The Constitutional Court did not annul part of the law regulating rental housing

BRNO - The financial situation of people living in rental apartments will not radically change for the time being. The Constitutional Court today rejected the complaint of the Municipal Court in Prague, which proposed the annulment of part of the Civil Code related to rental housing. If the Constitutional Court had agreed with the Municipal Court, the special legal regulations with a social aspect would cease to apply, and rental relationships would begin to be governed by general legal provisions.
However, the Constitutional Court pointed out that the current situation is unconstitutional. The state has not yet been able to fill the gap in the laws that the Constitutional Court first highlighted six years ago. This concerns a missing norm that would allow for unilateral rent increases to cover the costs of maintenance and operation of rental buildings. One of the provisions of the Civil Code refers to the non-existent norm.
It is a draw, comment the court's ruling owners of the buildings. Several dozen of them are currently listening to the justification of the verdict in the building of the Constitutional Court.
Chairman of the Judges' Union Jaromír Jirsa previously stated that if the complaint to the Constitutional Court succeeded, deregulation could end in a single moment. Chairman of the Association for the Protection of Tenants and MP for ČSSD Stanislav Křeček warned that this could lead to chaos in the housing sector. The representatives of the Civic Association of Homeowners hoped for the annulment of the current provisions. They argued that low regulated rents do not even cover the costs of maintenance and operation of the buildings. Some of them therefore filed a lawsuit with the European Court of Human Rights.
If instead of the social housing regulations, general provisions began to apply, it would be possible to terminate all contracts within three months. If by that time tenants did not reach an agreement with the landlords on a new contract, voluntary eviction or enforcement would follow.
Rent regulation in the Czech Republic affects about 750,000 apartments and several million people.

Selection of events surrounding rent deregulation since 2003

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19. 3. 2003 - The Constitutional Court annulled the price moratorium on rents.
- The government approved a draft law on rents, according to which rents should be increased by a maximum of ten percent per year.
21. 3. 2004 - The finance and local development ministers agreed that rents would be increased three times by ten percent by 2006.
11. 2. 2004 - MPs of the ruling coalition confirmed the agreement on rents. According to the agreement, rents will rise three times by ten percent, on 1. 7. 2004, 1. 7. 2005, and 1. 1. 2006.
9. 3. 2004 - The ruling coalition failed to push through the draft law on gradual rent increases in the Chamber of Deputies.
20. 12. 2004 - Leaders of coalition parties could not agree on the form of a law that would liberalize rental prices.
20. 12. 2005 - The Chamber of Deputies adopted a proposal that from 1. 1. 2007 to 2010, rents in apartments with regulated rents would increase on average by 14.2% per year.
1. 2. 2006 - The Senate returned the rent deregulation law to the Chamber of Deputies.
7. 3. 2006 - The Constitutional Court refused to annul the entire part of the Civil Code related to rental housing, as proposed by the Municipal Court in Prague. The Constitutional Court still considers rent regulation to be unconstitutional.