Legal proceedings in the case on restrictions to lease payment in case of compulsory lease have been terminated
On 27 January 2012, the Constitutional Court adopted a decision to terminate proceedings in the case No. 2011-13-01 “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) Indent a 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”
Contested Norm
Section 12 (1) of the Law “On Land Reform in the Cities of Latvia” establishes procedure, according to which former owners of land or their heirs shall be restored land ownership rights to the plots of land that have previously belonged to them within the boundaries, which are specified in the utilisation projects of cities or individual plots of land approved by local governments.
As to cases referred to in Section 12 (1) indent 1 and 2, the law contains a reference – if the owner of the building does not want to receive land in ownership in return for payment or he or she does not have the right to acquire land in ownership, the land shall remain in the ownership of a natural person, his or her heirs or a legal person, to whom it belonged until 21 July 1940 and who has requested the land, but the owner of the building shall be guaranteed the land lease rights according to the size of the land, which was in his or her legal use (for building), and the annual fee for the land lease shall not exceed 5% from the cadastral value of the land.
The Facts
The Applicant SJC “Pilsētas zemes dienests” indicated that the regulatory framework included in the Contested Norm does not permit the owner to let land owned by him or her for a free and economically grounded price, as well as reasonable terms, as well as reduces economic value of the land parcel.
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.
Findings and Ruling of the Court
On 22 September 2011, the Saeima adopted the law “Amendments to the Law “On Land Reform in the Cities of the Republic of Latvia”” by substituting the words “annual fee for the land lease shall not exceed 5% from the cadastral value of the land” of Section 12 (1) indent 1 and 2 of the Law “On Land Reform in the Cities of the Republic of Latvia” by the following words: “fee for the land lease shall be established based on a written agreement by the parties. Should parties fail to agree, annual fee for the land lease shall be 6 per cent of the cadastral value of the land”. The Law “Amendments to the Law “On Land Reform in the Cities of the Republic of Latvia”” was published, on 5 October 2011, in the newspaper “Latvijas Vēstnesis” and came into effect on 19 October 2011.
Article 29 (1) Indent 2 of the Constitutional Court Law provides that Judicial proceedings of a matter may be terminated until pronouncement of the judgment at the decision of the Constitutional Court if the disputed legal norm (act) has ceased to be in force.
Before adopting the decision regarding termination of proceedings in the present case, the Constitutional Court assessed whether there exist any considerations testifying necessity to continue proceedings in the present case.
As to the claim of the Applicant regarding recognition of the Contested Norm as null and void as from the date of its adoption, the Constitutional Court recognized it as ungrounded and added that it has several times assessed legal norms regulating compulsory legal relations. However, the Constitutional Court has not granted retroactive force to judgements because recognition of legal norms as null and void as from the date of adoption of them would considerably infringe rights of owners of the buildings. Consequently, this would assure certainty in the domain where such legal stability is of great importance.
The Constitutional Court terminated legal proceedings in the case No. 2011-13-01” 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) Indent a 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”.
The Judgment of the case is final and not subject to appeal.
Linked case: 2011-13-01