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On the privatisation of residential premises

Case No. 16/94

THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA

R U L I N G

On the compliance of Item 2.2.2 of the Resolution of the Government of the Republic of Lithuania “On Supplementing and Partially Amending Some Resolutions of the Government of the Republic of Lithuania Concerning the Privatisation of Apartments” of 3 September 1993 with the Republic of Lithuania’s Law on the Privatisation of Apartments

3 November 1994, Vilnius

The Constitutional Court of the Republic of Lithuania, composed from the Justices of the Constitutional Court: Algirdas Gailiūnas, Kęstutis Lapinskas, Zigmas Levickis, Vladas Pavilonis, Pranas Vytautas Rasimavičius, Stasys Stačiokas, Teodora Staugaitienė, Stasys Šedbaras, and Juozas Žilys

The court reporter—Rolanda Stimbirytė

Irena Butrimienė, deputy Director of Municipal Economy and Public Utilities Department under the Ministry of Construction and Urban Development, acting as the representative of the Government, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1, Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1, Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, in its public hearing, on 27 October 1994, considered case No. 16/94 subsequent to the petition submitted by the Kaunas City Local Court requesting an investigation into whether Item 2.2.2 of the Government Resolution “On Supplementing and Partially Amending Some Resolutions of the Government of the Republic of Lithuania Concerning the Privatisation of Apartments” of 3 September 1993 is in compliance with the Republic of Lithuania’s Law on the Privatisation of Apartments

The Constitutional Court

has established:

I

On 16 May 1994, the Kaunas City Local Court, the petitioner, considered a civil case upon the actions brought to the court by plaintiffs N. Kubilienė and A. Bernotaitė against the State Institute of Design “Pramprojektas”, the defendant, pertaining to privatisation of rooms in hostels. The Court by its ruling suspended the consideration of that case and addressed the Constitutional Court with a petition requesting an investigation into whether the provision “a tenant who refuses preferential credit for the construction of a cooperative apartment may not privatise a room in a hostel” established in Item 2.2.2 of the Government Resolution “On Supplementing and Partially Amending Some Resolutions of the Government of the Republic of Lithuania Concerning the Privatisation of Apartments” of 3 September 1993 (Official Gazette Valstybės žinios, 1993, No. 44(29)-897; hereinafter referred to as the impugned resolution) is in conformity with the Law on the Privatisation of Apartments.

In the request the petitioner specified that, under Article 2 of the Law on the Privatisation of Apartments, apart from flats, rooms in hostels belonging to the state and public housing fund shall be the object of purchase-sale. According to the procedure established in Article 3 of said Law, apartments rented by the persons who have joined the house building cooperatives, shall not be privatised in the event that these persons are given preferential credit. The Law on the Privatisation of Apartments does not prohibit to privatise rooms in hostels. In the Law on the Privatisation of Apartments, the legislature distinguished two separate notions—“apartments” and “rooms in hostels”. The Government also distinguished these notions in the impugned resolution by specifying that a tenant who refuses preferential credit for the construction of a cooperative apartment may privatise the apartment he rents. Pursuant to Item 2.2.2 of the impugned resolution, a tenant may not privatise a hostel room in the procedure prescribed by the Law on Privatisation on Apartments even when he refuses preferential credit given for the construction of a cooperative apartment.

II

During the preliminary investigation of the case and in the court hearing the representatives of the party concerned explained that the State’s purpose was to attain that every family would have a separate flat—either by right of ownership or by lease. Such a provision is established in Article 344 of the Civil Code and Item 3 of Paragraph 1 of Article 11 of the Republic of Lithuania’s Law on Housing.

On 20 December 1991 the first paragraph of Article 3 of the Law on the Privatisation of Apartments was supplemented with Item 4, which contains the provision that, under this Law, apartments rented by the persons who received preferential credit for the construction of a cooperative apartment or house, shall not be privatised. However, the Government taking into account the hardships in construction of residential houses and crediting thereof, also the fact that a new draft Law on Housing was under way, and striving to reduce the social tension, provided the possibility for the tenants either to privatise the residential premises under the Law on the Privatisation of Apartments, i.e. in easy-term procedure, or to use the privileges given by the State for the construction of an apartment.

On 15 July 1993, the object of premises subject to restoration under the Law on the Privatisation of Apartments was expanded. In the first paragraph of Article 3 of this Law it was established that the object of purchase-sale shall be “residential houses belonging to the state and public housing fund, apartments in apartment houses, apartments and rooms in hostels (hereinafter referred to as residential houses, apartments)”. Thus, rooms in hostels, i.e. residential premises that do not meet the requirements of a separate apartment, have also become the object of purchase-sale.

The representative of the party concerned maintained that more than 90 percent of the residents, who until the adoption of said amendment to the Law had expressed their will to privatise apartments, had already privatised them. The Government has also adopted other resolutions concerning the hostels, that were meant for the implementation of the principle that vacant rooms in hostels must be allotted for other inhabitants residing in these hostels who are allowed to make residential premises that met the requirements set for apartments. Therefore, the Government has not provided for any possibility for persons living in hostel rooms and apartments with commonly used kitchens to choose whether to buy the leased room in a hostel in easy-term procedure or to build an apartment using state support.

In the opinion of the party concerned, the impugned provision of Item 2.2.2 of the government resolution is in conformity with the Law on the Privatisation of Apartments.

The Constitutional Court

holds that:

Upon the reinstatement of the constitutional institute of the right of private ownership into the legal system of the Republic of Lithuania, laws were adopted on privatisation of state and public housing fund. Privatisation of apartments became one of the social policies pursued by the State. By way of implementing this policy, the Law on the Privatisation of Apartments was adopted which was enforced on 30 June 1991.

In the first paragraph of Article 2 of the Law on the Privatisation of Apartments it was established that “the object of purchase-sale shall be residential houses, apartments in apartment houses and hostels (hereinafter referred to as residential houses, apartments)” belonging to the state and public housing fund. Item 2 of the Supreme Council Resolution “On the Entry into Force of the Republic of Lithuania’s Law on the Privatisation of Apartments” of 30 May 1991 prescribes the conditions the apartments in hostels should meet in order to privatise them. The conditions are as follows: “1)separate apartments are turned (reconstructed) into hostels; 2) residential premises used as hostels meet the requirements of a separate apartment: there is a separate entrance, living rooms, kitchen and other facilities of the apartment that comply with the conditions of that locality”. In Item 2 of the first paragraph of Article 3 of the Law on the Privatisation of Apartments it was determined that, under this Law, the rooms in hostels would not be sold. These norms have established the provisions limiting the rights of some part of the citizens of Lithuania who live in hostels to privatise residential premises that fail to meet the requirements set for apartments.

The first paragraph of Article 2 of the Law on the Privatisation of Apartments was formulated in the Republic of Lithuania’s Law “On Supplementing and Amending the Republic of Lithuania’s Law on the Privatisation of Apartments” of 15 July 1993 in the following way: “The object of purchase-sale shall be residential houses, apartments in apartment houses, apartments and rooms in hostels (hereinafter referred to as residential houses, apartments)”. According to this norm, rooms in hostels may be privatised except those hostels “which in the procedure prescribed by the Government are allotted for the residence of pupils, students and doctoral students of secondary and vocational schools, institutions of further and higher education as well as rooms in hostels belonging to the Lithuanian Union of the Blind and Weak-sighted, the Lithuania Society for the Deaf and Lithuanian Society of the Disabled”.

On 20 December 1991, the first paragraph of Article 3 of the Law on the Privatisation of Apartments entitled “Residential houses and apartments not subject to privatisation” was supplemented with Item 4 which reads: “4) apartments rented by persons who have been allotted a plot of land for the construction of an individual residential house or who have joined the house building cooperative, if said persons are given preferential credits for the construction of a residential house or if the plot of the land allotted for the construction of an individual house is in the area connected to the main engineering network, shall not be privatised”.

This norm of the Law contains the provision that apartments rented by persons who have joined the house building cooperatives, shall not be privatised, if said persons are given preferential credits. At the same time, Article 4 of the Law on the Privatisation of Apartments was supplemented with the fourth paragraph specifying that “a tenant, along with family members, upon the acquisition of ownership rights to a residential house or apartment they have bought, under this Law may not privatise another residential house or apartment”. The legislature has interpreted that privatisation of an apartment is in accordance with the Law on the Privatisation of Apartments and preferential credit given for the construction of an apartment are separate forms of state support for its residents and the latter may use only one of them. This is confirmed also in Article 12 of the Law on Housing prescribing the right for the citizens to choose one of the forms of support—either to exercise the right to get preferential credit for the construction or purchase of a residential house or apartment, or to buy in instalments residential premises rented from municipalities and state enterprises.

However, the Law on the Privatisation of Apartments says nothing about the right to privatise apartments belonging to the state and public housing fund to the persons who refused preferential credit offered to them for the construction of an apartment. By its Resolution “On Partially Amending and Supplementing the 31 July 1991 Resolution (No. 309) of the Government of the Republic of Lithuania” of 22 January 1992, the Government has supplemented Item 4 with section 5 and established that in the case that a tenant belongs to the house building cooperative and refuses preferential credit, he is allowed to privatise the rented residential house or apartment.

The contents of general notion “apartment” was expanded upon the amendment of the first paragraph of Article 2 of the Law on the Privatisation of Apartments by the Law of 15 June 1993. The notion has been supplemented with a new object of sale and purchase, i.e. rooms in hostels. By this supplement it has been established that preferential credit for the construction of an apartment is a uniform condition for privatisation of the apartment irrespective of the fact whether an apartment or a room in a hostel is bought.

Having established in the impugned resolution the provision that a tenant who refuses preferential credit for the construction of a cooperative apartment may not privatise a room in hostel, the Government established different conditions for the privatisation of apartments and rooms in hostels. Such different conditions with regard to individual groups of persons have not been provided for in the Law on the Privatisation of Apartments, therefore, this provision contradicts the first paragraph of Article 2 and Item 4 of Paragraph 1 of Article 3 of said Law.

Conforming to Article 102 of the Constitution of the Republic of Lithuania as well as Articles 53, 54, 55, 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

To recognise that the provision that a tenant who refuses preferential credit for the construction of a cooperative apartment may not privatise a room in a hostel, established in Item 2.2.2 of the Resolution of the Government of the Republic of Lithuania “On Supplementing and Partially Amending Some Resolutions of the Government of the Republic of Lithuania Concerning the Privatisation of Apartments” of 3 September 1993, which has amended the fifth section of Item 4 of the Resolution “On the Procedure for the Privatisation, Sale and Use of Apartments” of 31 July 1991, contradicts the first paragraph of Article 2 and Item 4 of Paragraph 1 of Article 3 of the Republic of Lithuania’s Law on the Privatisation of Apartments.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:

Algirdas Gailiūnas                           Kęstutis Lapinskas                           Zigmas Levickis

Vladas Pavilonis                              Pranas Vytautas Rasimavičius         Teodora Staugaitienė

Stasys Šedbaras                               Juozas Žilys