The division of an immovable property and a mortgage on such property P 15/12
Mortgaging the fractional shares of all immovable properties resulting from the division of an immovable property, in the case where the fractional share of the property was mortgaged before the division, is inconsistent with the Constitution.
At the hearing on 10 July 2012 at 1 p.m., the Constitutional Tribunal considered a question of law, referred by the District Court for the District of Poznań-Stare Miasto in Poznań, the 12th Civil Division, concerning the division of an immovable property and a mortgage on such property.
The Constitutional Tribunal adjudicated that Article 76(1), second sentence, of the Act of 6 July 1982 on Land Registers and Mortgage was inconsistent with Article 64(1) and (3) in conjunction with Article 31(3) and Article 21(1) of the Constitution, as well as was consistent with Article 64(2) in conjunction Article 32(1) of the Constitution. As to the remainder, the Tribunal decided to discontinue the proceedings.
The Constitutional Tribunal stated that the challenged provision resolved the conflict of two rights - the right of ownership and a debt secured by a mortgage - to the advantage of the latter. The protection of the constitutional rights of a creditor was granted at the cost of the rights of the co-owners of an immovable property, whose shares of the property had not been mortgaged before the division.
In the opinion of the Tribunal, although the challenged solution undoubtedly restricted the rights of the owners, it did not infringe the essence of the right of ownership. What determined that the provision was inconsistent with the Constitution was the negative result of the test of proportionality, included in Article 31(3) of the Constitution and construed as the sum of three component principles: the principle of usefulness, the principle of necessity and a prohibition against excessive interference.
In the view of the Constitutional Tribunal, doubts were raised as to the usefulness of the solution introduced by the challenged second sentence of Article 76(1) of the said Act, as regards the protection of the rights of a mortgage creditor. The introduction of the challenged provision was certainly unnecessary, as there were other legal solutions which, if applied, would protect a debt secured by a mortgage without any infringement of the rights of the other co-owners. The restriction of the right of ownership was also contrary to the prohibition against excessive interference, as the co-owners had no effective means of protection against foreclosure, in particular in the case of a compulsory mortgage.
In the light of the findings, the Tribunal concluded that the legislator had resolved the conflict of the two constitutionally protected rights (Article 64(1) of the Constitution) in a manner which was contrary to the fundamental assumptions of the Constitution. What followed from the assumptions was the special status of ownership (Article 21(1) of the Constitution) in comparison with other property rights. In the case of the conflict of the rights – the right of ownership and a debt secured by a mortgage - it is the right of ownership that should primarily be protected. In the light of Article 31(3) of the Constitution, “the price” the owners paid for securing the debt, on the basis of Article 76(1)(2) of the said Act, was disproportionately high in comparison with the benefits gained by the creditor.
The Tribunal did not share the view of the court referring the question that the challenged regulation had infringed the principle of equality expressed in Article 64(2) of the Constitution in conjunction with Article 32(1) of the Constitution.
The hearing was presided over by Judge Adam Jamróz, and the Judge Rapporteur was Judge Małgorzata Pyziak-Szafnicka.
The judgment is final and its operative part shall be published in the Journal of Laws.