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On the restoration of the ownership rights of citizens to residential houses

Case No. 11-1993/9-1994

 THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA

 R U L I N G

 On the compliance of Item 4 of Paragraph 2 of Item 2 of the Republic of Lithuania’s Law “On Amending the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 12 January 1993 by which Item 2 of Paragraph 2 of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been amended, and Subitem 4 of Item 2 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994, by which the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been supplemented with Item 4, with the Constitution of the Republic of Lithuania

15 June 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

Seimas member Andrius Kubilius and the advocate Narcizas Rasimavičius, acting as the representatives of a group of members of the Seimas, the petitioner

Seimas member Pranciškus Vitkevičius and Algirdas Taminskas, acting as the representatives of the Seimas, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, in its public hearing, on 6 June 1994, considered case No. 11-1993/9-1994 subsequent to the petition submitted to the Court by a group of members of the Seimas of the Republic of Lithuania requesting an investigation into whether Item 4 of Paragraph 2 of Item 2 of the Republic of Lithuania’s Law “On Amending the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 12 January 1993 by which Item 2 of Paragraph 2 of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been amended, is compliance with the Constitution of the Republic of Lithuania, as well as the petition submitted to the Court by the College of Civil Cases of the Supreme Court requesting an investigation into whether Item 4 of Paragraph 2 of Item 2 of said Law of 12 January 1993 and Subitem 4 of Item 2 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994, by which the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been supplemented with Item 4, is in compliance with the Constitution of the Republic of Lithuania.

The requests of a group of the Seimas members and the Panel of Civil Cases of the Supreme Court have been joined into one case on the decision of the Constitutional Court, adopted on 27 May 1994.

The Constitutional Court

has established:

On 18 June 1991 the Seimas passed the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” (hereinafter it shall be referred to as “Law”), in the first and second paragraphs of Article 8 entitled “Conditions and Procedures for the Restoration of Ownership Rights to Residential Houses” of which it is determined: “The ownership rights to residential houses (or portion thereof) shall be restored to persons specified in Article 2 of this law by restituting the houses (or a portion thereof) in kind, or by compensating their value.

The procedure and time limits for the restoration of residential houses (or portions thereof) which do not fall under the category of houses defined in Article 14 of this Law, shall be established by the Government of the Republic of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that:

1) they are reconstructed into premises not designed for living or if they are vacant;

2) tenants, occupying houses subject to being restituted, and which are occupied by more than one family, are familiar with all the laws guaranteeing their rights, and with their option to move under the conditions proposed by the municipality and set forth in Article 21 of this Law, or under other conditions guaranteed by the former owner of the house;

3) the residential house consists of a single dwelling unit;

4) the former owners reside in the house which is subject to being restituted” (Official Gazette Valstybės žinios, 1991, No. 21-545).

The 7 May 1992 Law “On Supplementing and Amending the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” has supplemented the second paragraph of Article 8 of said Law with Item 5: residential houses shall be restituted in the case that “the residential house belonging to the state or public housing fund, together with equipment (with the exception of those already sold by the former owner), is on agricultural or forest land” (Official Gazette Valstybės žinios, 1992, No. 15-405).

On 12 January 1993, the Seimas adopted the Law “On Amending the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” (hereinafter it shall be referred to as “the 12 January 1993 Law”), which presented a new wording of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” (Official Gazette Valstybės žinios, 1993, No. 5-83). The previous norm of Item 2 of the second paragraph of this Article has been transferred into Item 4 of the same paragraph, and presented in the following way: the procedure and time limits for the restoration of residential houses (or portions thereof) shall be established by the Government of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that “tenants, occupying houses subject to being restituted, consent to move, of their own free will, into other residential premises allotted to them”.

A group of members of the Seimas, the petitioner, requests the Constitutional Court to recognise that said norm of the Law contradicts Article 23 of the Constitution. The petitioner bases the request on the fact that said Article of the Constitution establishes inviolability of property as well as the provision that the rights of ownership shall be protected by law. While establishing the option of tenants to move into other residential premises allotted to them, as the prerequisite for the restoration of residential houses, the Seimas violated Article 23 of the Constitution, i.e. refused to protect the rights of ownership by law and subjected the realisation of these rights to the will of the leaseholder.

The petitioner’s representatives have explained that: the norm of the Law that the residential houses shall be restituted in the case that “tenants, occupying houses subject to being restituted, consent to move, of their own free will, into other residential premises allotted to them”, contradicts the constitutional provision that the rights of ownership shall be protected by law. In the case that the tenants disagree to move into other residential premises allotted to them, the dwelling house is not restored to the owner and the latter is paid due compensation. The tenant’s agreement or disagreement to move into other residential premises is groundlessly put on the same footing as the needs of society mentioned in Article 23 of the Constitution.

Tenants are not to be blamed for the present situation as they have been moved into those flats by the former Government. For this reason, the 16 July 1991 resolution of the Supreme Council of the Republic of Lithuania regarding the procedure for the implementation and application of the Republic of Lithuania’s Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” provided for certain privileges for said persons, in case problems concerning the dwelling emerged. The Government at that time provided for the sources of funds necessary for the construction of dwelling units, however, after the election of 1992, a different policy has been pursued.

The petitioner’s representatives have specified that in the explanations of the representatives of the party concerned, submitted to the Constitutional Court, it is misinformed that even prior to the adoption of the amendment to the impugned Law, the restoration of the residential houses was related to the tenant’s free will to move into other residential premises allotted to him. Then it was established that the tenants were given the option to move into another dwelling unit, thus, their rights were not violated. If, upon the restoration of the rights of ownership, tenants did not desire to move, the problem could be solved pursuant to the norms of civil law.

The petitioner’s representatives request that the Constitutional Court recognise that Item 3 of the second paragraph of Article 8 of the Law (Item 4 of the second paragraph of Article 8 of the Law, at the time the petitioner applied to the Constitutional Court) contradicts the Constitution of the Republic of Lithuania.

On 11 January 1994, the Seimas adopted the Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” (hereinafter it shall be referred to as “the 11 January 1994 Law”), by which the contents and sequence of norms of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” has been amended and supplemented (Official Gazette Valstybės žinios, 1994, No. 7-100). Subject to these amendments, the first and second paragraphs have been formulated in the following way:

“The ownership right to residential houses (or portion thereof) shall be restored to persons specified in Article 2 of this Law by returning the houses (or portion thereof) in kind, or by compensating their value.

The procedure and time limits for the restoration of residential houses (or portion thereof) shall be established by the Government of the Republic of Lithuania, pursuant to the provision that the residential houses shall be restituted in the case that:

1) they are reconstructed into premises not designed for living or if they are vacant;

2) they are not given over to institutions of science, medical care, culture, education and communication;

3) tenants, occupying houses subject to being restituted, consent to move, of their own free will, into other residential premises allotted to them;

4) natural persons, having acquired for ownership houses (or portion thereof) subject to restoration, consent to move, of their own free will, into other residential premises allotted to them;

5) the former owners reside in the house which is subject to being restituted (in the event that former owners occupy part of the house, this part is unconditionally restituted to them);

6) residential houses along with equipment which have been transferred by the state, public, co-operative organisations (enterprises) as well as collective farms for the ownership of natural persons, (with exception of those transferred by the owners themselves), are on agricultural or forest land subject to restoration”.

On 31 January 1994, the Panel of Civil Cases of the Supreme Court, the petitioner, investigated a civil case pursuant to the action by E. Aleinikovienė and D. Didvalienė brought against the Šiauliai City Council, Mr. K. Kriščiūnas and Mr. B. Abromavičius, pertaining to the recognition of contracts of sale of dwelling units as null and void, the restoration of the rights of ownership to a portion of the residential house and restituting this house in kind.

The Panel of Civil Cases by its ruling suspended the investigation into the civil case and addressed the Constitutional Court with a petition requesting an investigation into whether Items 3 and 4 of the second paragraph of Article 8 of the Republic of Lithuania’s Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” are in conformity with Article 23 of the Constitution. The Panel of Civil Cases bases its request on the fact that the procedure and conditions for the restoration of residential houses (or portions thereof), which is a matter in dispute in the case under investigation in Court, are established in Article 8 of said Law. In accordance with Items 3 and 4 of the second paragraph of this Article, the restoration of the property in kind is subjected to the consent of tenants or other persons to move into other premises. These legal norms limit the owner’s right to demand and obtain property which he has stopped managing against his will. This has provided the ground for the Court to maintain that said norms contradict Article 23 of the Constitution.

The representatives of the party concerned have explained: the issue of contradiction to Article 23 of the Constitution may be raised only with regard to such a law, which establishes the possibility of violating the ownership rights. Persons specified in Article 2 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” may not be considered as owners whose rights have been violated, because no act of restitution, providing for the unconditional restoration of property for the former owners, has been adopted in the Republic of Lithuania. Besides, in case that these persons were regarded as owners whose rights have been violated, it would be recognised that the main provisions of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” contradict Article 143 of the Civil Code as well as other legal norms regulating the protection of ownership rights.

In the opinion of the representatives of the party concerned, the 12 January 1993 Law actually has not changed the former norm of Item 2 of the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991, which specified that residential houses shall be restituted in the case that “tenants, occupying houses subject to being restituted, and which are occupied by more than one family, are familiar with all the laws guaranteeing their rights, and with the option to move under the conditions proposed by the municipality and set forth in Article 21 of this Law, or under other conditions guaranteed by the former owner of the house”. This norm of the Law did not mean, however, that it was sufficient to familiarise tenants, occupying houses subject to being restituted, with their option to move into other residential premises. In the resolutions of the Supreme Council and the Government of the Republic of Lithuania, with regard to the period of the enforcement and application of said Law it was determined that tenants occupying houses subject to restitution shall be informed of their option to move, of their own free will, by settling on a dwelling unit allotted to them which complies with the requirements set forth in Article 94 of the Housing Code of the Republic of Lithuania.

However, the main problem was not given due attention at that time, i.e. real possibilities of building as many houses as it would suffice to provide all the tenants made to move from the houses subject to restoration to former owners. Therefore, the impugned (by the petitioner) provision of the 12 January 1993 Law, that the houses shall be restituted to the former owners in kind in the case that tenants, occupying houses subject to being restituted, consent to move, of their own free will, into other residential premises allotted to them, was preconditioned by the necessity to protect the leaseholders’ rights. That was the public interest. Besides, tenants, occupying houses subject to being restituted, as well as other tenants residing in houses belonging to state or public housing funds, have been provided with the possibility of privatising dwelling units they possess.

The representatives of the party concerned have specified that the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” on 11 January 1994 was supplemented with the norm that “residential houses shall be restituted in the case that natural persons, having acquired houses (or portions thereof) subject to being restored, consent to move, of their own free will, into other residential premises allotted to them”. It would not have been necessary to adopt it, if courts had acted in compliance with the provision of Article 1 of the Law, specifying that “this Law shall legislate the procedure and conditions of the restoration of the right of ownership to the citizens of the Republic of Lithuania to the property which was nationalised under the laws of the USSR (Lithuanian SSR), or which was otherwise socialised, and which, on the day of enactment of this Law, is considered the property of the state, of the public, of co-operative organisations (enterprises), or of collective farms”, and it shall not regulate the restoration of ownership rights to the property which is ownership of private persons. It happened so that the former owners, having already acquired houses (or portions thereof) subject to being restituted, found themselves in worse position than the tenants who since the moment they moved over were protected by the provision that they had the option to move of their own free will.

The representatives of the party concerned have stated, that the 11 January 1994 Law expanded the rights of the former owners. They got entitled to the right to receive compensation for the houses they had passed, which had to be paid out within 10 years, also they acquired the right to restoration for ownership the residential houses together with equipment thereof provided that they are on agricultural land subject to being restituted, irrespective of the fact whether these houses along with equipment are considered the property of the state, of the public, of co-operative organizations (enterprises) or whether they are transferred by said organizations and collective farms for the ownership of natural persons.

In the opinion of the representatives of the party concerned, all former property relations are not possible to restore. The changes which have taken place, public interests, as well as social purpose of property ought to be taken into consideration.

Pursuant to the above-mentioned arguments, the representatives of the party concerned requested that the Constitutional Court recognise that Items 3 and 4 of the second paragraph of Article 8 of the Law are in conformity with Article 23 of the Constitution.

The Constitutional Court

holds that:

On 11 March 1990, the Supreme Council of the Republic of Lithuania adopted the Act on the Restoration of the Independent State of Lithuania and thereby proclaimed that the Constitution of any other State had no jurisdiction within it. The Supreme Council by the Law “On the Reinstatement of the 12 May 1938 Lithuanian Constitution”, passed on the same day, annulled “the 20 April 1978 Constitution of Lithuania, the 7 October 1977 USSR Constitution, as well as the fundamentals of legislation of the USSR and Union republics, and other USSR legislation on the territory of the Republic of Lithuania”, suspending those paragraphs and articles governing the status and powers of the President of the Republic, the Seimas, the State Council and the State Supervisory Body. Chapter 8 “National Economy”, containing the regulation of property relations, was not suspended. This meant the restoration of the institute of the right of private ownership.

On 11 March 1990, the Supreme Council approved the Provisional Basic Law of the Republic of Lithuania. In Article 44 thereof it was set forth that the economy of Lithuania shall be based on the property of the Republic of Lithuania, which shall consist of the private property of its citizens, the property of groups of citizens, and state property. Thereby, the continuity of the institute of the right of private ownership, present in former Constitutions of Lithuanian State, was confirmed.

Upon overall nationalisation and alienation of private property in other unlawful manner, carried out by the occupation government, the human natural right to possess private property was denied. The establishment of the institute of the right of private ownership in the Provisional Basic Law meant determination of the state to protect this human right. However, legal relations based on private ownership right, which had been terminated by force, were not reinstated by said legal acts. In the preamble to the Law “On the Provisional Basic Law of the Republic of Lithuania” the Supreme Council stressed the necessity of bringing the provisions into accord “with today’s changing political, economic and other social circumstances”.

While realising the constitutional provision of the continuity of ownership rights, the Supreme Council on 5 November 1990 confirmed the statement that the recognition of the continuity of ownership rights of the citizens of Lithuania is undeniable and formulated its implementation in the following way: “To establish that citizens of Lithuania have the right to restore the property in kind they were entitled to in the scope and procedure established by law, and in the case that there is no possibility of recovering the property in kind, to get compensation for it.” The realisation of said provisions proclaiming limited restitution was determined in the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, adopted on 18 June 1991. The first paragraph of Article 1 thereof prescribes: “This Law shall legislate the procedures and conditions of the right of ownership to the citizens of the Republic of Lithuania to the property which was nationalised under the laws of the USSR (Lithuanian SSR), or which was otherwise unlawfully socialised, and which, on the day of enactment of this Law, is considered the property of the state, of the public, of co-operative organisations (enterprises), or of collective farms”.

Pursuant to this Law, ownership rights shall be restored not for all former owners and not to all the property they possessed. Mass character of violations of ownership rights, committed by the occupation government, new property relations as well as other objective circumstances having stipulated only limited restitution, predetermined the situation when the impaired ownership rights could not be protected under the norms of the Civil Code in force. Therefore, special procedure and conditions for the restoration of the rights of ownership were determined in the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”. The Law guarantees the restoration of ownership rights, and the conditions established thereby are applied only in cases when the former owners desire to recover the property in kind. In the event when there is no possibility of restoring the existing real property in kind for the former owner, due compensation also ensures the restitution of ownership rights (the Constitutional Court’s ruling of 27 May 1994).

It is essential that the conditions set forth in the Law, due to which the property might not be restored in kind, would not contradict the constitutional provisions protecting property. However, taking the fact that the restoration of ownership rights, terminated during occupation period by force, inevitably influence the existing system of social and legal relations, into account, this process must go on bringing into accord the lawful interests of former and present owners of the same property as well as tenants, occupying the houses subject to being restored.

On the compliance of Item 4 of the second paragraph of Item 2 of the Republic of Lithuania’s Law “On Amending the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 12 January 1993, by which Item 2 of Paragraph 2 of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been amended, with the Constitution of the Republic of Lithuania.

The 12 January 1993 Law has amended Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”. The norm of Item 2 of the second paragraph was transferred into Item 4 of the same paragraph (after the amendment of the 11 January 1994 Law, this item became Item 3), which establishes that residential houses (or portions thereof) shall be restituted in the case that “tenants, occupying houses subject to being restituted, consent to move, of their own free will, into residential premises allotted to them”.

Residential houses were nationalised or otherwise unlawfully socialised under the 31 October 1940 Decree of the Presidium of the Supreme Council of the Lithuanian SSR and other governmental acts. Residential houses, which were nationalised or otherwise unlawfully socialised, passed under the factual management of local executive bodies, various state and public organisations. Premises fit for residential use were ascribed to the state or public housing fund and allotted to the residents. Persons, to whom dwelling units were allotted in nationalised or otherwise unlawfully socialised residential houses, utilised these premises pursuant to lease contracts. Therefore, legal evaluation of existing lease relations is significant while resolving issues concerning the restoration of such houses to the former owners.

In civil law a tenant of a dwelling unit is considered a person who concludes a lease contract of a dwelling, and a lessor is the owner of a dwelling or a person managing it on other grounds. One of the rules of the lease contract is that the lessor is not necessarily the owner of the leased property, however, this property must be physically and economically managed by said subject on the bases prescribed by law, and this entitles him the right to influence property in a certain way, for example, to lease it for other persons. The lessor must himself meet the conditions of contract as well as take lawful measures with regard to third parties, whose actions prevent the tenant from using the leasehold (e. g. they declare having ownership rights to the leasehold property).

The transition of ownership rights to another person generally is not a ground for changing or breaking the lease contract of property. In such cases, rights of obligation of the real property leaseholder acquire the characteristics of real rights, thus, providing the tenant with the possibility of preserving and protecting the rights ensuing from the lease contract against the third persons, consequently against the new owner as well. These provisions of civil law safeguarding the rights of tenants confirm that the right of tenants, occupying the houses subject to being restituted to former owners, must be protected. While regulating the restoration of the ownership rights to residential houses, the housing lease relations, which have been formed over decades, must not be ignored, because it was not the tenants but the occupation government who violated the human rights of ownership. Therefore, the tenants must not bear the obligation assumed by the state with regard to the former owners. The rights of such tenants should be protected providing guarantees to acquire other residential premises at the expense of the state, as well as warranting the stability and fair conditions of dwelling lease.

In Item 2 of the second paragraph of Article 8 it was established that the ownership rights to residential houses shall be restored by restituting the houses (or portions thereof) in kind if they do not fall under the category of the houses to be purchased by the State, in the case that tenants, occupying houses subject to being restituted, and which are occupied by more than one family, are familiar with all the laws guaranteeing their rights, and with their option to move, of their own free will, under the conditions proposed by the municipality and set forth in Article 21 of this Law, or under other conditions guaranteed by the former owner of the house. In Item 3 of the Supreme Council Resolution “On the Enforcement and Application of the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 16 July 1991 it was prescribed: “The tenants occupying houses subject to restitution, as defined in Item 2 of the second paragraph of Article 8, shall be informed of their option to move, of their own free will, by settling on a dwelling unit allotted to them, which complies with requirements set forth in Article 94 of the Housing Code of the Republic of Lithuania”. In this Article it was established that in cases that citizens are made to move, another suitably equipped and equivalent in size dwelling unit must be allotted to them, which would meet the requirements determined in Articles 42 and 43 of the Housing Code, i.e. must be equipped according to the conditions of locality and comply with sanitary-technical requirements, etc.

After the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, when it was established that residential houses (or portions thereof) shall be restituted in kind when tenants consent to move, of their own free will, into other residential premises allotted to them had been amended on 12 January 1993, the previous condition (familiarising the tenants with their option to move, of their own free will, under the conditions proposed by the municipality and set forth in Article 21 of this Law, or under other conditions guaranteed by the former owner of the house) was changed by the tenants’ consent to move, of their own free will, by settling on a dwelling unit allotted to them. Under this norm of the Law, the tenant’s refusal to move into other residential premises, irrespective of the character and motives thereof, may not be called in question.

In the law of obligation, upon alteration of important circumstances, terms of the contract may be changed in the cases and procedure prescribed by law without the will of the party to the contract. Therefore, the necessity to restore the ownership rights, terminated by the occupation government, justifies changes in housing lease relations. In cases when restoring the ownership rights of former owners to residential houses, tenants occupying these houses are allotted other dwelling units, which comply with the requirements prescribed by law, it is considered a sufficient measure employed to protect the tenants’ rights. The condition that, in cases when the tenants do not agree to change the lease contract, residential houses shall not be restituted, set forth in the January 1993 Law, is not in conformity with the provisions of property protection established in Article 23 of the Constitution.

It should be noted, that the persons whose ownership rights to residential houses are subject to restoration had the possibility of restoring the houses in kind under different conditions (after the amendment of the Law they had to face harder requirements than in the first period of its validity). However, new requirements may not be applied to the existing legal relations with the same contents, as it would mean a violation of a person’s equality before the law. Therefore, the amendment of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” is flawed in this respect too.

On the compliance of Subitem 4 of Item 2 of the Republic of Lithuania’s Law “On Amending and Supplementing the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994, by which the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been supplemented with Item 4, with the Constitution of the Republic of Lithuania.

The Seimas by the 11 January 1994 Law has supplemented Item 1 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” with the provision that this Law shall also legislate the restoration of ownership rights to the existing real property which was nationalised or otherwise unlawfully socialised, and which was given over for the ownership of natural persons by the state, public, co-operative organisations (enterprises) or collective farms. Thereby, it was established the right for the former owners to restore ownership rights to residential houses (or portion thereof), given over by said organisations for the ownership of natural persons, i.e. to restore the houses in kind or receive due compensation.

The Seimas, by the 11 January 1994 Law has also supplemented the second paragraph of Article 8 of the Law with Item 4 which establishes that “natural persons, having acquired for ownership houses (or portions thereof) subject to being restituted, consent to move, of their own free will, by settling on a dwelling unit allotted to them”.

Property relations, like other civil legal relations, appear, change and end upon the occurrence of certain juridical facts. Juridical facts, that serve as causes for emergence of property relations, are generally as follows: the production of a new thing by manufacturing or some other activity, acquisition of property on contracts, obtaining results and gaining profit. In Item 4 of the second paragraph of Article 8 of the Law mention is made of persons, to whom residential houses have been transferred by the state, public, co-operative organisations (enterprises) or collective farms. The right of transferral of property to other persons (to dispose of property) is given to the former owner or authorised by him persons. However, lawful state property could not and did not appear on the basis of overall nationalisation carried out by the occupation government and other arbitrary acts. The property taken from people in such a way, may be considered as property which is only factually managed by the state (the Constitutional Court’s ruling of 27 May 1994). As neither the state nor legal persons, who at that time factually managed the alienated property, did not own that property, they, from the present perspective, could not dispose of that property. However, pursuant to the Soviet normative acts, which were in force at that time, and the procedure prescribed thereby, the state, public and co-operative organisations (enterprises) or collective farms could transfer to natural persons residential houses (or portions thereof), which were factually managed by them. In accordance with the Resolution of the Council of Ministers of the Lithuanian SSR and the Council of Trade Unions of the Lithuanian Republic “On the Sale for Citizens’ Private Ownership of Dwelling Units and Houses Belonging to the State and the Public Housing Fund” of 13 March 1989, tenants were provided with the possibility of purchasing not only residential houses (or portions thereof) which had been nationalised or otherwise unlawfully socialised, but also apartments in such houses.

Natural persons, while acquiring residential houses (or portions thereof) on the contract, conformed to the rules of conclusion of contracts established by normative acts that were in force at that time, performed obligations of the party ensuing from such contracts. Upon denial of ownership rights which appeared on the basis of lawful contracts, the contents of existing legal relations would be changed. Therefore, while restoring the ownership rights to residential houses transferred for natural persons by the state, public and co-operative organisations (enterprises) or collective farms, the rights of natural persons, who have acquired such property, should be protected along with the rights of the former owners.

The former owner’s subjective rights are restored only upon the recovery of property or paying out of due compensation. The Law, however, entitles such a person to the right to bring an action to the court asking to resolve in civil procedure his or her request pertaining to the restoration of the residential house (or a portion thereof), which has been transferred for the ownership of natural persons. An obligatory court investigation into the issue concerning the restoration of the house in kind, conducted upon such an action, confirms the provision of the Law that, while restoring the ownership rights to the existing real property, the priority is given to the restitution of property in kind. However, it would not be fair to seize the residential house (or a portion thereof) against the will of a natural person who has acquired it on the contract, without violation of normative acts that were in effect at the time of acquisition, and which is under the management and disposition of this natural person, and to restitute it to the former owner. While defending the rights of the former owner, the rights of the present owner may not be denied in non-dispute procedure. In case that there is no possibility of the restitution of the residential house (or a portion thereof) for the former owner without the consent of the present one, the ownership rights, pursuant to the Law, may be restored to him in other manner. Fair compensation also ensures the restitution of ownership rights. Thus, there is no ground for maintaining, that the norm of Item 4 of the second paragraph of Article 8 of the Law contradicts the provisions of the protection of property established in Article 23 of the Constitution.

The above-mentioned arguments of the Constitutional Court are related to the ownership rights to residential houses (or portions thereof), which had been acquired by natural persons on the contracts prior to the enforcement of the Law on Privatisation of Dwelling, i.e. before 30 June 1991. In Article 3 of this Law it is determined that, according to this Law, residential houses or dwelling units, which have been seized, confiscated or nationalised by administrative acts or in other manner from those citizens of Lithuania who are entitled to the restoration of ownership rights under Article 2 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, shall not be sold. On 9 December 1993, the Law on Privatisation of Dwelling was supplemented with the provision that residential houses and dwelling units may be sold provided that the owner consents to receive compensation for the house subject to being restituted on the decision of city or district board. Therefore, after the enforcement of the Law on Privatisation of Dwelling, the sale of residential houses or dwelling units, disregarding the prohibition specified therein or violating the conditions determined in the supplement of 9 December 1993 to this Law, may not be considered lawful. However, in such cases it is not the contents of norms of the Law but the application thereof, which causes “unlawfulness”. Disputes pertaining to the acquisition of residential houses (or portion thereof) and apartments are investigated in civil procedure.

Conforming to Article 102 of the Constitution of the Republic of Lithuania as well as Articles 53, 54, 55 and 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:

  1. To recognise that Item 4 of the second paragraph of Item 2 of the Republic of Lithuania’s Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 12 January 1993, by which Item 2 of the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been amended, contradicts Article 23 of the Constitution of the Republic of Lithuania.
  2. To recognise that Subitem 4 of Item 2 of the Republic of Lithuania’s Law “On Amending and Supplementing the Republic of Lithuania’s Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 11 January 1994, by which the second paragraph of Article 8 of the Law “On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” of 18 June 1991 has been supplemented with Item 4, is in compliance with the Constitution of the Republic of Lithuania.

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         Stasys Stačiokas

Teodora Staugaitienė                       Stasys Šedbaras                               Juozas Žilys