Some provisions of the “Castles Act” are in conflict with the Fundamental Law

The Act, which sets out specific rules for the free transfer into ownership or management of certain assets belonging to the national heritage, differently from other statutory provisions, in particular the Act CXCVI of 2011 on National Heritage (National Heritage Act), was referred by the President of the Republic to the Constitutional Court for a preliminary norm control. Under the Act, State-owned castles, mansions and manor houses forming part of the cultural heritage may be transferred by the State free of charge into the ownership or management of any natural or legal person who undertakes certain commitments laid down by law. The law prohibits the alienation or encumbrance of the property granted free of charge for a period of 99 years from the date of acquisition.

In her motion, the President of the Republic explained that the challenged provisions violate the requirement of legal certainty, in particular the requirement of clarity of the law, as the relationship between the Act and other relevant background legislation is not clear. In addition, the Act places some of the highly protected property under a significantly less stringent regulatory regime than the National Heritage Act which, in essence, excludes the possibility of alienation as a rule. According to the President of the Republic, these more permissive conditions for alienation do not comply in substance with the provisions of the Fundamental Law on the transfer of national property.

The Constitutional Court held that, in the light of the guarantee provisions of the Fundamental Law and the National Heritage Act, when drafting the regulations governing the management and use of national property, the law-maker must take into account the interests of the State in protecting national property and, in this context, the requirements of responsible and transparent management of national property. In the context of the transfer of national property, Article 38 of the Fundamental Law provides not only for the indication of the legal purpose and the exceptionality, but also for the requirement of the proportionality of value. This provision is to guarantee that the national property shall not be disposed of without any restrictions, but only for the purposes defined by an Act, and in principle in accordance with the requirement of proportionality of value. An exception to this requirement may be made by an Act, but in such a case it must be verified whether the transfer of the property is in the public interest, comparable to its retention and use within national assets. The Parliament can therefore dispose of national assets with this double limit in mind.

In making provision for the disposal of property forming part of national assets, the law-maker should, among other things, clarify which specific assets may fall under the regulation and who is entitled to acquire them. It is also necessary to define the rights and obligations of the legal entities involved during the legal relationship and the future of the national property after the legal relationship has ended. It is also a constitutional requirement that tenders for the acquisition of property should be open to the public. The law under review does not respect these constitutional requirements, as the motion of the President of the Republic has explained. Compared with the National Heritage Act, the Act provides for a more lenient regulatory regime for highly protected assets, firstly by making them alienable, secondly by making them free of charge and thirdly by defining the scope of potential property owners as potentially including any legal entity and natural person.

The Constitutional Court therefore concludes that the contested statutory provisions are contrary to the Fundamental Law and that the Act cannot therefore be promulgated. Zoltán Márki, Justice of the Constitutional Court attached a dissenting opinion to the decision, while Justices Tünde Handó, Attila Horváth, Imre Juhász, András Patyi and László Salamon attached their concurring reasonings.

On 5 January, the Minister of Construction and Transport, János Lázár, who tabled the bill, sent a letter to the Constitutional Court with his position and asked for a personal hearing.
There is no statutory provision allowing the submission of a request for a personal hearing in a procedure of preliminary norm control, and the Constitutional Court has not ordered one ex officio, in line with its consistent case-law.