The Constitutional Court found No 231 / 2000 Coll.
The Constitutional Court found of 21 June 2000 on the application for annulment of the Order of the Ministry of Finance No. 176 / 1993 Coll., on the rental of the apartment and payment for the supply provided with the use of the apartment, as amended
Valid
Text versions:
01.08.2000
231
FIND
The Constitutional Court
On behalf of the Czech Republic
On 21 June 2000, the Constitutional Court decided in plenary on the proposal of a group of Senators to repeal the Order of the Ministry of Finance No. 176 / 1993 Coll., on the rent of the apartment and the payment for the transactions provided with the use of the apartment, as amended,
as follows:
Decree of the Ministry of Finance No. 176 / 1993 Coll., on rental from the apartment and payment for the supply provided with the use of the apartment, as amended, is repealed on 31 December 2001.
Reasons
A group of 14 senators of the Senate of the Parliament of the Czech Republic submitted with reference to Article 87 (1) (b) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution '), in conjunction with Paragraph 64 (2) (b) of Act No. 182 / 1993 Coll., on the Constitutional Court, an application for annulment of the Order of the Ministry of Finance No. 176 / 1993 Coll., on the rental of the apartment and the payment of the payment of the service provided with the use of the apartment, as amended, stating that the Ministry of Finance issued on 17 June 1993 an order on the rental of the apartment and the payment of the supply provided with the use of the apartment (hereinafter referred to as" the rental of the apartment'). On 29 June 1993 this decree became valid for publications in the Collection of Laws under No. 176 / 1993 Coll. Paragraph 2 (1) (c), (2) and (3), (6) and (16) (1) (b), as well as Sections 8 and 10 for the rental arrangements provided for in Articles 6 and 16 (1) (b), became effective on 1 July 1993. The other provisions of this decree came into force on 1 January 1994. To date, Decree No. 176 / 1993 Coll. was directly amended by four amendments by Decree No. 30 / 1995 Coll., No. 274 / 1995 Coll., No. 86 / 1997 Coll. and No. 41 / 1999 Coll.
Decree of the Ministry of Finance No. 176 / 1993 Coll. was issued on the basis of the legal authorisation contained in the provision of § 20 paragraph 1 (a) of Act No. 526 / 1990 Coll., on Prices.
Paragraph 20 of Act No. 526 / 1990 Coll., authorising the Ministry of Finance to issue implementing regulations, was deleted from the Act by amendment - Act No. 135 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 265 / 1991 Coll., on the jurisdiction of the authorities of the Czech Republic in the field of prices, and amending Act No. 526 / 1990 Coll., on prices.
Act No. 135 / 1994 Coll., with effect from 29 June 1994, repealed § 20 of Act No. 526 / 1990 Coll., without explicit designation of another provision in the legal order of the Czech Republic, on the basis of which new or already valid and effective implementing rules were issued, i.e. Decree No. 176 / 1993 Coll. issued on the basis of the deleted provisions of § 20 of Act No. 526 / 1990 Coll. Act No. 135 / 1994 Coll. does not explicitly address the issue of the deregulation of sublegal laws in its transitional provisions. This legislation may result in a logical interpretation that the abolition of the rule of law of a higher legal force results in the abolition of the standard of lower legal force.
The transition of the authorising provision to issue generally binding pricing legislation could only be derived from the provisions of Decree No. 30 / 1995 Coll., amending and supplementing Decree No. 176 / 1993 Coll., which refer to the authorising provision of § 2 (2) of Act No. 265 / 1991 Coll. Article 2 (2) of Act No. 265 / 1991 Coll. was amended by Act No. 135 / 1994 Coll. In view of the fact that this is an authorisation which is inspecific and does not explicitly address the transition of Decree No. 176 / 1993 Coll. under the scheme of Act No. 265 / 1991 Coll., it is not possible to import from this authorisation the automatic subclassification of Decree No. 176 / 1993 Coll. under the legal regime of Act No. 265 / 1991 Coll. Last but not least, it must be noted that from the point of view of content it is an authorisation which is not identical in substance with the empowering provision of § 20 of Act No. 526 / 1990 Coll.
The empowering provision of Paragraph 2 (2) of Act No. 265 / 1991 Coll., as amended by Act No. 135 / 1994 Coll., does not satisfy the fundamental conditions of the rule of law and legal certainty, since that authorisation is general and flat-rate, thus directly contrary to Article 79 (3) of the Constitution. Article 79 (3) The Constitution must be interpreted in a restrictive manner, which means that the powers to legislate must be specific, unambiguous and clear. For this reason, Decree No. 176 / 1993 Coll. is also unconstitutional, as it does not support the explicit legal authority. It therefore contradicts the principle (which was repeatedly pointed out by the Constitutional Court) that obligations can only be laid down on the basis of law, within its limits and, in the case of statutory law, only on the basis of express legal authorisation.
Act No. 265 / 1991 Coll., as amended, regulates only the scope of the defined authorities of the Czech Republic in the field of prices and sets out in a taxa the circle of social relations in which these authorities must exercise their powers. Act No. 265 / 1991 Coll., as amended by Act No. 135 / 1994 Coll., only specifies the scope of the authorities in the field of prices, but does not provide for those authorities in the area of prices.
In view of the above, the current situation can be interpreted in the following ways:
1. Act No. 135 / 1994 Coll. silently derogated from Decree No. 176 / 1993 Coll., with every amendment to that decree in the future being ineffective. In that interpretation, it must be stated that, for the purposes of legal certainty, the rules on the deregulation must be clearly stated which legislation has been repealed; or
2. Act No. 135 / 1994 Coll. subranking Decree No. 176 / 1993 Coll. under Act No. 265 / 1991 Coll. In this case, however, it may be argued that such subordination took place in a legally defective and unconstitutional manner, or
3. Act No. 135 / 1994 Coll. subcategorized under Act No. 265 / 1991 Coll. only decrees which became valid after the Act No. 135 / 1994 Coll. (e.g. Decree No. 30 / 1995 Coll., Decree No. 274 / 1995 Coll., Decree No. 86 / 1997 Coll., Decree No. 41 / 1999 Coll.).
It is therefore not formally clear whether Decree No 176 / 1993 Coll. is legally effective and to what extent. The group of Senators is of the legal opinion that the unconstitutional nature of Decree No. 176 / 1993 Coll. results from its relationship with the law. For this reason, the Constitutional Court should repeal this decree (as provided for in Section 68 (2) of Act No. 182 / 1993 Coll.).
The Decree of the Ministry of Finance No. 176 / 1993 Coll. sets out the method of determining the maximum amount of rent from the apartment and the remuneration for transactions provided with the use of the apartment and the method of arranging and paying rent and the price of services between the lessor and the lessee, in § 2 defines the apartments to which it does not apply, thus extending the whole group of apartments to apartments with the rent regulation and without the rent regulation, and also sets out the method of determining the maximum amount of rent from the apartment and the payment for transactions provided with the use of apartments for rental. Within this group of flats it distinguishes apartments with maximum basic rent and apartments with factually rectified rent.
The Annex to Decree No. 176 / 1993 Coll. sets out maximum basic rent and factually adjusted basic rent and maximum rent for apartment equipment.
Decree of the Ministry of Finance No. 176 / 1993 Coll., as amended, is in fact (material) contrary to the provisions of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the Charter).
This contradiction is noted by the appellants for the following reasons:
A) Decree No. 176 / 1993 Coll. infringes
- the general principle of equality between entities (in connection with the violation of the general principle of equality of property law), since, pursuant to Article 3 (1) of the Charter, "fundamental rights and freedoms are guaranteed to all without distinction sex, race, colour, language, faith and religion, political or other thinking, national or social origin, membership of a national or ethnic minority, property, genus or other status."
- the general principle of equality of ownership, since under Article 11 (1) of the Charter "Everyone has the right to own property. The ownership of all owners has the same legal content and protection. The inheritance is guaranteed."
As a general rule, the content of ownership is, in particular, the possibility to hold, dispose, use and benefit from it. The provisions of Act No. 526 / 1990 Coll., as amended, cannot be interpreted as a violation of the principles of property law, although it limits owners in the absolute exercise of property law. The State, through Law No 526 / 1990 Coll., seeks, inter alia, to prevent abuse of the position of operators with a monopoly, dominant or exclusive position on the market, thereby practically fulfilling the provisions of Article 11 (3) of the Charter, which reads: "Owners are obliged. They must not be misused to harm the rights of others or in violation of legally protected general interests. Its performance must not damage human health, nature and the environment beyond the standards laid down by law. '
Goods subject to price regulation are registered in a list published in the Price Bulletin. On the basis of Article 10 of Act No 526 / 1990 Coll. by decision, they include price authorities in the list of goods with regulated prices. By including the rent price itself in the list of goods with regulated prices applicable to both natural and legal persons in the territory of the country engaged in the sale and purchase of the goods listed therein, other than goods intended for export, the State has declared its interest in protecting the tenants of apartments against abuse of their status by the owners - apartment owners.
However, Decree No. 176 / 1993 Coll. protects only a group of tenants in apartments with regulated rent. It thus sets up the difference and inequality between owners of houses with rental apartments in which there are rent-controlled apartments and owners of houses with apartments in which the lease is negotiated by agreement of the Contracting Parties (lessor - lessee). It also creates a distinction and inequality between tenants of apartments in rental houses where apartments are rent-controlled and tenants of apartments in apartments where rent is negotiated by agreement of the Contracting Parties. In both cases, this is done on the basis of the distinction between entities by property.
The Decree No 176 / 1993 Coll. does not apply to apartments of housing cooperatives established after 1958, apartments with which diplomatic service is operated, apartments, if the tenant is a person who does not have his registered office or permanent residence in the Czech Republic, and also the rent regulation does not apply to apartments and houses built without the participation of public funds, for which the approval decision was issued after 30 June 1993, apartments for which the lease agreement with the new tenant is negotiated; except in the case of statutory lease transfer.
The internal structure of Decree No. 176 / 1993 Coll. itself divides a group of apartments with rent regulation for apartments with a maximum basic rent, as well as apartments with a fixed tenancy (apartments whose construction or completion has been authorised after 30 June 1993 and whose financing involves public funds or which have been authorised before that date and whose financing has since 1995 been financed by public funds). Decree No. 176 / 1993 Coll. thus makes unjustified differences between individual apartments and its normative provisions the differences in both the group of owners and the group of tenants. It allows the landlord of an apartment not subject to rent regulation to conclude rental contracts on the basis of the free price formation of the landlord of the apartment covered by the lease regulation to comply with the maximum rental price laid down in this decree. Finally, it also favours tenants in unregulated rental apartments.
The Constitutional Court of the Czech Republic based its decision-making activities on the case-law of the Constitutional Court of the CSFR, which in its finding of 8 October 1992 sp. zn. Pl. ÚS 22 / 92 (No 11 Reports of resolutions and findings of the Constitutional Court of the CSFR) stated: "The equality of citizens before the law was not seen as an abstract category, but was always attributed to a certain legal standard, incorporated in a relationship between different bodies, etc. If a right has been granted out of equality, each individual is entitled to remove all de facto inequalities within the limits of his or her ability. However, this structure only applies if equality is considered absolute. The equality of relative, as all modern institutions have in mind, only requires the elimination of unjustified differences." According to the appellants, when determining the range of apartments covered by the rent regulation, it is the determination of unsubstantiated differences between the individual owners of the apartments and tenants. The principle of equality is unjustifiably violated here, and so Decree No. 176 / 1993 Coll. is found in direct conflict with the quoted finding of the Constitutional Court.
B) Decree No. 176 / 1993 Coll. also infringes the provisions of the Charter on Limitation of Property Rights:
Under Article 11 (4) of the Charter, "Expropriation or forced restriction of property rights is possible in the public interest, on the basis of the law and for compensation." If there is a group of goods and services for which, in the public interest, price regulation is necessary and the price regulated by law does not fall below the normal price (i.e. the sum of the costs of acquiring, processing and circulation of goods, reasonable profit and the relevant tax, or other benefits, paid to the State) and the difference between the price of the legally regulated and the normal price is not superseded, such a restriction of ownership (rent regulation) may be seen as a violation of Article 11 (4) of the Charter.
As is apparent from the official analyses of the Ministry of Local Development, regulated rent prices clearly do not reach the standard price, the State does not replace this difference. On the basis of the provisions of Decree No. 176 / 1993 Coll. there is a forced restriction on the exercise of ownership of a group of apartment owners with rental regulation, but the condition of public interest is not met. It is not possible to agree with the situation created by the current legislation where the regulation of rent prices is promoted to public interest. On the contrary, the regulation of rent prices is contrary to the public interest, since it does not allow the creation of a new and maintained housing fund (as a result of the reduction of the housing fund), it demotivates housing operators, makes labour mobility difficult, prevents the emergence of a functioning housing market. Last but not least, the regulation of rent unaddressed favours a randomly selected group of citizens, regardless of their social circumstances. The protection of ownership, as a constitutionally guaranteed and protected public interest, is stronger than the individual's entitlement to housing, or the State's interest in the unspecified social situation of citizens - tenants. For example, the 1995 decision of the Parliament of the Czech Republic, when the legislative body did not include the right of residence in the category of fundamental rights and freedoms, is also indicative of this. In the event of a solution to the tolerable social situation of citizens - tenants try to transfer their obligation and responsibility provided for by Article 30 (2) of the Charter to the owners of apartments with rental regulation. The State is in the middle of the rent regulation which gives the lessee an unjustified advantage and is superior to its individual interest over the lessor's interest. It does so by limiting ownership (in the sense of renting an apartment at a normal price) in the absence of public interest without compensation. Thus, the principle of proportionality and the prohibition of insolence, which, according to the established case law of the European Court of Human Rights and the European Convention for the Protection of Human Rights and Fundamental Freedoms, is one of the fundamental rights that the national order must guarantee. It is therefore clear that the principle of proportionality of the intervention provided for in Article 4 (4) of the Charter is also infringed by this legislation: "In the application of the provisions on the limits of fundamental rights and freedoms their substance and meaning must be investigated. Such restrictions shall not be misused for purposes other than those for which they have been established. ';
C) Decree No. 176 / 1993 Coll. also infringes the provisions on freedom of business. Pursuant to Article 26 (1) of the Charter, "Everyone has the right to free choice of profession and to prepare for it, as well as the right to undertake and pursue other economic activities." Decree No 176 / 1993 Coll. arbitrarily and inappropriately limits the right to operate freely in the field of rental housing and, moreover, obliges owners of rental apartments to violate generally binding housing regulations by making it impossible to ensure the maintenance of apartments in a legally established state due to a lack of funds. Some rights can only be invoked under the law and within its limits. Pursuant to Article 26 (2) "The law may lay down conditions and restrictions for the pursuit of certain professions or activities', but it also applies that Article 4 (3) of the Charter" Legal restrictions on fundamental rights and freedoms must apply equally to all cases which fulfil the conditions laid down. '
The appellants see the unconstitutionality of Decree No. 176 / 1993 Coll. in an unfounded violation of the principle of freedom of enterprise pursuant to Article 26 (1) of the Charter and of the equality of entities pursuant to Article 4 (3) of the Charter, limiting the possibility of free enterprise in the area of the rental of real estate of apartment owners with rental regulation. The Decree puts these owners at a disadvantage against a group of apartment owners not subject to rent regulation.
D) Decree No. 176 / 1993 Coll., issued on the basis of the provisions of § 20 of Act No. 526 / 1990 Coll., provides for the method of determining the maximum amount of rent from the apartment and the remuneration for transactions provided with the use of the apartment and the method of arranging and paying the rent and the price of services between the lessor and the lessee. However, it does not respect the provisions of Act No. 526 / 1990 Coll., which, in the first sentence of Paragraph 2 (3), states that "The Seller must not abuse his economic position in order to obtain a disproportionate economic advantage by selling at an agreed price involving unjustified costs or reasonable profits." At the same time, however, the provisions of the second sentence also apply, according to which "Buyers must not abuse their economic position in order to obtain disproportionate economic benefits by buying at an agreed price that is not significantly below the eligible costs'.
Even the mere contradiction of Decree No. 176 / 1993 Coll. with the Law is sufficient to justify the annulment of this statutory act by a decision of the Constitutional Court.
In view of all the above, a group of Senators proposes that the Constitutional Court issue a finding declaring that the Order of the Ministry of Finance No 176 / 1993 Coll., on the rental of the apartment and payment for the use of the apartment, as amended, infringes the provisions of Article 3 (1), Article 4 (1), (2), (3) and (4), Article 11 (1), Article 26 (1) and Article 30 (2) of the Charter and therefore repeals it from the date on which it designates it.
The Ministry of Finance states in its observations that it does not agree with the proposal of a group of Senators and therefore proposes to reject it, the grounds for refusal being seen in the following facts. To the objection that the contested decree infringes Article 3 (1) of the Charter, the Ministry of Finance notes that, pursuant to Article 5 (5) of Law No 526 / 1990 Coll. applies state-regulated prices to all sellers and buyers of the specified type of goods. If the intended type of goods is the rental of such an apartment, which is not excluded from the price regulation by Decree No. 176 / 1993 Coll., the price regulation applies to all tenants and tenants of such apartments. The State does not favour a certain group of apartment owners according to those criteria, nor does it favour any group of tenants.
The Ministry of Finance considers that the essence of price regulation is always a restriction on the State-designated group of sellers and buyers to freely negotiate the price of their goods. The right to free price negotiation is not a fundamental right or freedom within the meaning of the Charter. The State may, pursuant to Article 1 (6) of Law No 526 / 1990 Coll., limit this right in cases of market threat to the effects of restrictions on competition, or where an exceptional market situation so requires. The Ministry of Finance considers that, in view of the irreplaceable nature of rental housing and the related specific protection of apartment rental by civil law regulations, the rental housing market after 1989 met both conditions for price regulation. The exceptional market situation resulted from a legal situation in which the rent in the closed lease contracts did not represent the economic real price of the services provided, while there was no possibility of a unilateral increase in the lease by the lessor, since the contract could only be amended by an agreement which could not be expected to be reached on a voluntary basis from the lessee.
In order to enable the lessors to increase the rent to an economically viable level in the contracts in force, while at the same time protecting the lessee from - for most of them an unaffordable - a jump increase in the rent, § 696 (1) of the Civil Code under Amendment No 509 / 1991 Coll. unilateral increase in the rent, but on the basis of special legislation.
The Ministry of Finance considers that it was necessary for the maximum increase in the rent to be regulated by the State, as the special nature of the rental housing associated with the lack of affordable supply did not allow the lessee to take advantage of the competitive option to negotiate a price corresponding to the quality of the service provided and its purchasing capacity. On the other hand, the lessor could easily abuse its economic position to demand an unreasonable price for the lessee. The rent is a price within the meaning of Section 877 of the Civil Code. In general, price regulation does not specify the specific prices that are negotiated, but only the rules or restrictions on their negotiation. The same applies to the rent for which the decree determines in specified cases the maximum amount or, in the case of the tendered rent, the conditions for negotiating the price, including a binding pricing procedure or calculation thereof. The rent regulation in apartments subject to price regulation sets the price of goods of a particular kind regardless of who is its seller or buyer. It is therefore not possible to talk about discrimination against a certain population within the meaning of Article 4 (1) of the Charter. Law 526 / 1990 Coll. allows the State to regulate prices where the effects of restrictions on competition have been compromised or where an exceptional market situation so requires. It follows from the above analysis of the situation of the rental housing market after 1989 that the State found both conditions for applying price regulation in rental housing. On the other hand, it did not apply price regulation where the lessor and the lessee could freely agree in advance on mutually acceptable rental (new lease), or where there was no reason to protect the lessee from a jump increase in rent ("foreign" legal and natural person). In addition to determining the maximum rent in cases where the lessee is not able to influence the price of the services provided to him, a different method of price regulation was chosen - in fact - where the lessee either has some control over the cost of housing (§ 6a of the Decree) or for new rental contracts in public housing (§ 6 of the Decree), where the maintenance of price regulation takes account of the State's support for housing. Similar price regulation applies to flats owned by housing cooperatives built in former cooperative housing construction. Pursuant to Article 4 (2) of the Charter, "The limits of fundamental rights and freedoms may be governed by law only under the conditions laid down in the Charter." Although the right to freely negotiate the price of goods is not a fundamental right or freedom within the meaning of the Charter, its restriction is regulated by law and is regulated by decree within the limits of the law.
According to Article 5 (5) of Law No 526 / 1990 Coll., price regulation applies to all sellers and buyers of the specified type of goods. If the specified type of goods is the rental of the apartment defined by Decree No. 176 / 1993 Coll., its provisions apply to all tenants and tenants of such apartments. The adjustment is fully in accordance with Article 4 (3) of the Charter.
With regard to the application of Article 4 (4) of the Charter, the Ministry of Finance notes that there is no right to negotiate the price freely by fundamental law or freedom within the meaning of the Charter. Nevertheless, the State only regulates the price where necessary and respects the meaning and substance of such rights, which may be affected by price regulation. The State is not interested in low rent, but it allows tenants to gradually overcome the difference between the amount of rent existing at the time the lease contract was signed and the amount of rent for newly negotiated contracts. It prevents the transfer of the neglect of the housing fund only to the tenant. The State has an interest in fair rental, thus allowing the lessors to unilaterally change the contract in their favour. The State does not abuse its competence either for its own benefit or for the benefit of one of the parties concerned.
The objection that the Order infringes Article 11 (1), (3) and (4) of the Charter., the Ministry of Finance states that price regulation does not prevent ownership of property nor does it establish the difference between the rights arising from different forms of ownership. It also does not undermine the right to inherit property. The rent regulation does not in any way interfere with the right to hold, use and enjoy the fruits and benefits of the property. The rent regulation does not restrict the possibility of the owner having the object of his property to dispose of (he can sell it, rent it, etc.), but is limited by the rules laid down in the negotiated price. However, when regulating prices, the price authority is limited by the conditions laid down in Section 1 (6) of the Price Act. This means that, in accordance with the State procedure, compliance with the provisions of Article 11 (3) of the Charter is ensured, according to which ownership must not be misused to harm the rights of others or contrary to the interests legally protected.
According to the Ministry of Finance, only some groups of tenants are protected vouchers. Price regulation is used to regulate rent both in the way of setting the maximum price and in the way of factual guidance. It is not true that regulation testifies only to some tenants. With the exception of marginal cases of housing of the Service Administration to the diplomatic corps or apartments used by legal and natural persons having their registered office or permanent residence outside the Czech Republic, and rent, which are freely negotiated by both parties on an equal footing as a price (new rental contracts), price regulation also applies in the form of material price control for the apartments referred to in § 6a of the Order, for flats newly built with the use of public funds as well as for housing cooperatives, for which the regulation is governed by a separate legal regulation in a manner of actuarial rent. In both recent cases, the reason for price regulation is the participation of public funds in the acquisition of houses with apartments owned by persons other than the State and the possibility for tenants to influence the specific amount of rent. In the opinion of the Ministry of Finance, the assertion made by the appellants on the protection of only some groups of tenants is therefore not true.
On the objection that the Order infringes the equal rights of owners, the Ministry of Finance points to the finding of the Constitutional Court of the CSFR, which dealt with the concept of equality of citizens before the law, which he understood not as an abstract category, but as a relative equality, which only requires the removal of unjustified differences (Decision No 11 / 1992 Reports of resolutions and findings of the Constitutional Court of the CSFR). The Ministry of Finance also points to a number of decisions of the Constitutional Court of the Czech Republic (e.g. the finding of 17.2.1999 sp. zn. Pl. ÚS 16 / 98 published under No. 68 / 1999 Coll., the finding of 24.5.1994 sp. zn. Pl. ÚS 16 / 93, the finding of No. 131 / 1994 Coll., the finding of 17.5.1994 sp. zn. Pl. ÚS 36 / 93, the declared number of No. 132 / 1994 Coll., the finding of 28.2.1996 sp. The reference to the proposal is also related to the finding of the Constitutional Court of 22.3.1994 sp. zn. Price regulation is neither an expropriation nor a compulsory restriction on property rights under § 123 (1) of the Civil Code, for which the owner would be compensated. Otherwise, price regulation would lack any sense and the State would not be able to protect the public interest in a balanced market guaranteeing fair price negotiation.
As regards Article 26 (1) of the Charter, the Ministry of Finance is of the opinion that price regulation does not prevent anyone from doing or operating any other economic activity. Everyone has the freedom to decide whether to do business in a particular area under conditions laid down by the State. Thus, persons engaged in this field can decide on their further activities. The rental regulation does not apply to newly concluded lease contracts, thus preventing new housing construction.
In the opinion of the Ministry of Finance, it is not a matter of the State's obligation to assist in a material emergency within the meaning of Article 30 (2) of the Charter to prevent the possibility of requiring tenants in a non-market environment of any rent from an apartment which is its basic living requirement. It cannot reasonably be required of the State not to prevent the possibility of abuse of economic status and, moreover, to saturation the results of such conduct with State resources. The negligence of the housing fund and the unrealistic amount of rent in the past did not cause the tenant of the apartment. The State therefore allowed it to adjust its housing expenditure gradually so that it did not have a financial collapse. At the same time, it allowed the lessor to be entitled to rent higher than the rent originally agreed in the lease agreement. Decree of the Ministry of Finance No. 176 / 1993 Coll., as amended, allows for a gradual increase of rent in previously concluded lease contracts, i.e. where the conditions laid down in § 1 (6) of the Price Act are met. There is no regulation in newly concluded rental contracts for rent from the apartment. The argument set out in the various provisions of the Charter therefore shows, in the opinion of the Ministry of Finance, that the restriction of the right to negotiate the price is in accordance with the constitutional order, i.e. in accordance with the law, on the basis of its express authorisation and within its limits. The price regulation of rent from apartments is not infringed in the draft articles of the Charter.
Article 79 (3) The Constitution shall be entitled to issue legislation on the basis and within the limits of the law on the basis of ministries, other administrative bodies and local authorities, provided that they are empowered by law to do so.
On the basis of the authorisation provided for in Paragraph 20 (2) of Act No. 526 / 1990 Coll., on prices, Decree No. 176 / 1993 Coll., on rent from an apartment and payment for transactions provided with the use of an apartment, which allowed the lessor to unilaterally require the lessee maximum or factually adjusted rent within the meaning of Sections 5 and 6 of Act No. 526 / 1990 Coll. Decree No. 176 / 1993 Coll. is a law regulating the amount of the price. Law No 526 / 1990 Coll., on prices, in paragraphs 7 and 8 of Paragraph 1, states that the central authorities of the State competent to regulate prices under that Act (hereinafter referred to as the "price authorities') are designated by specific rules and that specific rules determine which other authorities (hereinafter referred to as the" local authorities') are entitled to regulate prices in the manner laid down by that Act. 'Such a special regulation is Act No. 265 / 1991 Coll., on the Jurisdiction of the Bodies of the Czech Republic in the Price Field, as amended by Acts No. 135 / 1994 Coll. and No. 151 / 1997 Coll. The Act empowers the Ministry of Finance to legislate and negotiate prices in Article 2 (2) (b).
The Decree No. 176 / 1993 Coll. does not go beyond the limits of Act No. 526 / 1990 Coll. and states only the permitted methods of price regulation, it was issued under the Act (No. 265 / 1991 Coll.) and within the limits of the Act (No. 526 / 1990 Coll., see Section 1, paragraph 5). According to the Ministry of Finance, it is clear that the Decree No. 176 / 1993 Coll. and its amendments were issued in accordance with the scope of the Ministry of Finance governed by Act No. 265 / 1991 Coll. Since the decree also allows municipalities to choose the maximum price, its amendments had to be issued with reference to Act No. 265 / 1991 Coll., rather than to Act No. 526 / 1990 Coll. The contested lack of provision § 20 (1) (a) of Act No. 526 / 1990 Coll., which was abolished for reasons of redundancy when the scope of the individual price authorities is in accordance with the provisions of § 1 (7) and (8) of Act No. 526 / 1990 Coll. contained in a separate Act, namely Act No. 265 / 1991 Coll., as amended, was replaced by the provisions of Act No. 265 / 1991 Coll. The Ministry of Finance considers that the particular nature of price regulation requiring operational State intervention in a market threatened by a restriction on competition is not compatible with the detailed definition of the conditions under which decisions of a State authority must be taken. Price regulation is such a differentiated area that detailed regulation of limits would undoubtedly be missed with the desired effect - a rapid and effective intervention by the State in an unbalanced market. The Ministry of Finance foresees the cancellation of the formal regulation of rent from the apartment and already last year it started with the intensive preparation of the new rental law from the apartment. It evaluated the results of the comment procedure on the substantive intention of the draft law, in which both the public authorities and the representatives of the tenants and tenants participated, and adjusted the factual intention accordingly. It can be expected that the formal regulation of rent from the apartment will be abolished during 2002.
The Ministry of Labour and Social Affairs submitted comments on the proposal of a group of Senators, in particular on the social aspect of rent regulation and on certain general legal issues.
Part II of the draft group of Senators states that the repeal of the Act, which contained the original authorisation for the issue of Decree No. 176 / 1993 Coll., automatically repealed the standard of lower legal force and that the new authorisation contained in Act No. 135 / 1994 Coll. is inconcrete and therefore contrary to Article 79 (3) of the Constitution.
In addition to these claims, the Ministry of Labour and Social Affairs states that if the statutory legislation was properly issued on the basis of the law, it became part of the legal order of the Czech Republic and this is part of it until its explicit abolition. If, at the time of its issue, a statutory statutory act was issued in accordance with the requirements of Article 79 (3) of the Constitution, the reason for its annulment (except for explicit cancellation for factual or other reasons by another law) could only be a non-compliance with the law (i.e. exceeding the "limits' of the law) as a result of a change in the law, not that the authorisation is contained in a law other than the original one (the scope of the mandate is important, not its" location '; in the formal conclusion on the importance of the "location' of the authorisation, for example, a new decree would have to be issued in the event of a change in the competence of the ministries, since, despite the explicit provision that a particular matter now falls within the competence of another ministerial, the authorisation would be to another ministerial). In the present case, it should be pointed out that the rule of higher legal force has not been repealed since Law No 526 / 1990 Coll. has not been repealed and is still valid, and it still contains those principles on which Decree No 176 / 1993 Coll. is based.
As regards the formulation of the authorisation, in the opinion of the Ministry of Labour and Social Affairs, it is the legislator's opinion whether the authorisation is entirely specific or more general; Article 2 (2) of Act No. 265 / 1991 Coll., as amended by Act No. 135 / 1994 Coll., states that the Ministry of Finance is to issue legislation, including for the regulation and negotiation of prices, with the basic regulation of regulation and price negotiation contained in the Act (Act No. 526 / 1990 Coll., on prices). It can be concluded from this that the mandate to issue the decree is given and that the "limits of the law" are given in particular by Act No. 526 / 1990 Coll., which contains the fundamental principles on which Decree No. 176 / 1993 Coll. is based. As regards the "Limits of the Law ', the Ministry of Labour and Social Affairs states that, in its view, these limits need not only be given by the law which contains the authorisation to issue the implementing legislation, but by the fact that those limits need to be extended to other laws; The decree must therefore not only comply with the law under which it is issued, but also with other laws - the concept of" the limits of the law "cannot be interpreted purely grammatically (i.e. within the limits of one law), but with the meaning of Article 79 (3) The Constitution is the compliance of a substatutory regulation with the laws (i.e. with all laws). In this context, it is also necessary to take into account the provisions of Section 696 (1) of the Civil Code, according to which the method of calculation of the rent, the remuneration for transactions provided with the use of the apartment, the method of payment and the cases in which the lessor is entitled to increase the rent unilaterally, the remuneration for transactions provided with the use of the apartment and the other conditions of the lease contract, provide for specific legislation. This special legislation is then Decree No. 176 / 1993 Coll., which regulates these issues. In the opinion of the Ministry of Labour and Social Affairs, it is also not possible to agree with the argument that the authorisation to issue a statutory law must be contained only in the law which contains the relevant substantive regulation - this conclusion cannot be made even from the verbatim wording of Article 79 (3) of the Constitution (there is no discussion of the implementation of a particular law, but of the issue of legislation on the basis of the law, if it is empowered to do so in the law); It is also a very common practice that one decree is issued on the basis of several authorisations contained in various laws, so one decree implements several laws. This is also the case with Decree No. 176 / 1993 Coll., which relates to two laws, i.e. Act No. 526 / 1990 Coll. and Act No. 265 / 1991 Coll.
Part III of the Senate Group's proposal states that the principle of rent regulation infringes the general principle of equality of entities (Article 3 of the Charter) and the principle of equality of ownership (Article 11 of the Charter), but it is recognised that Law No 526 / 1990 Coll. cannot be interpreted as a breach of the principle of equality. The inequality is seen in that in some cases the rent is negotiated by agreement and that the decree creates unjustified differences between individual apartments and between groups of apartment owners and tenants.
In the opinion of the Ministry of Labour and Social Affairs, it must first of all be noted that, if the decree does not apply to housing of housing cooperatives, it is not a lack of housing and the inequality created by it, since cooperative housing is different from rental housing (cf. Section 685 (2) of the Civil Code).
Differences in status between owners of house with rent-controlled apartments and owners of houses in which the rent is negotiated by agreement of the Contracting Parties, as well as between tenants of rent-regulated dwellings and tenants of apartments in houses where the rent is negotiated by agreement of the Contracting Parties, shall be assessed by the appellants as unjustifiable and contrary to the constitutional principle of equality in rights. The present interpretation of the principle of equality in the rights contained in Article 1 of the Constitution and Article 1 of the Charter of the Constitutional Court leads to conclusions on its relativity (the finding of the Constitutional Court of 7 June 1995 sp. zn. Pl. ÚS 4 / 95 published under No 168 / 1995 Coll., the finding of the Constitutional Court of 17 May 1994 sp. zn. Pl. ÚS 36 / 93 declared under No 132 / 1994 Coll.) and the need for the present application of the principle of justice and proportionality (the finding of the Constitutional Court of 21 December 1993 sp. The Ministry of Labour and Social Affairs takes the view that the regulation of rent is justified by the public interest in ensuring housing as the basic living needs of a large population and does not in this sense infringe the principle of equality in rights. A closer argument in favour of this view will focus on illuminating the nature of rental relationships in their social and legal context for the last ten years of transformation of our society. Similarly, it considers that the rent regulation does not infringe Article 11 of the Charter protecting property law.
The Ministry of Labour and Social Affairs considers the following elements to be relevant to the characteristics of the situation in the area of rental housing:
The structure of the housing fund in the Czech Republic accounts for approximately 47% of the ownership sector (with only about 5% of it being owned by individual apartments, the rest consists of family houses used for the owners' housing), cooperative sector 19% (mainly housing housing cooperatives formed between 1960 and 1990) and rental sector about 31%, which consists of three quarters of the housing fund of municipalities, i.e. the former state housing fund, one quarter of the rental houses owned by natural persons (mainly restituents) and other private persons. In absolute terms, it can be noted that there are 1,134 thousand flats in rental housing, with approximately 1,097 thousand households, representing almost 3 million people. Of this number, the rent regulation applies to 97,7% of flats.
The specificity of the rental sector lies in its territorial location; Around 55% of rental apartments are concentrated in municipalities of over 50,000 inhabitants, almost 45% are concentrated in municipalities of over 100,000 inhabitants (in Prague there are almost 260 000 apartments with regulated rent, in other municipalities of over 100 000 inhabitants of around 155 000 apartments). Hire housing is therefore concentrated in places with a high concentration of employment, historically established industrial and administrative centres, and it is important from a social point of view that pensioners and unemployed live in approximately 400,000 of these apartments.
In the past ten years, the share of rental apartments in the total housing fund has been reduced mainly due to the conversion into non-residential premises and the transformation into cooperative housing (to a lesser extent to those owned by natural persons), following the transfer of three-quarters of the former state housing fund into the ownership of municipalities (this process is referred to as privatisation of flats). The loss of rental apartments in recent years has not been compensated by the construction of new flats (analysis of this factor goes beyond the competence of the Ministry of Labour and Social Affairs).
Thus, the transformation of the rental housing market characterised by the transfer of the State's assets to new owners (as a result of restitution and transfer to the municipality) was carried out while reducing the share of rental flats in the total housing fund, the concentration indicated above in the large conurbations and the significant share of socially vulnerable groups in this type of housing in a way that did not allow the lessee to use the possibility of competing to negotiate a price corresponding to the quality of the service and its purchasing capacity.
In this context, the Ministry of Labour and Social Affairs points to the fundamental deregulation of energy, water and housing prices that have taken place in recent years. Housing spending in the Czech Republic is no longer disproportionately low compared to developed countries, and in 1996 their share of gross domestic product per capita was 16,3%, while the average of 15 Western European countries (i.e. EU countries without Greece and Luxembourg, including Switzerland and Norway) was only 12,7%. The share of expenditure on fuel and energy in total housing costs in the Czech Republic is the highest of the Western European countries, including four Central European transforming countries. In absolute terms, the spending on housing (rent and expenses related to the use of the apartment) in the Czech Republic has almost tripled since 1990.
The social burden on households living in rental homes is the highest in pensioners' households (their share of living expenses in net income is 29,4% according to the latest figures in 1999, with some groups of pensioners in some conurbations, especially in Prague, reaching almost 40%).
The legal order of the Czech Republic does not have legislation defining the proportion of household income expenditure which should not be exceeded. However, in his view, the limit of the social capacity of the transformation process in this area can be considered to be fulfilled for pensioners' households and, given the already achieved share of expenditure on rental housing (in particular due to the deregulation of energy prices and related services), there is no wide margin for easing rent prices for other groups of the population, unless such basic social security as housing is threatened. Housing costs represented around 18% of their net cash income in the household of employees with children in 1999. The State currently supports households whose income is below the level of 1.6 times the minimum of life, the housing allowance (Act No. 117 / 1995 Coll.) and two contributions responding temporarily - until June 30 and December 31, 2000 - to sudden increases in rental and heat prices (Act No. 75 / 1997 Coll. and No. 132 / 1997 Coll.). The level of the income increase dose decreases and is negligible at an income level of 1.6 times the minimum life.
European social policy practice is directed towards state intervention where the proportion of housing expenditure exceeds 25-30% of total household income. In the opinion of the Ministry of Labour and Social Affairs, State access to the transforming rental market must be the result of a series of measures; However, the income of large social groups of the population cannot be supported through large-scale interventions carried out in the form of income-tested benefits. In addition to the apparently unmanageable budget expenditure, the result would be a breach of the social cohesion of society. The increase in rent must therefore correspond to the increase in revenue of a substantial part of the company. Thus, if the State regulates the price of rental housing, it expresses a clear public interest in the status of a broad population that entered into legal relations related to the lease of the apartment in the vast majority before November 1989. The Constitutional Court, in its finding of 22.3.1994 sp. zn. Pl. ÚS 37 / 93 (No 86 / 1994 Coll.) in the case of an application for annulment of the provisions of § 871 (1) of the Civil Code, confirmed the constitutionality of the protection of all existing users of flats in the transformation of personal use of the apartment into protected rent on 1.1.1992. The creation of an acceptable state of legal certainty for all existing legal relations to housing has been described by the Constitutional Court as a public interest which would offset the potential disadvantages of owners of private houses (but which the Constitutional Court did not even impose).
Thus, the public interest in subjecting the rental housing price to the rules laid down by the legislation in the summary is determined by the above-mentioned characteristics of the rental housing, the lack of a price-proportional offer, the social situation of the tenants, as well as the need to protect the rights acquired in the relationships which, in most cases, arose in completely different legal and social circumstances.
The Ministry of Labour and Social Affairs takes the view that, if price regulation did not exist, the so-called locally common rent, as estimated by the Ministry of Regional Development for example in Prague, would amount to CZK 155 / m2 (the current price is CZK 32.70 / m2) and in other municipalities over 100 000 inhabitants, the price would be between CZK 36 and 110 / m2. With an increase in rent in Prague, for example 100 CZK / m2, the current cost of living a single household of a pensioner in an apartment of 40 m2 would increase by 98.6%, so the share of the cost of living in net income would be 77%. In households of workers with children, under the same circumstances, that proportion would exceed the average of all developed countries. The consequences of this rapid increase would be insoluble in the tools of batch social security systems and would result in the effects of poverty and social exclusion. On the side, the Ministry of Labour and Social Affairs has left serious consequences for the market economy in general.
Thus, the Ministry of Labour and Social Affairs argues that rent regulation does not violate the constitutional principle of equality, because it respects the public interest and public well-being expressed by the most generally desirable social cohesion of society. It also respects the principle of legal certainty as a central principle of the rule of law and does not infringe the principle of proportionality.
With regard to the appellant alleged to be in breach of Article 11 In the opinion of the Ministry of Labour and Social Affairs, it is necessary to examine whether the right of ownership does not conflict with another fundamental right, not only in the scope of the protection of human rights by the Charter, but also in the extent to which the Czech Republic is bound by international treaties on human rights and fundamental freedoms under Article 10 of the Constitution. Where, on the one hand, everyone has the right to own property (Article 11 (1) of the Charter), the abuse of property rights (Article 11 (2) of the Charter) shall be prohibited and the compulsory restriction of property rights (Article 11 (4) of the Charter) shall be granted in the public interest, on the other hand, there shall be protection granted to a right normally referred to as "the right to an adequate standard of living '. The protection afforded to this law in international treaties pursuant to Article 10 of the Constitution (by which the Czech Republic is bound) appears wider than the protection guaranteed by the Charter. The Constitutional Court has already applied several times the conventions on the protection of social rights, in particular as regards the International Covenant on Economic, Social and Cultural Rights No. 120 / 1976 Coll. (hereinafter referred to as" the Pact'), and when defining international documents containing fundamental rights in the social field (the Constitutional Court's finding of 23.11.1994 sp. zn. Pl. ÚS 13 / 94, published under No 3 / 1995 Coll.), stated that they are (inter alia) the Universal Declaration of Human Rights and the European Social Charter. The Universal Declaration of Human Rights in Article 25 declares the right of everyone "to a standard of living which ensures their health and well-being and the well-being of their family, including food, clothing, housing, medical care and necessary social services...." Even knowing that the Declaration is merely of a recommendation nature, it is of undeniably significant legal interest and importance for the formulation of universal human rights standards. Clearly inspired by the Declaration of the Pact in Article 11, the right "to an adequate standard of living for each individual and his family includes sufficient nutrition, clothing and apartment, and the constant improvement of living conditions." The Contracting State of the Pact undertakes to take appropriate steps to ensure that this right is implemented. The Czech Republic is bound by the Pakto and can be found in the case law of the Constitutional Court for its clear classification as an international human rights treaty under Article 10 of the Constitution, which is directly binding and takes precedence over the law.
The Czech Republic ratified the European Social Charter on 3 November 1999, the Additional Protocol to the European Social Charter was ratified on 17 November 1999, the Protocol amending the European Social Charter was ratified on 17 November 1999 - but it has not yet entered into force. The European Social Charter became valid for the Czech Republic on 3 December 1999, Additional Protocol to it on 17 December 1999. The European Social Charter is a document of the Council of Europe and the most important instrument for protecting social rights at European level. It is recognised as a counterpart of the European Convention for the Protection of Human Rights and Fundamental Freedoms in the social field.
Article 16 of the European Social Charter provides for family rights to social, legal and economic protection. The Contracting Parties undertake to promote economic, legal and social protection of family life by means such as family benefits, tax measures, housing for families, benefits for newlyweds and other appropriate means. The social protection provided for in this Article of the European Social Charter includes housing measures as an important part of measures aimed at supporting families; The fundamental purpose is the commitment of the State to operate in those areas where the needs of families as a result of the limited resources available to them become particularly urgent. For example, the Committee of Independent Experts, which assesses the Party's reports on the performance of the individual obligations of the Charter, requires detailed information on the share of family income in rent according to the various social and professional categories of tenants in order to be able to assess whether the Party complies with its obligation. The Additional Protocol to the Charter mentions in Article 4 concerning the social protection of elderly persons the need to provide housing adequate to their needs or sufficient support to adapt their housing. All these commitments were ratified by the Czech Republic in the European Social Charter and in the Additional Protocol.
In order to indicate the trends that the Council of Europe is aiming to protect social rights, it should be noted that the 1996 revised European Social Charter provides for an explicit right of residence in Article 31 and considers housing as part of the protection of the most vulnerable groups (disabled persons, families, elderly persons). The Council of Europe shall address the issues of the right to housing consistently in other instruments; for example, the recommendation of the Parliamentary Assembly 1074 (1988), on family policy, the recommendation of the Committee of Ministers RE R (94) 124, on family policy, Decision (68) 37 of 24.11.1968, on legislation to compensate for family obligations or Decision 70 (1998), on social cohesion in cities (adopted by the Congress of Regional and Local Authorities in Europe). A number of recommendations can be found in these acts directly related to measures addressing access to housing for families and other members of the company.
In its catalogue of fundamental rights, the Czech Republic did not explicitly state the right to protect an adequate standard of living, including housing, from European practice. We find such a right only in the constitutions of Belgium, Portugal, Spain and the Netherlands. Nevertheless, the Ministry of Labour and Social Affairs takes the view that the obligations arising from the international agreements on fundamental human rights under Article 10 of the Constitution allow the protection of housing at the level of fundamental human rights to be imported for the Czech Republic.
If two fundamental human rights are found in a collision, the situation is not unusual and the Constitutional Court has already sufficiently explained in its case-law how to measure such a conflict (the finding of the Constitutional Court of 12 October 1994 sp. zn.
In the light of the criteria which the Constitutional Court considers in the latter finding to be decisive for measuring such a collision, the measure consisting in regulating the price of the use of the apartment allows the objective pursued, i.e. the social protection of a group of tenants who cannot negotiate a price corresponding to their purchase capacity; the measure is therefore appropriate in his view. Since the same objective cannot be achieved by means which would not indirectly affect the proceeds resulting from the existence of the right of ownership to housing, it is also a measure necessary. In view of the gravity of the conflict of standing rights, it is necessary, in the opinion of the Ministry of Labour and Social Affairs, to take account of the fact that housing is one of the essential living conditions and guarantees necessary for survival.
The Ministry of Labour and Social Affairs therefore concludes that the measures taken in the public interest by regulating rent (in addition, in the context of legal relations arising in the period prior to 1994, in most cases before 1989) respect the constitutional limits on the restriction of property rights contained in Article 11 (3) of the Charter in relation to Article 4 (3) of the Charter.
For the sake of completeness, the Ministry of Labour and Social Affairs refers to the case law of the European Court of Human Rights, which assessed whether the procedure of certain Contracting Parties to the European Convention for the Protection of Human Rights and Fundamental Freedoms (No 209 / 1992 Coll.) is consistent with Article 1 of the Additional Protocol to the Convention in the event of a reduction of the rent provided for by the Treaty (judgment in Mellacher and Others of 1989, A-169). The Court of First Instance found that it was in accordance with Article 1 of the Additional Protocol when, within the framework of its policy, the legislator reasonably decides that the rent provided for by the contract on the basis of market conditions is unacceptable in terms of social justice. Article 1 caselaw The Additional Protocol then significantly clarifies how the European Court views questions of general interest, public utility, proportionality and fair balance relating to the adjustment of the use of property in accordance with the general interest.
For the sake of consistency of the view of the matter submitted for the decision of the Constitutional Court, the Ministry of Labour and Social Affairs notes that the first-time publishers' regulations also contained important protection for tenants (e.g. § 8 of Act No. 130 / 1922 Coll., § 8 and 9 of Law No. 44 / 1928 Coll. or § 7 of Decree-Law No. 228 / 1938 Coll.).
The Ministry of Labour and Social Affairs considers for all of the above aspects that the proposal of a group of senators to repeal Decree No. 176 / 1993 Coll., as amended, is not justified and therefore proposes its rejection.
The Ministry of Regional Development states in its statement that the proposal of a group of Senators to repeal the Order of the Ministry of Finance No. 176 / 1993 Coll., on the rental of the apartment and the payment for the performance provided with the use of the apartment, as amended, is not justified and proposes that it be rejected.
In particular, the proposal does not, in its view, take account of the specific nature of housing, which, as one of the essential needs, has an irreplaceable value. The solution to citizens' housing needs is an interest in both private and public, and cannot be left to market nature alone. Therefore, the housing market must be regulated by the State. This principle of state housing policy is in line with the right to housing, which is contained in particular in the International Covenant on Economic, Social and Cultural Rights and in other international documents. The deregulation of rent, including the prices for housing services, must be linked to the implementation of the overall concept of state housing policy.
The Ministry of Regional Development considers that the rent regulation must be assessed in the context of the current development and the current state of the apartment rental legislation. In 1991, in the framework of the extensive amendment of the Civil Code, new legislation on apartment rental was adopted. The current direct way of housing management, the unequal position of homeowners has been removed and further adjustments have been made towards greater contractual freedom of rental relationships. At the same time, however, it was considered necessary to allow for a unilateral adjustment of the rent level in order to achieve a balanced market level of rent. A different approach, taking into account the contractual nature of the rental of the apartment, would lead to the blocking of existing prices for transformed rents without the possibility of further deregulation. Since the rent was not substantially increased since 1964, the disproportion between the rent collected on the basis of the applicable rental relationships and the rent market was significant. The purpose of the legislation in force is to enable tenants to gradually overcome the difference between the amount of the rent initially agreed and the amount of the fixed rent envisaged, taking into account the interests of the lessors in the gradual adjustment of prices. Since the Civil Code, as a stable standard which should not be subject to frequent changes, is not optimal for a more detailed arrangement of rental prices, a mandate was incorporated into the law to issue a special provision governing rental prices.
According to the Ministry of Local Development, this concept is bound to be reflected in the area of the housing price, which is also a rental within the meaning of Section 877 of the Civil Code. In the current situation, the lessor has a monopoly position on the rental housing market. The flexibility of the rental sector with affordable apartments is very limited for the lessee, as it usually does not find other rental housing with a rental corresponding to its possibilities, even if it is willing to exchange its apartment for smaller, corresponding to its possibilities. This situation, which has lasted for several decades, does not allow tenants to use competition to negotiate a price that corresponds to the quality of service and the ability of demand. Therefore, the necessary levels of State interference in the contractual freedom to determine the rental prices were necessary. In the past, the rent regulation was carried out in a direct manner, on the one hand, by regulations on the so-called rent stop, and on the other hand by fixed and uniform prices established by category of apartment. However, regulation in itself cannot be unconstitutional, price regulation is applied to a number of other prices in our legal order as well as to the vast majority of applicable regulations abroad. Typically, rent from apartments is regulated to some extent abroad in most countries.
The current method of rent regulation does not determine the specific prices that the lessor negotiates with the lessee, but lays down rules for their negotiation depending on the way in which the construction is financed and distinguishes between the contracts previously concluded and the new contracts that are negotiated with new tenants where the regulation does not apply. For contracts previously concluded, it was necessary to respect the requirement of legal certainty for participants in existing civil law relations and to ensure sufficient stability of such legal relations before State intervention and, last but not least, their continuity. This was ensured by the provision of Section 871 of the Civil Code of Transformation, under which the current right of personal use for apartments was converted into rental of an apartment. At the same time, it was necessary to ensure that apartment rental was protected until a fully functioning housing market was established.
The Ministry of Local Development considers that it follows from the above that there is in no way a breach of the equality of property rights bodies within the meaning of Article 3 (1) of the Charter, since price regulation is linked to housing and not to persons.
With regard to the contradiction with Article 4 (1), (2), (3) and (4), the legal authorisation contained in the Civil Code is precisely the provision which is in mind in that article of the Charter in order to maintain compliance of the rule of law with the Charter.
In the opinion of the Ministry of Regional Development, the lease arrangement in rental relationships arising from the right to use flats does not affect the nature of the right to own, hold, dispose of and benefit from property. The owner, who has a house with rental apartments, assumes the burden of obligations arising from the applicable rental relationship law. This relationship is protected and, as has already been mentioned, gradual deregulation is in the interests of the owner, since by not allowing unilateral adjustments to the rent amount, it would have been frozen.
Article 26 (1) Each Charter shall have the right to free choice of profession and to prepare for it, as well as the right to undertake and pursue other economic activities. The link with Decree No. 176 / 1993 Coll. is not clear in this case. The conditions for the release of occupied flats are laid down in the Civil Code and not by decree, and for free flats their further use is entirely the property of the owner.
As to whether the legislation in force is contrary to Article 30 (2) of the Charter, the Ministry notes that the regulation of the rent amount is linked to an apartment and not to a person, and therefore cannot be said to favour a group of persons.
The necessary authorisation for the issue of a special provision for the regulation of rent from apartments and payments for transactions provided with the use of an apartment shall be provided directly by the Civil Code. The issue of the contested decree is in accordance with the Price Act and the Act on the competence of the Czech authorities in the field of prices. There is certainly no doubt about the existence of a fully functioning housing market in our Republic. It should therefore be considered right that the rent is regulated by a special regulation and included in the List of Goods at regulated prices. Similar regulation is the subject of Decree No. 176 / 1993 Coll. and Decree No. 85 / 1997 Coll., on rental of flats purchased in cooperative housing and payment for transactions provided with the use of these flats, also for the mentioned cooperative flats.
The Ministry of Regional Development points out that it is not without interest that, according to Section 696 of the Civil Code, a separate regulation will regulate cases in which the lessor can increase the rent by unilateral legal action. If this special rule is repealed without replacing the existing system with a new regulation, the rent on flats will remain practically frozen at the level of existing rental contracts. There will therefore be a situation which is in direct contrast with the aim that the applicants clearly wanted to achieve.
Finally, in the view of the Ministry of Local Development, the argument, not legal, is that the government is preparing, in accordance with the new concept of housing policy, approved on 18 October 1999, a draft new rental law which, with effect from 1 January 2002, would abolish the current administrative and hard (absolute) regulation of rent from flats and replace it with a standard contract price system. This system will allow for a separate and market-authentic development of the rental price, but at the same time effective protection of the lessee as a consumer against excessive price jumps and disproportionate requirements of the lessor. The preparation of the law is inspired by German legislation.
For all these reasons, the Ministry of Regional Development is of the opinion that it is necessary for the Constitutional Court to reject the above-mentioned Senate proposal.
The Decree of the Ministry of Finance No. 176 / 1993 Coll. was issued on the basis of the provisions of § 20 paragraph 1 (a) of Act No. 526 / 1990 Coll., according to which the Federal Ministry of Finance, the Ministry of Finance of the Czech Republic and the Ministry of Finance of the Slovak Republic will jointly issue generally binding legislation on the method of negotiating prices, the definition of disproportionate economic benefit and the unjustified asset benefits obtained by breach of price regulations, the procedure for regulating prices, price records, the provision of price information and price control. By law No. 135 / 1994 Coll. the provision cited in Paragraph 20 was deleted, but the deletion of that provision cannot in itself result in the unconstitutional nature of the contested decree because it no longer has the support of legal authority. The publication of the empowering legal provision cannot automatically annul the decree issued on the basis of this authorisation, unless expressly stated in the Act, so that the contested decree remains a valid part of the Czech legal order, in particular in a situation where that authorisation, in this respect duplicate, is included in the later Act of the Czech National Council No. 265 / 1991 Coll., on the competence of the authorities of the Czech Republic in the field of prices, in its provision § 2 (2).
As regards the substantive aspects, in the view of the Constitutional Court, the objective of the protection of tenants, including as regards the increase of rent, has been continuously pursued since the 1920s (Act No. 275 / 1920 Coll., No. 130 / 1922 Coll. and No. 44 / 1928 Coll. - the full text of the latter Act was published by Decree of the Minister of Social Welfare No. 62 / 1934 Coll.) and later in the post-war period, or by the issue of Civil Code No. 141 / 1950 Coll., No. 40 / 1964 Coll., as amended. In this context, it will not stand as a relevant reference to the fact that the Parliament of the Czech Republic has not included the right of residence in the category of fundamental rights and freedoms; on the contrary, all the existing arrangements appear to be in line with what happens in the international human rights and fundamental freedoms treaties, whereby the Czech Republic is directly bound under Article 10 of the Constitution, referred to as "the right of every individual to an adequate standard of living for him and his family, including sufficient nutrition, clothing, apartment and continuous improvement of living conditions' (Article 11 (1) of the Pact). Similarly, Article 16 of the European Social Charter and Article 4 of the Additional Protocol to the Charter, which have been ratified and declared by the Czech Republic (Article 10 of the Constitution), address the issue of housing. The right to sufficient (reasonable) housing (Article 11 (1) of the Pact) includes, inter alia, the aspect of the rental ability, according to the General Notes of the Committee on Economic, Social and Cultural Rights No 4 of 1991. The amount of the rent paid by an individual or the cost of use of an apartment should be at a level which does not threaten or undermine the satisfaction of other essential needs. The Contracting States should generally proceed in such a way that the percentage of the cost of housing is not disproportionate to income. Therefore, the Contracting States should adjust the rental contributions to those who do not have the means to pay the rent, as well as the modality and level of the lease payments, which faithfully reflect the needs of this issue. In accordance with the principle of respect for the ability to pay rent, tenants should be protected by appropriate measures against excessive rents or against excessive increases in rents. This right enshrined in Article 11 For the reasons set out above, the Constitutional Court considers the Pact to be an objective for which our State, as amended by this Article, is obliged to take" appropriate action. "Comparable rights, although limited to the benefit of the family or of the elderly, include Article 16 of the European Social Charter (Family right to social, legal and economic protection), which became valid for the Czech Republic on 3 December 1999 and was published under No 14 of the International Treaties, and Article 4 (2) (a) (The right of the elderly to social protection) of the Additional Protocol to the European Social Charter of 5 May 1998, which entered into force for the Czech Republic on 17 December 1999 and was published in the Collection of International Treaties under No 15 / 2000. The European Court of Human Rights also dealt with the same issue, namely the Mellacher case in Austria (19 December 1989, A - 169). In its decision, in which it did not find infringement of Article 1 of Additional Protocol 1 to the Convention in the event of a complaint by several property owners against the introduction of a regulation and therefore a de facto reduction in rent, that court expressed certain general conclusions applicable in the present case. It concluded, first of all, that the measures aimed at regulating rent could not be regarded as a formal or de facto expropriation, since there was neither the transfer of the assets of the complainants nor the right to use, rent or sell it. The contested measures, which undoubtedly deprived them of part of the proceeds from their assets, can be seen under the circumstances as controlling the use of those assets. Second paragraph of Article 1 Additional Protocol No 1 gives States the right to adopt such laws as they deem necessary to control the use of property in accordance with the general interest. Such laws are particularly necessary and common in the area of housing, which in modern societies becomes the central issue of social and economic policy. In order to implement such a policy, legislation must have a wide margin for consideration (assessment), both in determining whether there is a public interest which justifies the application of guidance (control) measures and in selecting detailed rules for the implementation of such measures. As the Court pointed out in the case of James and others, State interference must respect the principle of fair balance between the requirement of the general interest of society and the requirement to protect the fundamental rights of an individual. The search for such a balance is reflected in the structure of Article 1 as a whole and therefore also in Article 1 (2) of Additional Protocol 1 to the Convention, in other words, there must be a reasonable (justified) relationship between the resources used and the objectives pursued.
It is true that the Charter, as a constitutional law, did not expressly mention the right of protection, including housing, between declared social rights. However, this circumstance does not in any way disqualify the constitutional relevance of this right enshrined in those international treaties. In line with the established principle, constitutional and contractual human rights catalogues are complementary and work in harmony. This principle is explicitly expressed both by individual international human rights treaties and by modern institutions. Article 60 of the Convention on the Protection of Human Rights and Fundamental Freedoms, which provides that "Nothing in this Convention shall be interpreted as restricting or abolishing human rights and fundamental freedoms which may be recognised by the laws of any High Contracting Party or any other Convention to which it is a Party ', as well as Article 32 of the European Social Charter, under which" The provisions of this Charter shall not be prejudiced by those provisions of domestic law or any bilateral or multilateral treaty which already applies or enters into force under which more favourable treatment is granted to protected persons'. The constitutional texts may include, for example, the 1993 Constitution of the Russian Federation, whose Article 55 states that the constitutional catalogue of fundamental rights and freedoms must not be interpreted in such a way as to deny or restrict other universally recognised rights and freedoms. Similar provisions include, for example, Article 43 of the Armenian Constitution of 1996 or Article 17 (2) of the Albanian Constitution of 1998. It follows from that principle that the non-imposition of a certain right (in this case the right to protect an adequate standard of living, including housing) in the Charter must not be interpreted as a restriction on that right guaranteed by individuals under international human rights and fundamental freedoms treaties, with the individual guaranteed "more favourable treatment '(in this case under the international treaty).
In this context, the appellants' argument that Decree No 176 / 1993 Coll. protects only a group of tenants in rent-controlled dwellings, thus creating the difference and inequality between apartment owners with rent-controlled dwellings and apartment owners with apartments in which the rent is negotiated by agreement of the Contracting Parties, as well as between apartment tenants in rental-controlled dwellings with rent-controlled dwellings and apartment-tenants in apartments with apartments in which the rent is negotiated by agreement of the Contracting Parties. The fact that the contested Decree, in view of the provisions of Paragraph 2 (2) (a), (b), excludes the regulation of rent in such a provision in taxa-defined cases, can, in the view of the Constitutional Court, be considered to be entirely natural and logical, since in both cases it concerns "inputs' to the contractual relationship, inputs governed essentially by the principle of contractual autonomy. If this could not in principle be the case, then, for example, the right to do business in the field of rental housing, that is, the right enshrined in Article 26 (1) of the Charter in its general form, would be merely" paper law. "
However, in the view of the Constitutional Court, the principle of appropriate (fair) balance was affected in the present case in one of the fundamental moments which cannot be separated from the contested decree as a whole, as long as the contested decree did not take account of the process of destruction of property law after February 1948. The Civil Code No. 141 / 1950 Coll. already introduced a distinction between so-called personal and private ownership (§ 105, 106) and, in the provision of § 110, the ideological slogan set out that ownership of land is based on the principle "land belongs to those working on it." The process of destruction of property law was deepened by the adoption of Civil Code No. 40 / 1964 Coll., which introduced the Institute of the so-called personal use of flats, other rooms and land, moved the private property arrangements between the final provisions and, in other directions, restricted and challenged the property law in a manner contrary to the general legal principles recognised by civilized nations. The substatutory lease arrangements contained in Decree No. 411 / 1950 Ú. l., No. 371 / 1952 Ú. l., No. 60 / 1964 Coll. and No. 217 / 1988 Coll. While the first public legislation in this area only provided for an increase in rent without otherwise affecting the rent already agreed, the Order of the Ministry of Labour and Social Welfare No 411 / 1950 Ú. l., on the modification of the rent of apartments and other rooms completed after 5 May 1945 laid down categorically in the provision of § 2, as a basic provision, that the rent can only be requested and paid at the level determined in accordance with that decree. The Decree of the Minister of Finance No 371 / 1952 Ú. l, on the separation of rent from buildings into special accounts with state savings banks, then made the owner rather a hostage in the hands of the State when, in Paragraph 1, the owner of the building's obligation under this provision laid down a special lease account with the State savings bank, in Paragraph 4, the owner's obligation to pay the selected quarterly or monthly rent savings bank to that special account and in Paragraph 5, with that obligation of the owner corresponding to the savings bank's obligation, with the provision 10 and 11, at the same time, the conditions for the release of the amounts needed for the repair of the building, the payment of ownership public liabilities, etc. The obligation to pay rent to special rental accounts was also left to the Order of the Ministry of Finance, Prices and Wages of the Czech Socialist Republic No. 217 / 1988 Coll. All these restrictions on ownership, which have been triggered by the tendency of the political system to eliminate so-called private property as a potential source of certain economic autonomy, have led to donations, especially rents, of their owners' homes, starting from the 1950s, which are hardly imaginable in the conditions of a functioning democratic state. On the contrary, after the November events of 1989 and after the issue of Act No. 87 / 1991 Coll., on extrajudicial rehabilitation, also in a significant number of cases, restitution claims for the return of these objects to their former owners or their legal successors were applied. It is a well-known fact that countless of these properties were issued to these former owners or their legal successors in a very poor state, so that certain categories of owners, in particular owners of rental houses, could not meet the basic obligations of the lessor contained in § 687 (1) of the Civil Code. Thus, in dealing with the disproportion between the continuous protection of tenants and the stated destructive quarries into property law during the period of the 50-80 years, the contested decree acted entirely unilaterally. For example, in order to be able to meet the obligations already stated by the owners of the rental houses and to give real effect to the right of the individual to live properly within the meaning of Article 11 of the Pact, a journey that had already been followed by the first publishers' legislature, which in the provision of § 9 (4) of Act No. 32 / 1934 Coll., as amended, allowed for the increase of the rent due to the reimbursement of the cost of occasional or extraordinary repairs and renewal of the house.
In summary, the fact that, from the beginning of the 1950s to the late 1980s, the protection of tenants has been consistently enforced, including in terms of the increase in rent, while, on the other hand, the right to peaceful use of property within the meaning of Article 1 of Additional Protocol No 1 to the Convention and the right enshrined in Article 11 (1) of the Charter has been substantially challenged and the right of ownership has been eliminated in a number of owners. In fact, the fact that, unlike other owners, those categories of owners are not only denied some of the essential rights constituting the content of their property rights, but also that they are manoeuvred into a situation where, in a number of cases, in particular where, for example, in rental houses, the income is only a source of rent from apartments, in fact they are forced to entrust themselves with what the Constitutional Court has shown to be a matter of a social nature and responsibility, namely a burden which cannot be eliminated only by a certain social group and the gravity of which requires, as stated in the General Notes of the Committee on Economic, Social and Cultural Rights of 1991 (the Law of the Constitutional Tribunal), a genuinely responsible and balanced approach by the State and the whole company. As has already been stated, for example, in the finding of the Constitutional Court of Pl. ÚS 4 / 95 published in the Collection of Found and Order of the Constitutional Court of the Czech Republic in Volume 3 of 1995 - Part I under Rule 29, inequality in social relations, if it is to affect fundamental human rights, must achieve an intensity challenging, at least in a certain way, to the very essence of equality. This is usually the case when an infringement of another fundamental right, such as the right to own property pursuant to Article 11 of the Charter, is also linked to an infringement of equality. While freedom is in substance given directly by the essence of the individual, equality usually requires "interlinks," a relation to other social values. In the view of the Constitutional Court, this is an infringement of equality in the concept already stated and in the present case, since the contested decree infringes the right of ownership, which is constitutionally guaranteed in Article 1 of Additional Protocol No 1 to the Convention and in Article 11 (1) of the Charter. This is because, in fact, the category of owners of "subsidizing" rent - and in many cases, municipalities that own and rent houses are already included in this category - is, unlike other owners, the content and performance of a number of basic rights of the owner, which constitute the content of the property right, unjustifiably challenged and denied. While there is no doubt that these discriminated categories of owners are also required to comply with certain restrictions as regards the issue of the increase in rent, this can only be done if the conditions of Article 4 (3) (4) of the Charter are met. Pursuant to paragraph 3 of that Article, statutory restrictions on fundamental rights and freedoms must apply equally to all cases which fulfil the conditions laid down, whereas, pursuant to paragraph 4 of that Article, when applying the provisions on the limits of fundamental rights and freedoms, their substance and their meaning must be investigated. However, this is not the case in the present case, and according to the opinion of the Constitutional Court, the contested order is also contrary to Article 4 (3), (4) of the Charter, since certain categories of owners are forced to submit to substantial restrictions on their property rights, while others are not, and that restriction occurs in a way that is hardly related to the examination of the substance of the property right.
In the view of the Constitutional Court, the principle of reasonable (fair) balance requires that, while respecting the requirements contained in Article 11, The Pact was taken into account in the process of the destruction of property rights, in particular as regards owners of rental houses, discriminated against in proportion to other owners, or so-called family houses, by denying them the benefit and benefit of their ownership, since in fact, given the amount of the rent and the amount of the costs necessary to operate, often in a catastrophic state of real estate, part of the rent, which would otherwise have been considered appropriate in view of all circumstances, would have to be borne by them. In other words, as a result of the current legislation, there are now social groups or entities in our society which pay what they have to do in order to comply with Article 11 The Pact is to be provided by the State. Price regulation, if it is not to exceed the limits of constitutionality, must clearly not reduce the price so as to eliminate at least its return, given all the costs that have been demonstrated and necessarily incurred, because in this case it would actually imply a denial of the purpose and of all the ownership functions.
Finally, as regards the appellants contesting the infringement of Article 26 (1) of the Charter, the Constitutional Court also considers that price regulation does not prevent anyone from doing or operating any other economic activity, since everyone has the freedom to decide whether to do business in a given area under the conditions laid down. Moreover, the rent regulation does not apply to newly concluded lease contracts and is therefore not in the way of business activity.
The Constitutional Court concluded that the Order of the Ministry of Finance No 176 / 1993 Coll. was in breach of Article 1 of Additional Protocol No 1 to the Convention, Articles 11 (1), 4 (3) and 4 of the Charter and Article 1 of the Constitution, and therefore annulled it on 31 December 2001, pursuant to Article 70 (1) of Law No 182 / 1993, in order to provide sufficient time for legislation to create new quality legislation.
President of the Constitutional Court:
JUDr. Kessler v. r.
He delivered a different opinion on the decision of the plenary in accordance with Article 14 of Act No. 182 / 1993 Coll., on the Constitutional Court, Judge JUDr. Vladimir Paul.
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Regulation Information
| Citation | The Constitutional Court found No 231 / 2000 Coll., on the application for annulment of the Order of the Ministry of Finance No. 176 / 1993 Coll., on the rent of the apartment and payment for the transactions provided with the use of the apartment, as amended |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 01.08.2000 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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