Land use rights comply with the Constitution, while the amount of land use fees does not
The Constitutional Court held that the right to use land regulated in the contested provisions, which replaced the previously existing compulsory lease of land, must be recognised as being compatible with the Constitution. However, the land use fee established in the contested provisions does not comply with the right to own property guaranteed by the Constitution and the principle of protection of legitimate expectations.
Nine cases were initiated before the Constitutional Court on the basis of applications by several individuals, which were consolidated into one case. The applicants own land or undivided shares of land on which structures belonging to other persons are located. The applicants indicated that the institution of the right to use land and the amount of the land use fee do not comply with the right to own property, the principle of equality, the principle of protection of legitimate expectations, as well as the right to a fair trial. However, in the opinion of the Saeima the land use fee is a fair compensation, since the legal relations of the persons involved in the shared ownership have been simplified.
The Constitutional Court held that the land use rights regulated by the contested provisions should be recognised as being compatible with the Constitution, since such regulation not only ensures protection of the rights and legitimate interests of the participants in the legal relations of shared property, but also introduces clarity and predictability in the real estate market. However, the Court recognised the land use fee in the amount of four per cent established in the contested provisions as being incompatible with the Constitution, because, by establishing this fee and the compensation to the land owner included therein in the amount of 2.5 per cent of the cadastral value of the land in use, the legislator has not justified that the expenses which would reduce the income of the land owner from the land transferred for use would be taken into account. The Court held that there was an alternative remedy that would be less restrictive of the landowner’s rights.
The unconstitutional provisions were declared null and void as of 1 July 2024, giving the legislator time to fairly balance the rights of land owners and owners of structures. However, with regard to the provision which stipulated that the previously adopted decisions of courts of general jurisdiction on compulsory legal lease relations would not be effective as of 1 January 2023, the Constitutional Court dismissed the proceedings. Likewise, the Constitutional Court terminated the proceedings in the case in the part concerning compliance of the contested provisions with the principle of legal equality included in the first sentence of Article 91 of the Constitution.
Linked case: 2022-02-01