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19/10/2020
The Criminal Code and the Code of Criminal Procedures have doubled the limits of damages after almost 20 years:
• damage not insignificant has increased from 5,000 CZK to 10,000 CZK;
• damage not small from 25,000 CZK to 50,000 CZK;
• larger damage from 50,000 CZK to 100,000 CZK;
• substantial damage from 500,000 CZK to 1,000,000 CZK;
• extensive damage from 5,000,000 CZK to 10,000,000 CZK.
Causing damages up to 10,000 CZK will thus only be dealt with as a misdemeanor in administrative proceedings.
Buyers are no longer obliged to pay property acquisition tax. The Act abolishing the Real Estate Acquisition Tax was adopted with retroactive effects for cases where the Land Registry deposit was made in December 2019 and later.
If the Land Registry deposit took place between December 2019 and 26 September 2020 and the advance or all of the tax has already been paid, the purchaser may submit an application for reimbursement of the excess tax on the acquisition of the immovable property. Such a request shall be made to the locally competent tax authority.
An unwelcome change will occur under the personal income tax exemption for the sale of immovable property. The time test will be extended from 5 to 10 years of ownership of the property so that the seller does not have to pay tax on such a sale. The extension of this period will only apply to immovable property that is not intended for own residence and will be acquired after 1 January 2021, which means that for immovable property acquired earlier, the time test remains the same (5 years). The change will not affect the sale of the property where the seller resides, here the time test is set at 2 years.
News in consumer law
The amendment to the Consumer Protection Act and other acts, which aims in particular to combat the new unfair commercial practices of entrepreneurs, introduces a new possibility of involving non-state organisations in consumer protection.
One of these organisations is e.g. The European Consumer Centre for the Czech Republic, based in Prague, which, like other legal entities, has the possibility to give the European Union institutions so-called external warnings in case of suspected infringements against consumers.
Since the recent amendment to the Civil Code, it is no longer expressly prohibited to negotiate a contractual penalty in lease agreement, but the amount of the penalty is capped at three times the monthly rent in total with the rental security deposit. This means that if the security deposit is already three times the rent, then it will not be possible to negotiate the contractual penalty at all.
It may be more appropriate for landlords to continue to make security deposit instead of a contractual penalty, since they will have the money with them throughout the lease period and will not have to wait for to sue tenant for payment of the penalty. On the other hand, a contractual penalty acts as a flat-rate compensation and the lessor does not have to prove what damage he has suffered or whether he has suffered any damage at all, since the lessee is obliged to pay a contractual penalty even if the damage has not occurred. Security deposit can be used in particular if the tenant has not paid the rent or if he has damaged the subject of the lease. On the other hand, a contractual penalty may penalise most infringements of the tenant's obligations, but the rule that the tenant may not be subject to unfair obligations must always be maintained.
The Property Valuation Act introduces the valuation of an object through market value and thus responds to cases where, in order to determine the normal price of an object, because of the uniqueness of the object of the valuation, it is not possible to ascertain the purchase prices of comparable items – because there are no comparable items. The problem of determining the open market value also manifested itself in cases of valuation of state assets (e.g. chateaux) by expert reports used in the sale of these assets. Thus, through market value, it will be possible to value lucrative items, the open market price of which, in the absence of that institution, has for the most part been set at a lower price.
The amendment to the Property Valuation Act also contains refinements in the processing of price maps of building land, introduces the valuation of fast-growing trees, specifies the valuation of damage to the owner of an immovable property subject to an easement or other material right established by law and others.
This amendment will take effect on period 1st January 2021
The new European Parliament regulation aims to promote fairness and transparency for business users of online brokering services. The Regulation re-regulates the rights and obligations of intermediary service providers (e.g. Amazon, eBay, take away Booking.com, Trivago or Heuréka.cz), operators of internet search engines (e.g. Google, list Yahoo, The Centre) and the users – traders who offer their goods and services to end users on these platforms of the above-mentioned providers.
Intermediation service providers have a new obligation to adjust trading conditions so that they are clear, understandable and easily accessible. Providers are newly obliged to establish the main parameters determining the order of the subjects sought and the reasons why these parameters are relevant compared to other parameters. They shall also indicate how the order of the entities sought may be changed in return for payment and shall ensure that their terms and conditions contain a description of all cases where the provider may apply differential treatment to users (traders) and their goods or services. Providers are also obliged to set up an internal complaint handling system which is easily accessible and free of charge and ensures that complaints are dealt with within a reasonable time.
The government has approved a Draft of an Act on private security activities, which is intended to tighten the conditions for the activities of private security services and to start regulating these activities by a separate act, instead of the current Trade Licensing Act.
The Draft of the Act provides six types of private security activities, which it divides into:
• group A licences – protection of people and property;
• group B licences – protection of property in special cases;
• group C licences – private decetive service;
• group D licences – transport of cash and valuables exceeding 5 milion CZK;
• group E licences – technical service for the protection of people and property;
• group F licences – safety advising.
On the basis of one of the above licences, it will now be possible to carry out a private security activity. This licences will be granted by the Ministry of the Interior for a period of 10 years. The Act will list the conditions that an applicant must meet to be granted a licence, such as the applicant's integrity, professional competence and indebtedness.
Private security services currently operating on the basis of a business licence will be able to operate on the basis of the existing business licence for 2 years from the date of entry into force of the Act, which will be considered as a licence of Groups A to F, depending on the subject of the business. The authorisations deemed to be A to E licences will expire after this period. In the first year of force of the Act, entities wishing to continue their activities must apply for a licence. Entrepreneurs with an F licence, i.e. safety advising, which is currently free under the trade ‘Production, trade and services not listed in Annexes 1 to 3 of the Trade Licensing Act’, will not have to apply for a new licence as it will not expire.
The Act also will lists the conditions for the insurance of persons operating a private security service and a period of two years within which the employees of the operator, the operator and other persons carrying out the activity must fulfil the conditions laid down, such as the integrity, professional competence, etc. already mentioned.
The first part of the new Act on the right to digital services, which will bring digitisation of a number of government services, has already entered into force. The user can thus make new use of the right to provide a digital service, to which the public authorities are obliged to provide such a service and the right of the user to perform a digital action.
In addition, the user has the right to prove or certify facts by reference to basic registers or by extract from the public administration information system. At the same time, he may not be compelled to produce a document, certificate or other public document or be punished for failing to produce one if the details of him or his rights and obligations are available in one of the public administration information systems and the Act allows the sharing of data or the user of the service has consented to their sharing.
Public authorities are not entitled to request paper documents from the user of the service if he has submitted the same documents in electronic form. Furthermore, the user of the service has the right of access to information held about him by the public authority and the right to be notified of the expiry of the document, card, certificate or other public document by the public authority which issued it.
Other parts of the Act will take effect gradually, with the last (fourth) part expected to take effect at the beginning of 2025.