him the amount of the

difference between the usual rent and the rent paid thus far, of the

provisions proposed to be annulled only § 696 par. 1 comes into

consideration; the other Civil Code provisions on lease of an apartment

are not provisions which are to be used in resolving the matter. Thus,

the Constitutional Court states that only the petition to annul § 696

par. 1 of the Civil Code is related to the decision making activity of

the Municipal Court in Prague, and therefore it denied the petition to

annul the other provisions on the lease of an apartment (verdict III.).
 


G.
 

The

petitioners constitutional law objections to the contested provisions

are based on the belief that the present condition of the legal

regulation of apartment leases is unbalanced, because the provisions

which protect the landlord’s rights (i.e. § 696 par. 1 of the CC,

envisaging the passage of a legal regulation on the calculation and

unilateral increase of rent) is absent, whereas the provisions

protecting the tenant are in effect, which – in the petitioner’s opinion

– unilaterally gives an advantage to the tenant’s position. The second

level of constitutional law objections consists of the claim that the

very gap in legislation, consisting of the fact that the legal framework

envisaged by § 696 par. 1 of the CC has not yet been passed, is

unconstitutional. The petitioner states that it realizes that annulling

all the special legal regulations on apartment leases would then make it

impossible for the landlord to seek payment from the tenant of higher

rent than had been previously specified. However, the inequality of

rights and obligations arising from the apartment lease relationship in

question would allegedly be removed, because all rights and obligations

arising from the lease agreement to the apartment would have to be

subject to the general legal regulation of a lease agreement, as well as

the general regulations of obligation relationships and the general

provisions of the Civil Code. Any excesses in the exercise of rights and

obligations arising form a lease agreement would have to be resolved at

court, as is the case with other lease agreements.
 

The

Constitutional Court finds the petitioner’s objections, thus

formulated, only partly justified, but in the part where it agrees with

them, it finds a solution different from the one which the petitioner

requests. The Constitutional Court concluded that no grounds exist to

annul § 696 par. 1 of the Civil Code. The text itself of § 696 par. 1 of

the Civil Code, which merely expects the passage of new regulations, is

not unconstitutional; what is unconstitutional is the long-term

inactivity of the legislature, which has led to the constitutionally

unacceptable inequality, and whose final result is the violation of

constitutional principles (verdict I.).
 

The

Constitutional Court considers it essential to evaluate the

petitioner’s true motivations leading to formulation of the petition to

annul the special provisions on apartment leases. It is evident that the

true motive behind the petition is the lack of constitutional

regulation, or de-regulation of rent, based on the ability to

unilaterally increase it. In addressing this undoubtedly sensitive

social issue, whose roots lie in the era of the totalitarian system, it

is necessary to respect the fact that the nature of a lease

relationship, including the lease of an apartment, as an obligation

relationship, conceptually assumes that the greatest possible space will

be created to apply the parties’ free will and freedom of contract. In a

number of its decisions the Constitutional Court has recognized the

constitutional dimension of the principle of free will and freedom of

contract. In the Constitutional Court’s opinion (see the judgment in the

matter file no. Pl. US 24/99, Collection of Decisions – volume 18, 1st

edition, Prague: C. H. Beck 2001, p. 135, file no. Pl. US 5/01,

Collection of Decisions – volume 24, 1st edition, Prague: C. H. Beck

2002, p. 79, file no. Pl. US 39/01, Collection of Decisions – volume 28,

1st edition, Prague: C. H. Beck 2003, p. 153) an essential component of

a democratic, law-based stated is protection of the freedom of

contract, which is derived from the constitutional protection of

property rights under . 11 of the Charter. However, it did not limit

freedom of contract only to property rights, although it is precisely in

that context that it is most firmly enshrined in constitutional law. In

its judgment in the matter file no. I. US 113/04 (Collection of

Decisions - volume 33, 1st edition, Prague: C. H. Beck 2005, p. 129) it

stated that respect for an individual’s sphere of autonomy is a general

condition for the functioning of a law-based state under . 1 par. 1 of

the Constitution, or . 2 par. 3 of the Charter. An individual’s right to

free will, i.e. ultimately individual freedom itself, corresponds to

the requirement laid on the state power to recognize individuals’

autonomous expressions of will and corresponding conduct. As long as

that conduct does not interfere in the rights of third persons, the

state must only respect, or approve these individual expressions. The

state may resort to interference in an individual’s freedom only in

cases that are justified by a particular public interest, if such

interference is proportional in view of the aim which is to be achieved.

The principle of protecting the free will of subjects of law is widely

reflected in private law, which is characterized by the principle of

equality of the parties (this concept of equality is reflected in the

reciprocity of the internal structure of private law relationships in

comparison with public law, which is characterized by the predominance

of the holder of sovereign power, not a concept of equality before the

law in the sense of no-accessory equality, i.e. general equality before

the law). However, even in the area of private law objective law imposes

certain limits on free will or freedom of contract (cf. § 2 par. 2 and 3

of the CC). It can not be overlooked that, precisely as regards the

legal regulation of apartment leases, the Civil Code contains a number

of norms of a compulsory (mandatory) nature, whose common denominator is

the concept of the so-called “protected” apartment lease. However,

these norms restrict free will primarily on the other side of the lease

relationship, i.e. on the side of the landlord. If we realize that the

landlord is typically the owner of an apartment, it is evident that the

increased level of tenant protection is reflected in a limitation of the

property rights of the landlord, specifically in limitation of his

right to dispose of the object of ownership and to draw benefits from

it.
 

The cited protection of

free will affects another typical principle of the law of obligations:

pacta sunt servanda. This is also an expression of the equality of

parties to an obligation relationship, which is also manifested by the

fact that neither party has the ability (the right) to change the

content of the obligation relationship by its own expression of will

(see § 493 of the Civil Code, which was not proposed to be annulled).

Unilateral interventions are legally relevant only if the law so

provides expressly. De lege lata they include the ability to

unilaterally increase rent, by defining conditions (limits) under which a

landlord can change the previously negotiated or specified rent. These

rules have come to be known as “rent control.” The absence of the

envisaged regulation leads to a situation where a change in the content

of a lease (including the amount of rent) is, during the existence of

the lease, a matter for agreement by the parties. If such agreement is

not reached, there is no legal procedure available (as a result of the

legislature’s inactivity), through which it would be possible to

implement changes by a unilateral expression of will by the landlord.
 

The

Constitutional Court has repeatedly considered the issue of rent

control; see, in particular, Constitutional Court judgment in the matter

file no. Pl. US 3/2000 (Collection of Decisions – volume 18, 1st

edition, Prague: C. H. Beck, 2001, p. 287 et seq., promulgated as no.

231/2000 Coll., as amended by the notice published as no. 130/2001

Coll.), the judgment in the matter file no. Pl. US 8/02 (Collection of

Decisions – volume 28, 1st edition, Prague: C. H. Beck, 2003, p. 237,

promulgated as no. 528/2002 Coll.) and the judgment in the matter Pl. US

2/03 (Collection of Decisions – volume 29, 1st edition, Prague: C. H.

Beck, 2003, p. 371, promulgated as no. 84/2003 Coll.). In judgment file

no. Pl. US 3/2000 the Constitutional Court expressed the opinion that

the principle of proportional (just) balance requires that, in

respecting the requirements contained in . 11 of the International

Covenant on Economic, Social and Cultural Rights, the process of

destruction of property rights be taken into account, particular as

regards the owners of rental buildings, discriminated against compared

to other owners. Price control, if it is not to exceed the bounds of

constitutionally, clearly may not lower a price so much that, in view of

all proved and necessarily incurred expenses, it would eliminate the

possibility of at least recovering them, because in that case it would

imply denial of the purpose and all functions of ownership. In judgment

file no. Pl.US 8/02 the Constitutional Court stated that protection of

property rights does not rule out rent control as a constitutional form

of implementing state policy if it is within the bounds defined by the

Czech Republic’s constitutional order and international obligations.

State intervention must respect a proportionate (just) balance between

the requirement of the general interest of society and the requirement

to protect an individual’s fundamental rights. That means that there

must be a reasonable (justified) proportionality relationship between

the means used and the aims pursued. Rent control is not expropriation,

but it can affect the content of property rights. In the Charter (. 11

par. 3), property is not understood as an unlimitable right, but under

the Charter (. 11 par. 4) it can be limited only on the basis of law and

under conditions specified by the Charter (. 4 par. 2), and only in a

scope which does not affect the essence of ownership (which may not

become a mere shell devoid of content), and even such limitation is

subject to the ban on discrimination (art. 4 par. 3 of the Charter).

Therefore, the rule in this area is to set rent by agreement (. 2 par. 3

of the Charter), as unregulated (not arbitrary) rent, and regulation of

it is an exception which should be limited in a time to the necessary

period.
 

It is necessary to

point to the fact that the mutual interconnectedness of rent control and

the lagging transformation of civil law relationships regulating

housing manifests itself when addressing the fundamental conflict of

every modern housing policy, that is, seeking a balance between the

principle of protecting tenants and the principle of protecting

property, and that the greatest violation of this balance is the fact

that in the dual state of transformation in the Czech Republic a

situation arose where subsidies provided to tenants from society-wide

funds through low rents were transferred to certain private owner

landlords, who received nationalized buildings in restitution. These

landlords must pay for operation, maintenance and administration out of

their own funds. The unsustainability of such a situation was pointed

out by the European Court of Human Rights, which decided in the matter

Hutten-Czapska v. Poland that limiting the property rights of owners of

rent-controlled apartments is inconsistent with the right to peaceful

enjoyment of property guaranteed in . 1 of Protocol no. 1 to the

Convention for the Protection of Human Rights and Fundamental Freedoms.
 

The

Constitutional Court points out that the decision in the matter file

no. Pl. US 8/02 was made over three years ago (20 November 2002), and it

is evident that not much could have changed in the situation with the

housing market. Instead of the legislature, in cooperation with the

government, to respond flexibly to the judgments in which the

Constitutional Court emphatically criticized the then-existing legal

framework of strict rent control, denying the property rights of

apartment owners and the incomplete transformation of lease

relationships, up to the present it has not succeeded in fulfilling the

aim envisaged by the construction of § 696 par. 1 of the Civil Code. The

consequence of this activity, or rather, inactivity, is the de facto

freezing of controlled rent, which further deepens the violation of

property rights of the owners of those apartments to which rent control

applied. The intended balance can not be secured in the legal framework

otherwise than by passing the envisaged legal regulations. By not

passing them, the legislative assembly evoked an unconstitutional

situation with is in sharp conflict with the Charter (see verdict I.),

by “blessing” the inequality (i.e. impermissible discrimination) between

landlords who are able to let apartments for the usual rent, and

landlords who are forced to let apartments for rent in an amount

existing before annulment of the rent control regulations. However, this

situation does, after all, also create an inequality between groups of

tenants, which is also manifest in their property sphere, and lacks

reasonable justification. The Constitutional Court is aware of the

proposal from the Government of the CR to pass a statute on unilateral

increasing of apartment rent, but it also points to the rumors that – if

the draft is passed – it will contain rules which are applicable pro

futuro.
 

The Constitutional

Court here again points out that it is not permissible to shift the

social burden of one group of people (tenants) to another group

(landlords), and adds that it is also not permissible to create various

categories of landlords, depending on whether the rent in apartments

owned by a group is subject to rent control or not. The flagrant

consequences of the legislature’s inactivity lead the Constitutional

Court, being aware of its position as the body for protecting

constitutionality, to the necessity of replacing the instruments for

legal protection of landlord which are lacking at the level of

“ordinary” law by applying the principles of constitutional law

regulation. That is why the Constitutional Court insists on fulfillment

of the fundamental function of the general courts, i.e. ensuring

proportional protection of subjective rights and interests protected by

law, and requires that the general courts provide them to landlords by

not denying their complaints demanding determination of increased rent

by referring to the inadequacy of the legal framework. The

Constitutional Court considers denial of these complaints on grounds

summarized in the Supreme Court decision of 31 August 2005, file no. 26

Cdo 867/2004 (subsequently applied in decisions denying an appeal on a

point of law (“dovolání”) due to impermissibility – see decision file

no. 26 Cdo 80/2005, file no. 26 Cdo 819/2005, file no. 26 Cdo 1647/2005,

file no. 26 Cdo 1912/2005), to be a violation of . 36 of the Charter.

The Supreme Court based the justification of its legal opinion on the

following arguments:
 

In view

of § 871 par. 1 of the Civil Code, which, as of 1 January 1992 changed

the right to personal use into the right to lease, an apartment lease

established by this statutory transformation must be considered equal to

a lease created by contract after the given date: thus, one can not

conclude that it lacks one of the essential (conceptual) elements –

determination of the amount of rent. It follows from the nature of the

matter that this element of a lease relationship was preserved from the

previous relationship of personal use (where compensation for use of an

apartment was set by legal regulation, and thus logically did not have

to be negotiated by the parties). A lease relationship thus constituted

is also an obligation relationship, which, under § 493 of the Civil Code

can not be changed without the consent of the parties, unless the Civil

Code provides otherwise. A unilateral change in the amount of apartment

rent – as envisaged by § 696 par. 1 of the Civil Code – may be provided

by a special legal regulation, which, however, does not exist at

present. The Civil Code (or any other law) does not permit a court to

interfere in a lease obligation relationship by changing one of its

components, including the amount of rent. This power belongs to the

legislative and executive branches, and the general courts are not

authorized to interfere in it, or to supplement it (cf. . 2 par. 1, 3 of

the Constitution).
Insofar as the price of rent and services related

to use of an apartment was controlled by legal regulations after the

creation of the right of personal use, or after its transformation into a

lease, this situation must be taken as a starting point until the

appropriate special regulation, envisaged by § 696 par. 1 of the Civil

Code, is passed. This conclusion can not e changed by the fact that

these legal regulations were later annulled as unconstitutional (see §

71 par. 3 of Act no. 182/1993 Coll., on the Constitutional Court, under

which the rights and obligations from legal relationships arising before

a legal regulation is annulled remain unaffected).
 

At another point in the cited decision the Supreme Court states:

Nor

does the appeals court in this matter consider fundamentally legally

significant the evaluation of the issue of the binding nature of

Constitutional Court judgment no. 84/2003 Coll., which expressly

acknowledges the landlord’s ability to seek the usual rent, because in

view of the fact that, even according to the opinion set forth in the

reasoning of that judgment (not undisputed in legal theory or in the

decision making practice of the Constitutional Court itself), that what

is binding is the verdict of the judgment and those parts of the

reasoning which contain “material” grounds, and in view of the fact that

the verdict of the cited judgment annulled government decree no.

567/2002 Coll., which provides a price moratorium on apartment rents,

and denied the petition to forbid the government of the Czech Republic

from continuing to interfere in the area of apartment rents by issuing

its own legal regulations, it can not be presumed that the contested

decision is inconsistent with the verdict of the cited judgment or with

the material grounds for the decision which led to issuing it.
 

The

Constitutional Court considers the Supreme Courts arguments to be

purely positivistic, even rationalizing and completely removed from an

effort to resolve the problems which have been creating long-term

tension in our society. The Supreme Court’s solution not only did not

help the practice of the general courts, but also completely abandoned

the court’s position as the supreme body of the general court system, as

it evidently overlooked how long the unconstitutional interference in

the positions of landlords had continued (the verdict was issued 31

August 2005). The Constitutional Court also expresses its fundamental

disagreement with the assessment that the Supreme Court formulated on

the binding nature of the reasoning of judgments, because that

assessment is concentrated solely on the judgment in the matter file no.

Pl. US 2/03, and does not take into account ideas from previous

judgments. These ideas create “material” grounds, which led the

Constitutional Court to make its decision.
 

As

regards the arguments of the general courts that it is made impossible

for them, under . 90 and . 95 of the Constitution, to fulfill the

fundamental duties that they are called upon to perform, i.e. to provide

“protection of rights in the legally prescribed manner,” the

Constitutional Court emphasizes that in a situation where, with the

consent of the government and Parliament, two groups of owners of rental

apartments have existed side by side on a long term basis, one with

market income from leases and one with rent administrative determined in

the past, which is, at an estimate, several times lower, and where the

legal relationships in both these groups are based on the legal

regulation contained in the valid Civil Code, then, with the

contribution of the principles contained in the ideas forming the

material decision-making grounds in the cited judgments, the

Constitutional Court believes that the general courts have a sufficient

legal framework to make decisions and provide protection for the

fundamental rights of parties who have brought their dispute before

them.
 

Based on these facts,

the Constitutional Court, in its role of protector of constitutionality,

can not limit its function to the mere position of a “negative”

legislature, and must, in the framework of a balance of the individual

branches of power characteristic of a law-based state founded on respect

for the rights and freedoms of man and of citizens (. 1 par. 1 of the

Constitution ČR), create space for the preservation of the fundamental

rights and freedoms. Therefore, the general courts, even despite the

absence of the envisaged specific regulations, must decide to increase

rent, depending on local conditions, so as to prevent the abovementioned

discrimination. In view of the fact that such cases will involve the

finding and application of simple law, which is not a matter for the

Constitutional Court, as it has repeatedly emphasized in its case law,

the Constitutional Court refrains from offering a specific

decision-making procedure and thereby replacing the mission of the

general courts. It merely states that it is necessary to refrain from

arbitrariness; a decision must be based on rational arguments and

thorough weighing of all the circumstances of a case, the application of

natural principles and the customs of civic life, the conclusions of

legal learning and settled, constitutionally consistent court practice.
 

The

second level of the petitioner’s objections, based on the claimed

unconstitutional gap in legislation consisting of the fact that the

envisaged legal regulations have not yet been passed, also deserves

attention. As a consequence of the inactivity of the legislative

assembly it can evoke an unconstitutional situation, if the legislature

is required to pass certain regulations, does not do so, and thereby

interferes in a right protected by the law and by the constitution. The

legislature’s obligation can arise both directly from the constitutional

law level (e.g. in ensuring the exercise of fundamental rights and

freedoms or in protecting them) and from the level of “ordinary” laws,

in which it assigns this obligation to itself expressis verbis. It is

known that the work of constitutional courts developed protection

against inactivity, especially with the German Federal Constitutional

Court. Likewise, in the Czech Republic, the Constitutional Court’s

activity has touched on the issues of gaps (cf. the judgment in the

matter file no. Pl. US 48/95, the judgment in the matter file no. Pl. US

36/01; in the reasoning of the latter judgment the Constitutional Court

considers to be unconstitutional such omission by the legislature, as

has as its consequence a constitutionally unacceptable inequality).

Thus, we can conclude that under certain conditions the consequences of a

gap (a missing legal regulation) are unconstitutional, in particular

when the legislature decides that it will regulate a particular area,

states that intention in law, but does not pass the envisaged

regulations. The same conclusion applies to the case where Parliament

passed the declared regulations, but they were annulled because they did

not meet constitutional criteria, and the legislature did not pass a

constitutional replacement, although the Constitutional Court gave it a

sufficient period of time to do so (18 months). Moreover, it remained

inactive even after that time period expired, and to this day has not

passed the necessary legal framework (after more than 4 years).
 

The

relationship between the legislative and judicial branches arises from

the separation of powers in the state, as established in the

Constitution. A material analysis necessarily leads us to conclude that

this separation is not a purposes in and of itself, but pursues a higher

purpose. From its very beginnings it was subjected by the

constitutional framers to an idea based above all on service to the

citizen and to society. Every power has a tendency to concentration,

growth and corruption; absolute power to an uncontrollable corruption.

If one of the branches of power exceeds its constitutional framework,

its authority, or, on the contrary, does not fulfill its tasks and thus

prevents the proper functioning of another branch (in the adjudicated

case, of the judicial branch), the control mechanism of checks and

balances, which is built into the system of separation of powers, must

come into play. The Constitution defines the main task of the judicial

branch as follows: “Courts are called upon above all to provide

protection of rights in the legally prescribed manner” (. 90) and “The

fundamental rights and basic freedoms shall enjoy the protection of

judicial bodies” (. 4). The Constitutional Court’s position arises from

the same framework of a democratic law-based state: “The Constitutional

Court is the judicial body responsible for the protection of

constitutionality” (. 83). If we analyze the Supreme Court’s arguments

in light of these rules, we conclude that the Supreme Court and other

general courts err if they refuse to provide protection to the rights of

natural persons and legal entities who have turned to them with a

demand for justice, if they deny their complaints merely with a

formalistic reasoning and reference to the inactivity of the legislature

(the non-existence of the relevant legal regulations), after the

Constitutional Court, as protector of constitutionality and review

thereof, opened the way for them through its decisions. The

Constitutional Court has repeatedly declared the unequal position of one

group of owners of rental apartments and buildings to be discriminatory

and unconstitutional, and the long-term inactivity of the Parliament of

the CR to be incompatible with the requirements of a law-based state.

The Constitutional Court, by the will of the constitutional framers, is

responsible for the maintenance of the constitutional order in the Czech

Republic, and therefore it does not intend to abandon this obligation,

it calls on the general courts to fulfill their obligations, and refuses

to rely merely on pressure from the European Court of Human Rights, and

therefore it decided as stated in verdict no. I.
 

In

relation to the petition itself, after conducting proceedings, the

Constitutional Court states that grounds do not exist to annul § 696

par. 1 of the Civil Code, because that provision is not, in and of

itself, inconsistent with . 11 par. 1 second sentence of the Charter or

with . 11 par. 4 of the Charter, and therefore it denied the petition

from the Municipal Court in Prague under § 70 par. 2 of Act no. 182/1993

Coll., on the Constitutional Court, as amended by later regulations

(verdict II.).
 

Notice: Decisions of the Constitutional Court can not be appealed.

Brno, 28 February 2006
 

 

 



Dissenting Opinion
of judges Vlasta Formánková and Stanislav Balík

We

voted in steps, first against verdict III., which denied the petition

to annul § 685 to § 695, § 696 par. 2, and § 697 to § 716 of the Civil

Code.
 

Having been outvoted,

we can only wait to see whether the tale from antiquity repeats itself

and we will be told: “Hic Rhodus, hic saltate.” We do not agree with the

formalistic approach which led to the majority opinion that the

Municipal Court in Prague is not an authorized petitioner as regards the

Civil Code provisions cited above. With that concept the court not

even, for example, resolve the preliminary question whether it is to

rule in the matter of a landlord’s complaint against a tenant. A dispute

in which a court could be an authorized petitioner as regards § 685 to §

716 of the Civil Code – the unconstitutionality of which can only be

evaluated in the mutual interconnections forming a whole which is

difficult to separate – can hardly be construed, even hypothetically, in

an overly formalistic concept. Thus, is the petitioner, which is not

the relevant panel of the Municipal Court in Prague, but the Municipal

Court in Prague, next time first to combine for joint proceedings all

disputes from complaints under § 685 to § 716, or should it be taken

into account that in the adjudicated matter, precisely concerning

application of § 696 par. 1 of the Civil Code the petitioner – having in

mind the experience of its extensive decision making practice as an

appeals court – found the inseparable set of special regulations in

Civil Code provisions on apartment leases as a whole to be

unconstitutional?
 

We do not

consider the second alternative to be activist. Placed before the

narrowed subject matter of the proceedings, we voted to deny the

petition to annul § 696 par. 1 of the Civil Code, reserving the right to

a dissenting opinion to the reasoning in relation to verdict II. of the

judgment. In and of itself, § 696 par. 1 of the Civil Code certainly is

not unconstitutional; the question is whether that would be so, e.g. in

relation to § 706 par. 1 of the Civil Code …
 

In

the present situation, the long-term inactivity of the Parliament of

the Czech Republic, consisting of failure to pass a special regulation

to define cases in which a landlord is entitled to unilaterally increase

rent and payment for services related to use of an apartment, and

change other conditions in a lease agreement, is unconstitutional; we

voted to have this declared in the academic verdict I., reserving the

right to a dissenting opinion to the reasoning, justifiable above all by

the fact that it is a mere drop in the ocean of unconstitutionality of

the inactivity of the Parliament of the Czech Republic in the field of

rental housing law.
 

We can

only add that in the event of “saltandi” it is necessary to give weight

to a number of arguments fished out of the dissenting opinions of other

dissenting judges. That, however, would require wider discussion …

 

 


Dissenting Opinion
of judge Jiří Nykodým

I

disagree with the judgments’ verdict which denied the petition to annul

the special framework of Civil Code provisions on apartment leases. The

Constitutional Court thus avoided resolving a fundamental question

which has been unresolved long-term and creates constant tension in

society. The petitioner correctly concluded that the entire framework

for apartment leases is unconstitutional, and I do not agree that it

exceeded the scope of what it could contest, because in its case, in the

majority opinion of the Constitutional Court, only application of § 696

par.1 of the Civil Code came under consideration, and not all other

provisions of the special framework for apartment leases. this provision

can not be taken out of the context of the whole framework. Annulling

it in isolation could not correct the problem which the petitioner

posed, but, on the contrary, would make it quite impossible to resolve

it, which, in any case, the Constitutional Court recognized by not

annulling the provision, and, on the contrary, concluding that it is

precisely under this provision that the courts should, by a judicial

route, correct the unconstitutional situation consisting of the

legislature’s inactivity. Therefore, they correctly proposed annulling

the entire special framework for apartment leases, which would lead to a

situation where only the general regulation of leases would apply,

which, in § 671 par. 1 of the Civil Code, permits amending the price of a

lease if it is not provided by agreement so as to correspond to the

usual price at the time the agreement is concluded. Where the price of a

lease was governed by a regulation which left no room for negotiation,

one can not conclude that the rent was agreed upon. Therefore the

petitioners’ deliberations were correct.
 

I

have no doubt that the entire special framework for apartment lease, as

a whole, is inconsistent with our constitutional order. This framework

led to conserving the situation which was created in the period before

1989. The valid framework is nothing more than a modification of the

Civil Code provisions on personal use of apartments, which left no room

for the free will of the parties in concluding this type of agreement.

The fact that the 1991 amendment of the Civil Code (Act no. 509/1991

Coll.) labeled the previous personal use as a lease, could change

nothing about the fact that the legal relationships created in that area

until that time had not been created on the basis of freedom of

contract, but on the basis of a public law decision. If the legislature

did not create space for the parties of the legal relationship thus

created to have the ability to conclude a true lease agreement between

themselves by a certain, statutorily provided deadline, the legislature

itself came into conflict with the fundamental constitutional

principles, enshrined in the Constitution and in the Charter. Under . 1

par. 1 of the Constitution the Czech Republic is a sovereign, unitary,

and democratic state governed by the rule of law, founded on respect for

the rights and freedoms of man and of citizens. Under . 1 of the

Charter people are free, have equal dignity, and enjoy equality of

rights.
 

It is a violation

of the principle of equality if a legal relationship was created only on

the basis of free choice of only one of the parties and the will of the

other party was replaced by a public law decision which, if it was not

respected by the owner, was replaced by the decision of a court which,

after determining that a valid public law decision was in effect and

that the owner did not sign an agreement on delivery and acceptance of

an apartment, was required to issue such a decision. This applies to

virtually all so-called lease relationships which arose before 1989 and

which became leases only on the basis of a statutory provision,

specifically § 871 par. 1 of the Civil Code, that is, not on the basis

of the free will of the parties to the relationship. Even respecting the

principle of indirect retroactive effect, which is a generally

recognized principle, one can not accept a situation where, under the

conditions of the valid constitutional order, conditions survive which

are established on principles completely contrary to those on which it

stands. The continuity of rights and obligations arising under the

previous legal framework does not mean that a situation must be

preserved that is evidently unjust, and violates one of the fundamental

pillars of the constitutional order, which the principle of equality

undoubtedly is. It was, and still is, up to the legislature to correct

this unfortunate situation and create a transitional period,

sufficiently long, in which there will be room for the parties of such

lease relationships to reach a true agreement, and to also address the

situation fro cases where no agreement is reached, even in the period

thus provided.
 

It is a

violation of the principle of equality if one group of subjects of law

is required to finance the social program of the state solely out of its

own revenues. That is the situation in the case of landlords who

received tenants whose right to use an apartment arose under the legal

framework described above. Of course, the state has the right to

regulate certain prices, in areas where the speculative formation of

prices could have serious economic or social consequences. However, a

regulated price can not lead to a situation where expenses and profit

are not part of the calculation. If a regulated price is in conflict

with these principles, such a measure becomes inconsistent with . 11

par. 1 of the Charter, because a certain group of owners finds itself in

a situation where their property rights do not have the same legal

content and the same protection as other owners, who do not face this

disadvantage.
 

 

 


Dissenting Opinion

of judge Vladimír Kůrka

This dissenting opinion relates to the judgment’s verdicts I. and II. and to the reasoning of verdict III.
 

The petition in this matter was filed by a clearly unauthorized subject.
 

A

general court has standing to file a petition under § 64 par. 3 of the

Act on the Constitutional Court if there is a connection to its

decision-making, or – under . 95 par. 2 of the Constitution – if it

concludes that the statute which is to be applied in resolving a matter

is inconsistent with the constitutional order.
 

The

aim and significance of this review of the constitutional of legal

norms indicates that a “statue which is to be applied in resolving the

matter” is one (or the provision thereof) which is a barrier to

achieving a desirable (constitutionally consistent) result; if it were

not removed, the result of the dispute would be different. To document

its standing the petitioner must at least claim such a result.
 

The

only provision which, from the point of view of the considerations

presented in the petition, even “concerns” the proceedings on rent (for

July 2003) in question is § 696 par. 1 of the Civil Code.
 

Even that, however, does not meet the described condition of an “applied” provision.
 

The

petitioner acknowledges that annulling this provision does not cause

the complaining landlord to receive a position in the dispute that is in

any way more favorable, and even the non-existence of the special

regulation envisaged by § 696 par. 1 of the Civil Code does not mean

that a complaint seeking rent higher than that negotiated must always be

denied. On the contrary, it makes it clear that even with the existing

legal framework (though not annulled) there is another solution

available to the dispute than the solution which it opposes (ane which

was accepted by the court of the first level). Of course, then nothing

prevented the petitioner from accepting it – without anything further –

in the appeal proceedings.
 

In

terms of the aim, which is to be achieved, according to the petitioner,

the proposed annulment of § 696 par. 1 of the Civil Code is anyway

illogical, insofar as it is precisely that provision (as evidently the

only one) which opens that possibility; it envisages the possibility of

external interference into the contractually established amount of rent.
 

Therefore, the entire petition should have been denied under § 43 par. 1 let. c) of the Act on the Constitutional Court.
 

The

proclamatory verdict stated under point I. thus loses the appropriate

basis in the result of proceedings on a constitutional complaint.
 

 


Dissenting Opinion ¨
of judge Jan Musil

I

disagree with part of the reasoning in judgment file no. Pl. US 20/05,

and I have a dissenting opinion to it under § 14 of Act no. 182/1993

Coll., on the Constitutional Court, as amended by later regulations.
 

I

agree with the opinion stated in the judgment’s reasoning that the

present state of the legislative framework for price control of

apartment rents is extremely unsatisfactory and is unsustainable. I also

agree with the criticism expressed therein of the long-term inactivity

of the legislative branch, which does not respect the previous decisions

of the Constitutional Court.
 

However,

I have serious doubts whether the manner of correcting the matter

identified in part G of the judgment is realistic, and whether it is

capable of improving the situation. In this situation, where the

legislature has not filled a legal gap and has not yet issued a special

regulation governing the regulation of rent, the existence of which is

presumed in § 696 par. 1 the Civil Code, the Constitutional Court calls

upon the general courts, despite the lack of the envisaged specific

framework, to decide on rent increases.
 

I

believe that this transfers the responsibility for addressing a serious

general problem, with serious social consequences, to the general

courts. The problem of rent control affects an unusually large social

group of residents (the judgment’s reasoning states that this affects

approximately 740,000 apartments). I am of the opinion that such a

serious, and essentially, mass social problem can be satisfactorily

resolved only by finding social consensus expressed in legislation. The

method indicated in the second part of the background report, i.e.

deciding individual disputes before the general courts when no objective

criteria exist for setting the amount of rent, could lead to

arbitrariness or accidentalness in the general courts’ decision-making.

The possible mass filing of complaints with the courts can cause social

uncertainty, will lead to increased expenses of court proceedings, and

from a purely practical viewpoint can lead to further overburdening of

the court system.
 

I also

point to certain time-tested foreign approaches to the legal framework

for increasing rent, where it is assumed that the courts are competent

to resolve disputes over increasing rent, but for which the legislature

created, in advance, suitable legislative instruments to guarantee the

just resolution of court disputes, which permit weighing both the market

and social aspects of the problem.
 

For

an example of a possible legislative solution one can cite the 2001

reform of lease laws in Germany(§§ 535-580a of the Civil Code - BGB),

which creates a new model for increasing rent through a court complaint

(§ 558b BGB). The German legislature created suitable instruments for

fair judicial decision-making. In making decisions, the courts can rely

on the price indices maintained by the federal statistics office (§ 557b

BGB) or surveys of the local usual rent (§ 558c BGB – Mietspiegel),

available in a public database (§ 558e BGB - Mietdatenbank); certain

percent limits are placed on rent increases (§ 558/3 – Kappungsgrenze).

The Czech courts have nothing like that available to them, and I find it

difficult to imagine how they could at the present time fairly and

predictable decide individual disputes, especially in the event of mass

filings of complaints. Some of the evidentiary methods which are

available in such disputes (e.g. expert valuations), are lengthy,

procedurally complicated, and expensive for the parties to the dispute.
 


 


Dissenting Opinion
of judge Eliška Wagnerová

I

have reserved a dissenting opinion to the majority decision concerning

verdict III., as well as concerning the reasoning related to verdict II.
 

In

the reasoning of my dissenting position on verdict III. I join the

formal objections to the arguments of my colleagues, judges Stanislav

Balík and Vlasta Formánková. In addition, I state that I considered it

necessary to acknowledge the petitioner’s active standing in relation to

all the contested Civil Code provisions regulating apartment leases

because the constitutionality of § 696 par. 1 of the Civil Code, which

the petitioner is supposed to apply can not be evaluated in isolation.

Meaningful evaluation of that provision is possible only in the context

of the entire legal framework regulation apartment leases. It is only in

that context that one can test and evaluate the proportionality of

interference in landlords’ property rights (. 11 par. 1 of the Charter),

or the proportionality of interference in the peaceful enjoyment of

property (. 1 of the Protocol to the Convention for the Protection of

Human Rights and Fundamental Freedoms). The ability to propose also

evaluating the constitutionality of those statutory provisions which,

although the petitioner (the court) does not apply all of them in

resolving the present matter, must be recognized precisely when it is

not possible to evaluate the constitutionality of the actually applied

statutory provision in isolation, which is exactly this case. The

Constitutional Court’s case law (Pl. US 16/99), to which one can refer,

also testifies for the possibility of that procedure. Only because this

contextual evaluation was not made, I had no choice but to vote with the

majority verdict II.
 

Nevertheless,

I consider it necessary to state that if § 696 par. 1 of the Civil Code

remains in effect, then in my opinion, and also in accordance with the

Constitutional Court’s previous judgments (Pl. US 8/02, Pl. US 2/03), it

is necessary to insist that the so-called regulation envisaged by that

provision must be understood not as an administrative regulation, but as

regulation which “is based on market prices depending on the location

of buildings (...) As from a comparative law viewpoint, from an economic

viewpoint also it is not possible to compare the key term of rent

control. In European standards rent control is based on market housing

prices. These include, apart from the market prices of land and

buildings, also the market expenses for repairs, management and

maintenance, as well as appropriate profit. our construction of rent

prices is generally based on mandatory prices, which were based on a

fundamentally different concept of housing as a social service, paid

predominantly out of society-wide funds. This system ruled out adjusting

housing prices according to territorially differing levels of land

rent. The present attempts at a compromise between these two concepts

does not use the allocational and informational effect of market prices,

but leads to not making full use of available housing stock, unfairness

when allocating it, and corruption” (see judgment file no. Pl. US

8/02). And, as the Constitutional Court also stated in both of the cited

judgments, in the future legal framework it is necessary to re-evalute

the entire content of the regulation of apartment leases so that the new

framework will above all respect the free will of the parties to lease

relationships. This requirement arises from . 1 par. 1 of the

Constitution, because free will overlaps with the very essence of a

material law-based state.
 

Because

the reasoning in the majority opinion, on the contrary, approves a

number of mandatory norms, which guarantee the concept of a so-called

protected apartment lease, without differentiating between so-called

social apartments, whose existence is desirable, although their

undoubtedly loss-making operation must be at the expense of public

budgets, and apartments whose lease, on the contrary, may not be subject

to excessive regulation but must generate appropriate profit, I can not

agree with the reasoning. I also criticize the reasoning because it

clearly builds on the first Constitutional Court judgment concerning the

issue of rent control (Pl. US 3/2000), although it is quite obvious

from the two subsequent Constitutional Court judgments (Pl. US 8/02 and

Pl. US 2/03) that the Constitutional Court’s original position was

superseded in the sense of increased emphasis on freeing up the content

of a lease agreement, including de-regulation of rent, in view of the

passage of time. Judgment Pl. US 2/03 states: “at a general level, the

Constitutional Court is of the opinion that it is possible – assuming,

of course, protection of an important public interest – to apply

different standards for very short-term interference in an individual’s

rights and freedoms, precisely because of its lesser effects, than in

the case of interference unlimited in time; however, that can not apply

if the interference is preceded by a number of instances of interference

concerning substantially the same subject matter and already declared

to be unconstitutional – that is, concerning the question of the amount

of rent – because that basically denies the cited element of

“short-term”; in other words, extending an existing unconstitutional

situation is not only undesirable, but also impermissible, and thus a

regulation which causes such extension is also unconstitutional.”
 

For

these reasons I find the majority opinion’s reasoning relating to

verdict II. to be incompatible with the opinions expressed in the

Constitutional Court’s last two judgments on the issue of de-regulation

of rent. The understandability of the reasoning would certainly also

benefit if the passages referring to previous judgments separated

quotations from them by quotation marks so that the actual text of the

previous judgments would be distinguishable from the interpretation of

it, with which I disagree, as is evident above. I consider it necessary

to state that I agree with the arguments presented in the dissenting

opinions of my colleagues, judges Dagmar Lastovecká and Jiří Nykodým,

and for that reasons I do not further discuss the aspects contained in

them.

 

 


Dissenting Opinion
of judge Dagmar Lastovecká

Verdict

III. of the judgment denied the petition to annul § 685-695, § 696 par.

2 and § 697 to § 716 of the Civil Code, with the provision that the

petitioner, the Municipal Court in Prague, in proceedings on imposing an

obligation on the tenant to pay the landlord an amount corresponding to

the difference between the usual rent and the rent paid thus far, will

apply only § 696 par. 1 of the Civil Code. The petitioner justified its

petition to annul the entire special framework for apartment leases on

the basis of the interconnectedness of the individual provisions, which

it can not overlook when addressing the question which is the subject

matter of the proceedings before it.
 

The

Constitutional Court stated (without more detailed justification), that

only the proposal to annul § 696 par. 1 relates to the decision making

activity of the Municipal Court in Prague, and therefore it is the only

one of the provisions proposed to be annulled which comes into

consideration.
 

This

dissenting opinion does not agree with the overly restrictive

interpretation of § 64 par. 3 of the Act on the Constitutional Court,

under which “a petition to annul a statute or individual provisions

thereof may also be submitted by a court in connection with its

decision-making activity under . 95 par. 2 of the Constitution of the

CR.” the legal criteria for the Constitutional Court to be able to begin

reviewing the merits of a petition to annul a statute or individual

provisions thereof is whether the statute or the individual provisions

thereof are connected to a court’s decision-making activity. The

provision of § 696 par. 1 of the Civil Code is a component of a wider

complex of norms concerning apartment leases, both from a systematic

point of view, as it is contained in division four of the Civil Code,

and from the point of view of content. The Constitutional Court

interpreted the concept of connection with a court’s decision-making

activity to restrictively in the adjudicated matter, because it was

appropriate to also subsume in it the other provisions proposed to be

annulled, and the claimed unconstitutionality should have been evaluated

in relation to them as well.
 

The

significance and purpose of the special legal framework for apartment

leases is, above all, tenant protection, the consequences of which are

naturally to limit landlords’ property rights, and the provisions of

division four are thus interference in a constitutionally guaranteed

right, property rights (. 11 par. 4 of the Charter). As the

Constitutional Court has consistently ruled, it is possible to submit to

a limitation of constitutionally guaranteed rights (even in the case of

the category of owners), but only if the conditions arising from . 3

par. 3 and 4 of the Charter are met, i.e. if their essence and

significance are preserved. However, in the present matter it is not

possible to evaluate whether these principles have been respected when

reviewing in isolation only § 696 par. 1, which limits the free will of

the parties and replaces it with a special legal regulation. Although an

individual provision from the special framework for apartment leases

need not be found unconstitutional, it may still be “disproportionate”

interference in property rights, precisely in the context of other

constitutional complaints against the contested Civil Code provisions.