A case on restrictions to lease payments in case of compulsory lease relations has been initiated
The First Panel of the Constitutional Court has initiated a case “On Compliance of the Words “and the Annual Fee for the Land Lease shall not Exceed 5% from the Cadastral Value of the Land” of the Note to Section 12 (1) and (2) of the Law “On Land Reform in the Cities of the Republic of Latvia” with Article 91 and Article 105 of the Satversme of the Republic of Latvia”.
Article 91 of the Satversme guarantees equality before the law and the courts; whilst Article 105 of the Satversme provides the right of every person to property, which can be restricted only in cases established by law.
The contested norm provides that in the case of compulsory lease, a lessor cannot request lease payment which exceeds five percent of the cadastral value of the property per year.
The applicant, a JSC “Pilsētas zemes dienests” indicates that that the regulatory framework of the contested norms does not permit a land owner to lease his or her land for a free and economically grounded lease payment and under reasonable provisions, as well as it reduces economical value of a particular land plot.
Moreover, the applicant enjoys worse conditions if compared to land owners, on whose land plots multi-storied residential houses, water supply, heat supply and energy supply belonging to the State or local governments are located because for them the Law not only establishes higher limit of lease payment, i.e. at the amount of six per cent, but also provides for compensation of immovable property tax.
The Saeima was asked to provide, before 13 September 2011, to provide a reply on facts of the case and legal justification thereof. The term of preparation of the case is 13 December 2011.
Linked case: 2011-13-01