Unconstitutionality of certain provisions of Catalan Law 1/2022, to address the housing emergency

The Constitutional Court issued ruling 120/2024 on 8 October, declaring several provisions of Catalonia's Law 1/2022, of 3 March, unconstitutional. This law amended Laws 18/2007, 24/2015, and 4/2016 to address the housing emergency.

Background

Constitutional challenge number 3955-2022 questioned the constitutionality of the entire Law of the Parliament of Catalonia 1/2022, of 3 March. The challenge argued that the law violated Article 149.1.1 of the Spanish Constitution, which grants the state exclusive authority to establish "the basic conditions that ensure equality among all Spaniards in exercising their rights and fulfilling their constitutional duties", in connection with Articles 14, 33 and 139 of the constitution, as the law sought to regulate fundamental aspects of property rights in dwellings located in Catalonia. Additionally, specific law provisions were examined for their constitutional validity, raising claims of both jurisdictional and substantive concerns.

The challenge to the constitutionality of Law 1/2022 failed. However, the Constitutional Court did find merit in the appeal concerning specific provisions, ultimately declaring those parts unconstitutional and null and void.

Provisions declared unconstitutional

• Article 1.3. Amended Law 18/2007, dated 28 December, concerning the right to housing. It stated that the social function of property was considered violated if a social rental proposal was not offered before initiating legal proceedings as outlined in Law 24/2015, dated 29 July, which addresses urgent measures for dealing with housing emergencies and energy poverty.
• Article 7. Included in Law 18/2007, when regulating liability for infringements, that in property transfer cases, if the new owner was a legal person, it would be subrogated to the position of the previous owner for the purpose of assuming the consequences of non-compliance with the social function of property.
• Article 11. Introduced a provision in Law 24/20215, establishing the compulsory renewal of social rental contracts that reach the end of their term (for a single time only), provided that the affected tenants could prove they still meet the requirements for residential exclusion.

• Article 12. Added to Law 24/2015 the extension of the obligation to offer a social rental proposal to any executive legal actions stemming from mortgage debt claims and specific eviction lawsuits.

  Additionally, proceedings initiated in which the social rent offer had not been made and accredited had to be discontinued so that the offer could be made and accredited.

  Finally, compulsory social rental contracts entered into under Law 24/2015 had to have a minimum duration that complied with urban leases regulations, and, in any event, if the property owner was a natural person, the agreement had to last at least five years, and if the owner was a legal person, the agreement had to last at least seven years. Only the wording in italics in this paragraph has been declared unconstitutional.

• Transitional provision. The obligation to offer and renew a social rental contract also applied if the related legal proceedings had been initiated before the implementation of Law 1/2022 and were still ongoing.

Constitutional Court ruling

Articles 1.3, 12.1 and 12.2, along with the Transitional Provision of Law 1/2022, are in violation of Article 149.1.6 of the Constitution, as they infringe upon the state's exclusive authority over procedural legislation.

Articles 11 and 12.3 (only the wording in italics) of Law 1/2022 violate Article 149.1.8 of the constitution, as they infringe upon the state's exclusive authority regarding contractual obligations.

Article 7 of Law 1/2022 conflicts with Article 25 of the Constitution regarding the principle of culpability.

Effects of the judgment

The declaration of unconstitutionality will not affect legal situations consolidated under the principle of legal certainty. As such, social rental contracts entered into between the enactment of Law 1/2022 and the publication of the ruling will remain valid.

However, the declaration of unconstitutionality will have retroactive effects on any sanctions resulting from non-compliance with the provisions that have been declared unconstitutional.

Osborne Clarke comment

With this ruling, failure to offer a social rental proposal prior to filing a legal claim under the terms of Law 24/2015 is no longer considered a non-compliance with the social function of property.

However, the measure provided for in this regard by Law 24/2015 in its article 5.2 remains in force and continues to impact large holders (grandes tenedores):

"Before initiating any legal action for foreclosure or eviction due to non-payment of rent, the plaintiff must present a proposal for social rental to those affected. This applies if the procedure involves individuals or families without an alternative housing option who fall within the risk parameters of residential exclusion established by this law (which must be verified by the plaintiff itself, by first requesting the information from the persons concerned), provided that one of the following conditions is met:

a) The plaintiff holds the status of a large holder (gran tenedor de vivienda).

b) The plaintiff is a legal person who has acquired dwellings after 30 April 2008 that come, in the first or subsequent transfers, from foreclosures, from debt compensation agreements or dación en pago or from sales and purchases that have as their cause the impossibility of repaying the mortgage loan."