Fundamental Rights – Civil and Political Rights – Right to property – Right to Culture
Civil and Political Rights;
Right to property;
Economic, Social and cultural rights;
Right to housing;
Economic, Social and cultural rights;
Right to culture.
4 of February of 2021
The Court found no unconstitutionality in an interpretation deduced from Article 13(3) of Law no. 42/2017 of 14 June 2017 whereby, for the purpose of the effects provided for therein, rented real-estate properties in which a commercial establishment of effective historical interest is currently functioning and has submitted a request for recognition as such before the date on which the current rental contract reaches its term, but that request is only approved by the municipality after that date due to one or more facts for which the tenant was not responsible, are deemed to be in the circumstances referred to in Article 51(4)(d) of Law no. 6/2006 of 27 February, with the text given to it by the aforesaid Law no. 42/2017.
A landlord sought to exercise its ability to oppose the renewal of a rental contract in such a way that the latter would end at the term of the five-year period defined for it within the framework of the procedure involved in the transition to the New Urban Rental Regime (NRAU). The tenant instead sought to renew the contract for an additional five years under the terms of Law no. 42/2017 of 14 June 2017, and the landlord filed for an eviction order. Applying Article 13(3) of Law no. 42/2017, both the court of first instance and the Court of Appeal rejected the landlord’s action, whereupon the landlord lodged the present appeal before the Constitutional Court.
The Court started by underlining that the appellant landlord’s desire to prevent the renewal of the rental contract and retrieve the enjoyment of the rented property of which it was the owner could be seen as a defensive facet of the right to property, inasmuch as the abilities to use and enjoy one’s assets can be considered to be protected by that right, as manifestations of personal autonomy. In the present case, the appellant argued that the owner’s right was compressed because the deferral of its right to oppose the renewal of the rental contract when the latter reached its term had the effect of forcing that contract’s renewal (or extension) for a further five years. Therefore, it precluded the exercise of a contractual ability that ought be seen as one of the powers to administer one’s assets which also fall within the sphere of protection afforded by the right in question.
However, having said this, the Court added that the right to property and the various abilities it provides, including the powers to enjoy and to administer, never takes on an absolute or preeminent value in relation to other, opposing rights and values. Indeed, the present case illustrated a situation in which rights and interests pertaining to landlords and tenants were pitted against one another. The primary justification for limiting landlords’ powers lies in the social-utility reasons derived from the purpose of the rentals themselves. At the end of the day, a commercial venture’s stability and continued trading in the rented property serve to protect the commercial activity pursued there – an activity that can find a referent in constitutional norms. Given the specificity of the establishment located in the rented property – a commercial establishment of effective historical interest – when the legislative measure before the Court compresses the freedom to negotiate in commercial rental agreements, it both serves specific goods and general interests that are constitutionally protected and finds its own justification in them. On the one hand, the Court expressed that preserving establishments and entities “of local historical and cultural or social interest” and enhancing their value is an issue that necessarily touches on the constitutional protection afforded to cultural heritage – a task that is primarily (though not exclusively) entrusted to the state, to begin with as part of the list of the latter’s fundamental tasks, in accordance with Article 78 of the Constitution of the Portuguese Republic (CRP). On the other hand, the Court considered that the challenged measure also corresponded to the public interests protected by Article 65 of the CRP, specifically the urbanistic ones, by contributing to the preservation of the identity-related characteristics of the urban fabric into which entities or establishments of recognised local historical and cultural or social value are integrated.
Having thus identified the public-interest reasons that justify compressing the right to property and thereby configured a constitutional credential that suffices to impose this conditioning on the owner, the Court said that, pursuant to the provisions of the first part of Article 18(2), CRP, it was important to gauge whether, in the light of those public-interest reasons taken in combination with the aims and the concrete scope of the legislative measure, the latter could be deemed appropriate, necessary and proportionate (in the strict sense), in such a way as to fulfil the essence of the material regime governing the limits on laws which restrict rights, guarantees and freedoms, as laid down in Article 18(2), CRP.
In what concerns the first test, the Court ruled that safeguarding the continued presence in the rented place of an establishment or entity that can be recognised as playing an important role in preserving and enhancing the value of the historical, cultural and social interests associated with both the activity undertaken there and the characteristics of the rented place itself, maintaining the rental contract (by means of the forced renewal in question) is shown to be a measure that is suitable and appropriate to the pursuit of the interests and values for which it seeks to provide. Regarding, in turn, the second test, the Court pointed out that the configuration of the legislative measure – limited to a restricted universe and with a small impact on the owner’s legal position – enabled the conclusion that it did not exceed what would be strictly necessary to the pursuit of the legitimate goal pursued, as it would be difficult to find an equally suitable way of pursuing the interests and values at stake that was less harmful to the owner. In what concerns the third and last test, the Court weighed the interests of the owner and the benefits of continuing the rental, not just for the tenant, but also – and above all – for the community, and concluded that burdening the owner could not be seen as is disproportionate or excessively damaging. In the light of this, the Court ruled that the challenged norm did not conflict with the principle of the prohibition of excess included in the latter aspect of the principle of proportionality, as set out in Article 18(2), CRP.
Secondly, the Court considered that the challenged legislative measure did not represent a retroactive (restrictive) intervention in the sphere of the owner’s rights that could activate the express prohibition laid down in Article 18(3), CRP. Indeed, the challenged norm did not go so far as to determine a new regime for situations that were fully consolidated on the date on which the Law entered into effect. The transitional-law norm contained in Article 13(3) of the Law was not applied to a situation in which the landlord’s right was already fully consolidated within his legal sphere. In the case in question, both the communication of opposition to the renewal and the foreseeable term of the rental contract post-dated the publication and entry into force of the regime established in Law no. 42/2017. Therefore, the Court concluded that the challenged norm did not represent a ‘retroactive’ encroachment on a consolidated right pertaining to the appellant, and was thus unable to see any violation of the right to property set out in Article 62(1), CRP, as the result of an illegitimate restriction that is not permitted under Article 18(2) and (3).
With regard to the alleged violation of the principles of legal security and the protection of legitimate expectations in the predictability of the law by the normative criterion applied in the case in question, the Court recalled that unfavourably affecting expectations constitutes a mutation in the legal order on which the targets of the norms included therein are unable to count in advance. In that regard, the first of the three tests applied in a judicial control of the protection of the confidence of private individuals is whether the action of the state in general and the state-legislator in particular has led to behaviours that are capable of engendering ‘expectations’ of continuity on the part of such private individuals.
It is true that the landlord’s expectation that the rental would end on the date on which it reached its term, by means of the exercise of the ability to oppose its renewal, was derived from the legislative reform of the urban rental regime brought about by the significant amendments which Law no. 31/2012 of 14 August 2012 made in this matter. However, the Court underlined that the ‘legislative’ conditions that could bring about a situation in which the landlord trusted in the possibility that the rental would end when it reached its term thanks to the ability to exercise the option of opposing the rental agreement’s renewal – conditions that were not substantially modified until the entry into force of Law no. 42/2017 – must be assessed within the broader framework of the protection afforded to traditional and historical trade. That protection was primarily expressed at the municipal level, by the creation of the programmes for recognising and protecting establishments and entities with a historical, cultural or social value with a local scope (particularly the ‘Lojas com História’ and ‘Porto de Tradição’ programmes) and in the need that was felt at that time for that protection to include measures designed to protect tenants within the scope of the urban rental relationship.
The immediate application of the transitional regime contained in Article 13 of Law no. 42/2017 – and especially the regime contained in the challenged norm, which corresponds to paragraph (3) of that Article – to the rental relationships that were in effect on the date on which the new regime came into force does not represent anything new in relation to the amendments which the legislator made in the domain of lasting rental relationships, such that the entities at which it was aimed might be unable to count on the possibility that the new regime set out in Law no. 42/2017 would apply to past rentals. Moreover, in the case before the Court, the landlord only exercised its ability to oppose the renewal of the rental contract after the publication and entry into force of the new legal regime, so the Court was unable to conclude that the appellant had adequately demonstrated that its allegedly defrauded confidence had been unequivocally supported by the legislator’s behaviour.
With regard to the alleged injury to trust caused not only by the supervening nature of the regime governing the protection of establishments or entities of local historical and cultural or social value established by Law no. 42/2017, the Court took the view that, in the situation before it in the present case, the challenged norm did not collide with any solidly consolidated expectation on the appellant’s part such that he would have been unable to foresee the normative solution which the lower courts found for the object of the present dispute. This view was based on three reasons. Firstly, at the moment when Law no. 42/2017 entered into effect, there were various possible situations in which the contracts could have reached their term prior to the municipal decision on the ongoing recognition procedures – procedures which, in any event, could only have been initiated in accordance with the municipal regulations governing the respective municipality – in Lisbon, as far as the present case was concerned, it was only possible to submit applications in a regulation manner from 15 May 2017 onwards. Secondly, the municipal act of recognition always refers to a situation that comes from the past and enjoys some degree of consolidation, taking into account criteria linked to the activity undertaken in the rented place and the applicable material and non-material heritage values, whose nature means that they are impossible to fulfil other than by means of a pre-existing and ongoing activity that is relevant to the memory, history and identity of the urban space into which it is integrated. Thirdly, it was impossible not to note a certain parallelism between the protection regime instituted by Law no. 42/2017 and the cultural heritage protection regime that was already included in the respective Basic Law approved by Law no. 107/2001 of 7 June 2001, inasmuch as both regimes possess a guaranteeing scope, are intended to provide for and preserve heritage values in the event of actions (or omissions) that harm the assets they protect, and on many occasions are preventive in nature.
- Rulings 277/16; 421/09; 299/20; 391/02; 387/19; 147/05; 148/05; 151/92; 280/01; 22/09; 421/99; 225/03; 393/20; 575/14; 751/20; 293/017; 195/17; and 477/20.