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On the privatisation of residential premises

Case No. 1/95

 THE CONSTITUTIONAL COURT OF
THE REPUBLIC OF LITHUANIA

 R U L I N G

 On the compliance of the part of the Resolution of the Government of the Republic of Lithuania (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, by which the building, situated at the address: Vydūno str. No. 17, Vilnius, is included into the list of the buildings which are not subject to privatisation, with the Constitution of the Republic of Lithuania, as well as with Paragraph 1 of Article 2 and with Articles 3 and 4 of the Republic of Lithuania’s Law on the Privatisation of Apartments

 16 May 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 Stačiokas, Teodora Staugaitienė, Stasys Šedbaras and Juozas Žilys

The court reporter—Rolanda Stimbirytė

Vitoldas Kumpa, Head of the Legal Division of the Secretary Office of the Government and Juozas Cibulskas, Legal Adviser of the Public Utilities Enterprise of the Secretary Office of the Government, acting as the representatives of the Government, 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 the Constitutional Court of the Republic of Lithuania, in its public hearing, on 3 May 1995, considered case No. 1/95 subsequent to the petition submitted to the Court by the 2nd Vilnius Local Court requesting an investigation into whether the part of the Government Resolution (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, by which the building, situated at the address Vydūno str. 17, Vilnius, is included into the list of the buildings which are not subject to privatisation, is in compliance with the Constitution of the Republic of Lithuania, as well as with Paragraph 1 of Article 2 and with Articles 3 and 4 of the Republic of Lithuania’s Law on the Privatisation of Apartments.

The Constitutional Court

has established:

On 26 January 1995, the 2nd Vilnius Local Court, the petitioner, considered the civil case according to the action brought in by the plaintiffs A. Ažubalis, J. Balnys, R. Jakubėnienė, E. Jurgaitis, A. Petrauskas, A. Poškus, K. Šimkūnas and K. Valuckas against the respondent—the Public Utilities Enterprise of the Secretary Office of the Government, concerning the renewing of the term of putting in an application for privatisation of residential premises and the obligation to conclude the sale and purchase agreement concerning the premises, situated at the address Vydūno str. 17, Vilnius, which are leased by them. The court passed the ruling to suspend the consideration of the case and applied to the Constitutional Court requesting an investigation into whether the part of the Government Resolution (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, (Official Gazette Valstybės žinios, 1993, No. 74 (59)-1393; hereinafter in the ruling referred to as the impugned ruling of the Government) by which the building, situated at the address Vydūno str. 17, Vilnius, is included into the list of the buildings not subject to privatisation is in compliance with Paragraph 1 of Article 2 and with Articles 3 and 4 of the Law on the Privatisation of Apartments, as well as Item 2 of Article 94 of the Constitution.

The petitioner points out in the request that said building was registered as a hostel according to government act No. 161p of 13 February 1992. Conforming to Item 3 of Article 7 of the Republic of Lithuania’s Law on the Initial Privatisation of State Property, by the impugned resolution of the Government the residential house, situated at the address Vydūno str. 17, Vilnius, is included into the list of the buildings which are not subject to privatisation. Since the order of privatisation of residential premises is established by the Law on the Privatisation of Apartments, the petitioner thinks that the impugned resolution, by which the building is included into the list of the buildings which are not subject to privatisation, contradicts Paragraph 1 of Article 2, as well as Articles 3 and 4 of this Law.

The petitioner also points out that it is doubtful if said resolution does not contradict Item 2 of Article 94 of the Constitution in which it is established that the Government implements laws, since in the case under consideration the Law on the Privatisation of Apartments is to be applied and not the Law on the Initial Privatisation of State Property. By the impugned resolution of the Government, the plaintiffs, living in the premises allotted to them in Vydūno str., are deprived of the right and possibility, pursuant to the Law on the Privatisation of Apartments, to purchase the premises in dispute.

II

In the process of the preparation of the case for the hearing of the Constitutional Court and in the court hearing the representatives of the party concerned have explained that the Public Utilities Enterprise of the Secretary Office of the Government is an enterprise of a specific purpose which main activity is to lease and maintain residential and non-residential premises, to repair them and carry out other services under the request of its founders. In order to implement these purposes the Government has transferred to said enterprise a certain number of buildings, among them residential houses as well.

Seeking to improve the service of the accommodation of foreign experts as well as to make it cheaper, as Lithuanian state institutions pay for the accommodation of some experts, the Government, by its act No. 161p of 13 February 1992, commissioned the Vilnius City Council to transfer the house of 36 apartments, situated at the address Vydūno str. 17, Vilnius, into the balance of “Tekta” state enterprise. Conforming to Article 365 of the Civil Code this house was registered as a hostel. By act No. 575p of 8 June 1992, “Tekta” enterprise of a specific purpose was reorganised and called the Public Utilities Enterprise of a specific purpose of the Governmental Staff (now the Secretary Office). According to the affirmation of the party concerned, this house is of special purpose, purchased on state assets and meant for temporary accommodation. All residential houses and hostels, pursuant to the Law on the Privatisation of Apartments, till 1992 were already transferred into a balance of a municipality or were privatised. The impugned building was acquired from the municipality for realisation of the purposes of the enterprise. The building is acquired after privatisation has been finished, and it constitutes the authorised capital of the enterprise, therefore, it may not be privatised separately. It is not planned to privatise the entire enterprise either.

The representatives of the party concerned have pointed out that former owners have put in their claims to their buildings which are in the balance of the Public Utilities Enterprise. In order to prevent the enterprises from selling apartments under commercial conditions, the impugned resolution of the Government was adopted. The party concerned states that the impugned resolution of the Government was even unnecessary, it was adopted only by seeking to clear out the position of the Government on this matter.

The representatives of the party concerned has stated that, pursuant to Article 4 of the Law on the Privatisation of Apartments, municipalities sell the residential premises which belong to them, and enterprises and organisations sell the residential houses and apartments which are in their balance. According to this Law the persons who permanently resided in the territory of the Republic of Lithuania till 3 February 1989 and who, on the day when the Law had been enforced, were the tenants of the house or flat subject to be purchased or were the members of the tenants’ families or who, after this Law had been enforced, were allotted a residential premise by established order. The tenant and the members of his family who have acquired the right of ownership to the purchased residential house, apartment, according to said Law may not privatise any other residential house, apartment. Due to these provisions the residential houses, which were in the balance of the state enterprise of the Secretary Office of the Government, as far back as 1991 were transferred into the balance of Vilnius City Seniūnija, and the tenants who wished to privatise apartments privatised them.

Since recently fewer experts come to Lithuania, vacant apartments have been available in the building in Vydūno str. 17, in Vilnius, and they have been leased under commercial conditions for the employees of state institutions. Residential premises have been allotted without keeping the order of the allotment of residential premises. Normally, lease contracts of residential houses have been concluded, regardless any waiting lists, for one year. The validity term of some contracts is therefore expired. Some persons once have already privatised the apartments or have acquired them somewhere else, thus, in the opinion of the party concerned, the tenants of the house in Vydūno str. 17, in Vilnius, pursuant to the Law on the Privatisation of Apartments, have no right to privatise the apartments of this house.

The Constitutional Court

holds that:

  1. Legal regulation of privatisation of state property has been commenced by the Republic of Lithuania’s Law on the Initial Privatisation of State Property, which was adopted by the Supreme Council of the Republic of Lithuania on 28 February 1991 and enforced on 10 April of the same year. Until the adoption of this Law privatisation was not possible because by Item 3 of the Supreme Council Resolution “On the Economic Reform in Lithuania” of 26 July 1990, it was established: “To prohibit the distribution of the property of state enterprises, kolkhozes and soviet farms by using shares, and to commission the Government to take measures for cessation of division, sale, as well as any other transference of the property of state enterprises, kolkhozes, soviet farms, state—co-operative enterprises and other state-owned enterprises, as well as to nullify all illegal actions and actions which violated law, performed prior to the adoption of this resolution”.

It is established in Paragraph 1 of Article 1 of the Law on the Initial Privatisation of State Property of what enterprises, institutions, as well as other state-owned property (hereinafter property subject to privatisation is referred to by the term “object privatisation”) the initial privatisation is regulated by this Law. It is established in Paragraph 2 of the same Article that in addition to some other objects, “the procedure and terms for the privatisation of dwellings belonging to State and public housing funds shall be established by other laws of the Republic of Lithuania”. By this Article then, the objects, subject to privatisation pursuant to the Law on the Initial Privatisation of State Property, have been determined, as well as the property which privatisation is regulated by other laws.

It is established in Paragraph 3 of Article 7 of the Law on the Initial Privatisation of State Property, which has been observed by the Government while adopting the impugned resolution, that “pursuant to resolutions of the Government of the Republic of Lithuania as well as higher-level resolutions adopted by municipalities on the basis of government resolutions, other objects under the jurisdiction of the Government or municipalities may also be designated as being not subject to privatisation. It may also be established that certain enterprises can operate only as state enterprises”. No exceptions are made in this Law for residential houses belonging to the state and public housing fund, as well as for apartments in apartment blocks and in hostels. Therefore, while solving questions of privatisation of the apartments of this fund, the Law on the Initial Privatisation of State Property may not be referred to. Their privatisation is regulated by the Law on the Privatisation of Apartments which has been enforced since 30 June 1990.

It has been established in Paragraph 1 of Article 2 of the Law on the Privatisation of Apartments that “the object of sale and purchase is residential houses belonging to the state and public housing fund, apartments in apartment blocks and in hostels (hereinafter referred to as ‘residential houses, apartments’)”. This paragraph is set forth in the Law of 15 July 1993 as follows: “The object of sale and purchase is residential houses belonging to the state and public housing fund, apartments in apartment blocks, apartments and rooms in hostels (hereinafter referred to as ‘residential houses, apartments’)”. By this amendment the list of objects of privatisation has been expanded. Pursuant to said Law the list of residential premises not subject to be sold, used for hostels, was narrowed. It has been established that only such rooms in hostels may not be subject to privatisation “which are allotted to the students, graduates and post-graduates of the institutions of secondary, vocational, further and higher education in the procedure prescribed by the Government, as well as rooms in the hostels belonging to the Union of the Blind and the Weak-sighted of Lithuania, the Society of the Deaf and the Society of the Disabled of Lithuania”.

The exceptions to and limitations on the privatisation of residential premises are pointed out only in the very Law on the Privatisation of Apartments. The said law does not establish any limitations on the sale of the residential premises that are in residential houses belonging to state enterprises.

The Government, by Items 1, 2 and 3.4 of its act No. 161p of 13 February 1992, commissioned Vilnius City Council to transfer with reimbursement the house of 36 apartments in Vydūno str. 17, Vilnius, into the balance of “Tekta” state enterprise, for accommodation of experts and advisers of foreign states. By Item 3.1 of this Act the Government has obligated “Tekta” state enterprise (the beneficiary of its rights is the Public Utilities Enterprise of the Secretary Office of the Government) to register in Vilnius City Council the house situated at the address Vydūno str. 17, Vilnius, as a hostel. It is registered as such by the warrant of 12 March 1992.

Pursuant to Paragraph 1 of Article 365 of the Civil Code workers, employees, students of higher as well as secondary education may be accommodated in hostels during their working or studying time. Contrary to Items 1 and 3.4 of said Governmental Act, other persons are actually accommodated in the premises. Due to this situation, the discrepancy of legal status and actual state of the residential premises of the house in Vydūno str. 17, Vilnius, has arisen. The Constitutional Court does not decide and estimate whether these premises conform to the status of a hostel or other premises since the establishment of existence or absence of juridical facts, their estimation and the application of legal norms in this case is the prerogative of the Court which investigates the civil case, and is not within the province of the Constitutional Court (Paragraph 1 of Article 102 of the Constitution, Paragraph 1 of Article 63 of the Law on the Constitutional Court). Therefore, the Constitutional Court does not estimate the compliance of the impugned government resolution with Article 4 of the Law on the Privatisation of Apartments.

Taking into consideration the fact that the house in Vydūno str. 17, Vilnius, is registered as a hostel, the Constitutional Court concludes that the part of the Government Resolution (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, by which this building is included into the list of the buildings which are not subject to privatisation, contradicts Paragraph 1 of Article 2, as well as Article 3 of the Law on the Privatisation of Apartments.

  1. It is established in Item 2 of Article 94 of the Constitution and in Item 2 of Article 21 of the Law on the Government of the Republic of Lithuania that the Government implements laws. Thus, legal acts adopted by the Government must not contradict laws, or change norms of laws, as well as their content.

The Government may not change by means of its resolutions the procedure of privatisation of the premises of the hostel which is established by law. Since the house in Vydūno str. 17, Vilnius, is registered as a hostel, the Government by the impugned resolution has interfered into the regulated relations of the Law on the Privatisation of Apartments. Thus, the part of the Government Resolution (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, by which the building, situated at the address: Vydūno str. No. 17, Vilnius, is included into the list of the buildings which are not subject to privatisation contradicts Paragraph 2 of Article 94 of 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 the part of the Resolution of the Government of the Republic of Lithuania (No. 985) “On the Buildings in Vilnius Which are Not Subject to Privatisation and Which Belong to the Public Utilities Enterprise of the Secretary Office of the Government of the Republic of Lithuania” of 28 December 1993, by which the building, situated at the address: Vydūno str. No. 17, Vilnius, is included into the list of the buildings which are not subject to privatisation, contradicts Paragraph 2 of Article 94 of the Constitution, Paragraph 1 of Article 2, as well as 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         Stasys Stačiokas

 Teodora Staugaitienė                       Stasys Šedbaras                               Juozas Žilys