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

Case No. 9/95

 THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA

 R U L I N G

On the compliance of Item 4 of Paragraph 2 of Article 8 and the norm of Paragraph 4 of the same article 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 Constitution of the Republic of Lithuania

22 December 1995, Vilnius

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

The court reporter—Daiva Pitrėnaitė

Seimas members Andrius Kubilius and Vidmantas Žiemelis, acting as the representatives of a group of members of the Seimas of the Republic of Lithuania, the petitioner

Alfonsas Vileita, the adviser of the Seimas Committee of State and Law, acting as the representative 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 Paragraph 1 of Article 1 of the Law on Constitutional Court of the Republic of Lithuania, in its public hearing, on 14 December 1995, considered case No. 9/95 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 Article 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 3 July 1995 in which 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” of 18 June 1991 has been set forth anew, is in compliance with Articles 23 and 29 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

I

A group of the Seimas members, the petitioner, requests an investigation into whether Article 2 of 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’” of 3 July 1995 (Official Gazette Valstybės žinios, 1995, No. 59-1465), in which 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 (hereinafter referred to as the Law) has been set forth anew, is in compliance with Articles 23 and 29 of the Constitution.

In his request the petitioner indicates that the Supreme Council of the Republic of Lithuania in Article 14 of the passed Law enumerated conditions, under which residential houses shall not be returned, they shall be purchased by compensating the owner with equivalent kind. The list of the provided conditions is exhaustive and final. In all other cases Article 8 of the Law provides the former owners with the freedom of choice, i.e. they may recover a residential house or they may decide not to recover it and be compensated with equivalent kind. The Supreme Council, having passed the decision to restore the ownership rights to the former owners of residential houses, in the aforesaid Law consolidated the right guaranties for tenants who reside in houses subject to restoration. The guaranties are provided by Article 21 of the Law, in accordance to which a tenant, who pays rent which does not exceed the amount established by the Government, might not be evicted from the residential house which had been returned to the former owner, if the guaranties for the tenants provided in the aforesaid Article had not been secured. According to the programme, prepared and carried out by the Government, municipalities had to provide persons who resided in residential houses subject to being returned with a dwelling place or, if a person so requested, to allocate, free of charge, a plot of land for the construction of a house and credits on easy terms for the aforesaid construction. The aforementioned provisions of the Law had been followed until the election of the Seimas. A part of the former owners recovered residential houses without violating tenant rights.

On 12 January 1993, the Seimas passed 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’”, in which Article 8 of the Law was set forth anew. It was provided in Item 4 of this Article that the procedure and time limits for the restoration of residential houses shall be established by the Government pursuant to the provision that the residential houses shall be returned in the case that the tenants who occupy houses subject to being returned consent to move into the allotted other dwelling place of their own free will. The Constitutional Court in its 15 June 1994 Ruling held that according to this norm the manner of restoration of the ownership rights to a residential house (or a portion thereof) is determined by the subjective factor—the consent or refusal of tenants to move into the allotted dwelling place—which is established by the Law, and not by objective circumstances. The Constitutional Court passed the ruling that the aforementioned amendment of the Law contradicts Article 23 of the Constitution. In addition, the Constitutional Court noted that “persons to whom ownership rights to residential houses are being restored, had the possibility of restoring the actual houses under different conditions (after the amendment of the Law they had to face bigger 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 violation of person’s equality before law”.

The petitioner indicates that after the Constitutional Court had passed its 15 June 1994 ruling, on 3 July 1995, the Seimas amended the Law once again and in Paragraph 2 of Article 8 of the Law determined a supplementary condition. It burdens former owners or altogether puts a stop to recovering residential houses. Item 4 of Paragraph 2 of Article 8 of the Law has been set forth anew as follows:

“Residential houses (or portions thereof), apartments shall be returned in kind in the case that:

<...> 4) the tenants who occupy houses (or portions thereof), apartments subject to being returned are provided with a dwelling place conforming to the requirements of Article 358 of the Civil Code of the Republic of Lithuania.”

The essence of the aforesaid amendment is that returning of illegally disseized property depends on providing the tenants with some other dwelling place. The aforementioned amendment of the Law signifies that illegally disseized property shall not be returned.

The Constitutional Court in its 15 June 1994 ruling noted that new requirements may not be applied to the existing legal relations with the same contents, as it would mean violation of person’s equality before law. Having adopted the aforesaid amendment of the Law, the Seimas violated this equality, as certain persons have restored residential houses, whereas now some other persons have to face bigger requirements. In the opinion of the petitioner, recovering residential houses becomes dependent on individual municipalities. If a municipality is able to allot tenants who occupy residential houses subject to being returned some other dwelling place, then the aforesaid houses will be returned, but if some other municipality has no such possibilities, residential houses may not be returned in kind. Hereby it is confirmed by the Seimas, which set forth Paragraph 4 of Article 8 of the Law as follows: “In all other cases, not specified in Paragraph 2 of this Article, the ownership right to residential houses (or portions thereof), to apartments shall be restored by means of purchasing them <...>”. This norm restricts the freedom of choice of the former owners that was established in the Law prior to its amendment and supplement. The purchase, and, later on, the privatisation will signify that a tenant becomes a new owner (and that cannot be treated as “public needs”), but first of all the true owner is being deprived of his property. Therefore, the aforesaid amendments of the Law violate the principle of inviolability of property, as well as the equality of rights of citizens which are protected by the Constitution.

II

Replying the Constitutional Court paper to the party concerned, when the case was being prepared for the Court hearing, Pranciškus Vitkevičius, the Chairman of the Seimas Committee of State and Law, explained in writing that the Constitutional Court had investigated the compliance of the supplement and amendment of individual Articles or norms of the Law with Article 23 of the Constitution many a time. Taking into consideration all historical and social circumstances, in the rulings of the Constitutional Court the main provisions of the continuity of private ownership rights and the restoration of them were formulated. One of the most important provisions is that the Supreme Council of the Republic of Lithuania by the Law “On the Reinstatement of the 12 May 1938 Constitution of Lithuania” of 11 March 1990 renewed the validity of the Constitution of Lithuania of 1938 within the entire territory of Lithuania, suspended the validity of the Articles regulating the state governing, retained to be in force Chapter 8 “National Economy”, and thereby it signified the restitution of the institute of the right of private ownership and in fact its continuity. In its ruling of 27 May 1994, the Constitutional Court noted that “it is impossible to impartially reconstruct the complete former system of property relations which existed in Lithuania in 1940”. In its ruling of 8 March 1995, the Constitutional Court held that “One of the main objectives of law as a means of regulation of social life is justice. It is impossible to attain justice by satisfying interests of only one group or one person and by denying interests of others. While behaving one-sidedly, the humane purpose of law would be disregarded and the probability of social conflicts would increase”. When solving the ownership right restoration problems, one should pursue the provision of the preamble of the Constitution which states that the Lithuanian nation strives for “an open, just, and harmonious civil society and State under the rule of law”.

The initial norm of Item 2 of Paragraph 2 of Article 8 that residential houses shall be returned in the case that “tenants, occupying houses subject to being returned, and which are occupied by more than one family, are familiar with all of 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”, was not concrete. It satisfied neither house owners, nor the tenants who resided in the houses subject to being returned. The House Owner Associations claim that the tenants who reside in houses belonging to former owners should be evicted unconditionally and without delay, as former owners desire to freely possess, use and dispose of their property. But presently the state is not economically capable during a short period of time to provide all the tenants who reside in houses subject to being returned with a dwelling place.

The chairman of the committee points out that the tenants who have rallied the Society of the Homeless, are not satisfied with being “familiar with all of the laws guaranteeing rights”, as the owners, having recovered their houses, take measures (among them illegal ones as well) to evict tenants. Hence conflict situations arise. The provision of Article 8 of the impugned Law is more accurate, there is no vagueness of the previous norm:

“Residential houses (or portions thereof), apartments shall be returned in kind in the case that:

<...> 4) the tenants who live in houses (or portions thereof), apartments subject to being returned are provided with a dwelling place conforming to the requirements of Article 356 of the Civil Code of the Republic of Lithuania.”

The aforementioned norm has established that houses (or portions thereof) shall be returned to the owners by providing the tenants with some other dwelling place, into which they may be moved by legal procedures, and not “of their own free will”, as it had been established by the initial norm.

In the paper it is noted that the Constitutional Court indicated in its previous rulings that “the provision that, providing there is no possibility of restoring property in kind, it must be adequately compensated for, does not contradict the principles of inviolability of property and protection of property ownership rights, because fair compensation also ensures restoration of property ownership rights”. Under such circumstances, the new wording of Article 8 of the Law does not contradict Article 23 of the Constitution.

According to the Chairman of the Committee, the argument of a group of the Seimas members that “new requirements may not be applied to the existing legal relations with the same contents, as it would mean violation of person’s equality before law”, cannot serve as the basis to recognise that the legal norms under investigation contradict Articles 23 and 29 of the Constitution for as long as the ownership rights have not been restored, persons, claiming the restoration of the aforesaid rights, are not the owners. If some of its shortcomings come to light when implementing a law, or there appear some changes in economy, the legislature may change legal norms to the interests of society, thereby hardening the conditions of some groups of persons and facilitating those of other groups of persons. Otherwise there would be no progress in regulations of existing legal relations. However, newly adopted legal norms do not possess retroactive validity. Item 4 of Paragraph 2 and Paragraph 4 of Article 8 of the Law are in compliance with Article 29 of the Constitution as they do not violate the provisions of equality of persons: the owners, as well as the tenants, are treated equally, disregarding their sex, race, nationality, origin, social status, religion, convictions, or options.

III

In the process of judicial investigation Andrius Kubilius and Vidmantas Žiemelis, the representatives of the petitioner, confirmed the arguments set forth in the request of a group of the Seimas members. They have also indicated that when passing the law on the restoration of the rights of ownership, the priority was given to restore property in kind. The initial wording of the Law provided for the possibility of returning houses in kind, whereas after the 3 July 1995 amendment of the Law had been adopted, to do it became impossible.

The Law passed on 18 June 1991, as well as the Resolution of the Government of the Republic of Lithuania (No. 470) “On the Implementation of the Law ‘On the Procedure and Conditions of the Restoration of the Rights of Ownership of Citizens to the Existing Real Property’” of 15 November 1991 and the Government Resolution (No. 805) “On Programmes to Provide Tenants Who Live in Houses Subject to Being Returned to Former Owners with Apartments” of 27 October 1992, established a system which reconciled both the interests of former owners and of the tenants who live in the houses subject to being returned. That programme was being carried out successfully. The aforesaid government resolutions have been valid up to the present, they have not been abrogated, nevertheless the Government is not carrying them into effect, and the budget does not provide finance for the programme. The present impugned wording of Item 4 of Paragraph 2 of Article 8 of the Law hardens returning residential houses in kind.

The restoration of the ownership rights thus becomes dependent on an individual municipality and its economic capacity. According to Article 19 of the Law, a municipality shall pass the decision concerning the returning of property in three months’ time. It cannot pass decision to return property in kind, as at first it has to provide a tenant with a dwelling place. Alongside, the part of the programme which was provided in government resolution No. 805 of 27 October 1992 to supply tenants who live in houses subject to being returned with apartments that the tenants shall be provided with apartments in ten years’ time, is no longer being carried into effect.

In the opinion of the representatives of the petitioner, the new amendment of Article 8 contradicts Article 23 of the Constitution. They have also pointed out that many former owners have been restored the ownership rights to houses pursuant to the initial wording of the Law, they receive rent, whereas the conditions of other former owners, after the Seimas had amended the Law on 3 July 1995, became graver. Thus, the principle of the equality of persons before the law, granted in Article 29 of the Constitution, is violated.

IV

Alfonsas Vileita, a representative of the party concerned, in the process of judicial investigation explained that during the last 50 years complex socio-economic relations have arisen, which must be taken into account. There is no precise decision of how to return residential houses, therefore, while adopting normative acts it is necessary to endeavour to co-ordinate the interests of all groups of society, as well as to consider public needs.

There exist two groups of persons concerned: former owners and tenants who live in houses subject to being returned. The initial wording of the Law did not provide the co-ordination of interests of the aforesaid groups. The former owners are dissatisfied with Article 21 of the Law which provides guaranties for the tenants and limits the ownership right of the owner to freely dispose of their property. They are dissatisfied with the rent rate amount which was established by the state as well. On the other hand, the tenants would become like the homeless. Besides, there was a situation when the tenants were not able to get apartments in new houses. It is difficult for the state to co-ordinate the interests of the aforesaid groups. If the conditions of one group of persons are getting better, when coordinating the interests, consequently the conditions of the other group is getting graver.

The Constitutional Court has held that until the ownership right is not restored, persons, claiming houses and apartments, shall not be considered as owners, whereas Article 23 of the Constitution in all its extent protects only the rights of the owner. Initially the Law had no provision that property shall be unconditionally returned in kind. The Law established that whenever the property is not being returned in kind, the former owners shall be able to choose the manner of compensation, which ensures restoration of the ownership rights as well, provided by the Law. The Constitutional Court has held so. When assessing the Law, two problems arise: that of conformity of the amendments with the Constitution and that of the quality of the Law. The Constitutional Court does not solve the Law quality problems, as it is the competence of the Seimas. In the opinion of the representative of the party concerned, the 3 July 1995 amendment of the Law is in compliance with Article 23 of the Constitution.

The representative of the party concerned maintained that the aforesaid amendment of the Law is in compliance with Article 29 of the Constitution. This Article provides that all persons shall be equal before the law disregarding their sex, race, nationality, origin, social status, religion, convictions, or options. Former owners, as well as tenants, are treated equally on that basis. The argument of the petitioner that a person’s equality before the law is violated, as the initial wording of the Law was applied to one group of persons, whereas the Law establishing stricter prescriptions will be applied to some other persons, is groundless. In the opinion of the party concerned, when adopting normative acts, the interests of certain groups of society are being co-ordinated. In the process of enacting the law passed, some of its merits and negativities come to the fore. Social relations having changed, the legislature may change legal norms, otherwise it would be impossible to regulate them and there would be total legal stagnation. The restoration of property relations are continuous, therefore, they may be regulated, the only principle being that newly adopted legal norms have no retroactive validity.

In the initial wording of Article 8, the concept of “free will” signified a total impossibility of evicting tenants in a legal form. If compared to the initial wording, now the possibilities of former owners to restore the ownership rights are not being diminished. After a tenant is provided with some other dwelling place, conforming to the requirements of Article 358 of the Civil Code, the property shall be returned to the former owner, and the tenant may be evicted in legal form.

If the residential houses were returned together with the tenants who live in the houses subject to being returned, there would emerge the problem of compliance of Article 21 of the Law with Article 23 of the Constitution. The question would also arise, if the state is competent to establish the amount of rent rate and limit the right of the owner to use and dispose of his property.

On the grounds of the aforementioned arguments, the representative of the party concerned requested that the Constitutional Court not grant the request of the petitioner.

The Constitutional Court

holds that:

The Seimas in Article 2 of 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’” of 3 July 1995 set forth anew Article 8 of the Law under amendment. The Seimas in Item 4 of Paragraph 2 of the aforesaid Article established that residential houses (or portions thereof), apartments shall be returned in kind in the case that “tenants who occupy houses subject to being returned, are provided with a dwelling place conforming to the requirements of Article 358 of the Civil Code of the Republic of Lithuania”. It was established in Paragraph 4 of the aforesaid Article that “in all other cases, not specified in Paragraph 2 of this Article, the ownership rights to residential houses (or portions thereof), to apartments shall be restored by means of purchasing them from the persons specified in Article 2 of this Law on the basis of the option of the aforesaid persons <...>”.

The petitioner requests that the Constitutional Court recognise that the aforementioned norms of the Law contradict Articles 23 and 29 of the Constitution.

  1. Upon the nationalisation and socialisation in other unlawful manner of land, banks, heavy industry, other property, including residential houses, carried out by the occupation government, the human natural rights to possess private property was denied. The property taken over illegally from people did not become state property and it may be considered as property which is only factually managed by the state.

The restoration of the institute of the right of private ownership signified the provision of the restored Lithuanian state to protect person’s violated private ownership rights. It was impossible to impartially reconstruct the complete former system of property relations, as it was necessary to take into consideration socio-economic and other social relations, which had changed.

The obstacle in restoring the ownership rights by returning residential houses to former owners in kind was that the dwelling place of nationalised or socialised in other unlawful manner houses was allotted to other persons who used it on lease. The lessor of dwelling places was the occupation government, as it physically and economically disposed of houses, nationalised and socialised in other unlawful manner. The aforementioned dwelling places were included into state housing fund, which later on was increased by constructing other residential houses and by other manner. The dwelling places of the aforesaid fund were rented out for residents with neither limiting the time period of rental relations, nor setting any obligations in respect to the former owners. It should be noted that then there existed a situation when a person could not freely choose the dwelling place being allotted. Having refused of the dwelling place being allotted, the person, as a rule, would lose a possibility of getting another dwelling place. The right to construct for oneself a residential house, as well as the right to get a dwelling place from a being created state, public, or residential house construction cooperatives’ housing fund, was limited. Though there existed no private ownership, people, however, were allowed to make transactions, and to exchange dwelling places among them. Thereby, a person could become a tenant of a house (or a portion thereof), or of an apartment nationalised or socialised in other unlawful manner. Thus, it was occupation government which violated the rights of former owners, and not the tenants, therefore, a tenant cannot have any obligations in respect to the former owners. The Lithuanian state, having restored the institute of the right of private ownership, committed under established conditions and procedure to restore the rights of ownership to the existing residential houses.

One of the main objectives of law as a means of regulation of social life is justice. Justice is one of basic moral values, as well as one of the basic foundations of a state under the rule of law. The aspiration for justice and a state under the rule of law is established in the preamble of the Constitution. Justice may be implemented by ensuring a certain equilibrium of interests, by escaping fortuity and arbitrariness, the instability of social life and conflict of interests. It is impossible to attain justice by recognising the interests of only one group or one person and by denying the interests of others at the same time. It is impossible to solve clashes of interests by making absolute the protection of the rights of a person who attempts to restore the rights of ownership to a residential house by recovering it in kind, and at the same time denying the right of tenants to possess a dwelling place.

The legislature chose the protection of the ownership rights by returning the house in kind, ensuring at the same time the tenant right to a dwelling place. The aforesaid co-ordination of rights was established in Item 2 of Paragraph 2 of Article 8 of the Law. In it was established that the ownership rights to residential houses (or portions thereof) shall be restored in kind, providing the aforementioned houses are not subject to being purchased by the state, in the case that tenants, occupying houses subject to being returned, and which are occupied by more than one family, are familiar with all of 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. In Item 3 of its Resolution “On the Procedure and Conditions of the Entry into Force 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, the Supreme Council consolidated the following: “To establish that tenants who occupy houses subject to being returned are familiar with their option to move only in the case that a concrete dwelling place which is being allotted and which is in conformity with the prescriptions of Article 94 of the Code of Apartments of the Republic of Lithuania shall be indicated”. It was established in Article 94 of the Code of Apartments that when citizens are being evicted, the other properly furnished dwelling place allotted to them shall be in conformity with the prescriptions of Articles 42 and 43 of the Code of Apartments, and the allotted dwelling place shall be no less than that possessed by a person who is being evicted, etc. Similar standards for some other proper dwelling place which is being allotted are prescribed in Article 358 of the Civil Code. Thus, from the very first day of its coming into force the Law, when returning residential houses to former owners, has ensured the rights of tenants providing that tenants shall be allotted some other properly furnished dwelling place.

The right of tenants who reside in houses subject to being returned to former owners to provide themselves with some other dwelling place is established in Item 1 of Paragraph 2 of Article 6 and in Item 2 of Paragraph 1 of Article 9 of the Law “On Enabling the Population of the Republic of Lithuania in Providing Themselves with Dwelling Places” that was adopted on 9 April 1992, as well as in Article 356 of the Civil Code that was supplemented on 17 May 1994.

If a former owner requests the restoration of a house (or a portion thereof), or an apartment in kind, the legal condition of the tenant shall remain intact, however, the tenant is not entitled to privatise of the aforesaid dwelling place. The lease with the tenant may be forfeited and he may be evicted in the case that the condition of Item 4 of Paragraph 2 of Article 8 of the Law is met, i.e. he is allotted a corresponding dwelling place. Thus, a former owner may restore a residential house when the condition prescribed in the Law is met. Whenever it is not met or the property is not correspondingly compensated for, the subject rights of a former owner have not yet been restored. It signifies that only the restored ownership rights are protected by every legal manner. The aforementioned ownership right protection is established in Article 23 of the Constitution.

When restoring the ownership rights to residential houses (or portions thereof), or apartments, there exist a variety of possible manners to co-ordinate the protection of the rights of former owners and the rights of tenants. The condition of the restoration of ownership rights, prescribed in Item 4 of Paragraph 2 of Article 8 of the Law, provides that some other dwelling place shall be allotted conforming with the prescriptions of Article 358 of the Civil Code. The aforesaid condition is bound with circumstances which neither depend on the tenant, nor on his subjective will. The allotment of some other dwelling place to tenants is the problem of law enforcement, the economic capacity of the state and that of the possibilities of the owners. In order to solve this problem, as well as that of relations between former owners and tenants who occupy the houses of the former, the Government must prepare corresponding programmes (Paragraph 5 of Article 21 of the Law, Article 14 of the Law “On Enabling the Population of the Republic of Lithuania in Providing Themselves with Dwelling Places”). The implementation of programmes is an economic problem. This problem finds its solution in the course of discussing, adopting and executing the budget.

The statement in the request of the group of the Seimas members that after the Constitutional Court had promulgated its 15 June 1994 ruling, the condition of Item 2 of Paragraph 2 of Article 8 of the Law, providing that tenants are familiar with real opportunity at 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 remained in force, cannot be considered as a grounded one. The Seimas by its 12 January 1993 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” substituted the aforesaid provision of Article 8 with another provision: “in case that the tenants who occupy houses subject to being returned consent to move into the other allotted dwelling place of their own free will”, therefore, Item 2 of Paragraph 2 of Article 8 of the initial wording of the Law became null and void. After the Constitutional Court had acknowledged in its 15 June 1994 ruling that the provision of the 12 January 1993 law contradicts Article 23 of the Constitution, the aforesaid provision could not be applied (Paragraph 1 of Article 107 of the Constitution), therefore, a gap in the Law appeared. The elimination of the gap is a prerogative of the state authority institution that has passed the legal norm.

The petitioner points out that the Constitutional Court in its 15 June 1994 ruling noted that new requirements may not be applied to the existing legal relations with the same contents, as it would mean violation of persons’ equality before law. The petitioner maintains that the Seimas violated the aforesaid equality, as certain persons have restored residential houses, whereas after adoption of the discussed amendment of the Law, persons who have the ownership right to residential houses, and who have not restored their property, got into a graver situation, because different and bigger requirements are applied to them.

The aforementioned arguments of the petitioner are not grounded. As it was mentioned, pursuant to Item 2 of Paragraph 2 of Article 8 of the initial wording of the Law and Item 3 of the Supreme Council 16 July 1991 Resolution regarding the process of 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” one of essential conditions in restoring the right of ownership by returning residential houses (or portions thereof) in kind was established, i.e. that tenants who reside in houses subject to being returned shall be provided with a properly furnished dwelling place. The very same condition is provided in Item 4 of Paragraph 2 of Article 8 of the Law, and which the petitioner calls in question. Therefore, the argument that bigger requirements are applied to former owners of residential houses than before is not a grounded one.

Taking into account the aforesaid arguments, the conclusion may be drawn that Item 4 of Paragraph 2 of Article 8 of the Law is in compliance with the Constitution.

  1. The Law regulates the restoration of the ownership rights to the existing real property. Pursuant to the Law, ownership rights shall be restored not for all former owners, and not to all formerly owned property. The Law contains special conditions or, to be more precise, limitations which are applied to former owners who wish to restore their property in kind. It is evident that certain conditions are established which limit the restoration of the ownership rights, as the system of socio-economic relations which has been formed during the last 50 years exerts influence upon this process. In the case when it is impossible to return property in kind, the former owner may choose another manner of compensation which is provided in the Law. The Constitutional Court has noted several times that the provision that, providing there is no possibility of restoring property in kind, it must be adequately compensated for, does not contradict the principle of protection of property ownership rights as well, because fair compensation also ensures restoration of property ownership rights (the Constitutional Court’s rulings of 27 May 1994, 15 June 1994, 19 October 1994, and 8 March 1995).

The manner of compensation in the case that residential houses shall not be returned in kind is prescribed in Paragraph 4 of Article 8 of the Law. The restoration of the ownership rights by compensating for existing real property in the case that it is impossible to return it in kind is warranted as well, therefore, the conclusion may be drawn that Paragraph 4 of Article 8 of the Law is in compliance with the Constitution.

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:

To recognise that Item 4 of Paragraph 2 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”, as well as the norm of Paragraph 4 of the aforesaid Article “In all other cases, not specified in Paragraph 2 of this Article, the ownership right to residential houses (or portions thereof), to apartments shall be restored by purchasing them from the persons specified in Article 2 of this law on the basis of the option of the aforesaid persons <...>” are 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 Šedbaras

Juozas Žilys