New codes (not only) for expats: Revolutionary change in Czech civil law

Two critical civil law codes came into effect on January 1, 2014: the new Civil Code, and Act on Business Corporations. Replacing the previous Civil and Commercial Codes, they represent the greatest change in civil law in almost 50 years. In the first of a few articles we focus on how the codes affect various areas of everyday life and point out the ones that are important and/or interesting for expats.

Civil Code

The new Civil Code has 3081 sections. It has taken over a variety of rules previously governed by other laws (as a result, over 100 legal regulations have been cancelled). Not all the rules that previously formed separate laws have been taken over without modification. The new Code strives to adapt them to suit modern needs. Another aim of the new Civil Code is to adjust or specify some rules that have been neglected by civil law until now or were not defined strictly enough, albeit needed in practice.

The new Civil Code brings significant changes that have a material impact, inter alia, on following fields:

  • the new institute of pre-contractual liability;
  • greater flexibility in concluding contracts;
  • special regulation of general business terms;
  • significant changes in the area of liability;
  • material changes in the area of real estate – structures on plots of land owned by the same owner become part of the relevant plot of land;
  • changes in the protection of property owners and acquirers;
  • changes in the administration of the real estate cadastre; and
  • newly-established institutes, such as the trust fund, construction right, precarious loan, lease and the like.

 

Areas of everyday life – Moral rights

A person becomes a major, i.e. reaches full legal capacity, at the age of 18 (previously at 16), or by means of marriage. A newly introduced possibility is to obtain legal capacity by “emancipation”, if a minor is able to make a living and take care of themselves. This means that a minor can attain the majority of their own free will, if this is in their interest.

The new Civil Code also emphasises the protection of rights connected to humanity, such as the right to life, health, personal freedom, the right to a good name, dignity, privacy and others. Just like in the previous civil law, satisfaction must be given to those whose rights have been violated in this respect. However, financial compensation is newly preferred: unless an apology or another way of redressing the damage caused is considered sufficient, the violation must always be financially compensated.

The protection of personality rights will be reflected, for example, in the necessity to gain a person’s approval not only when intending to publish a photo, but also before taking it. If this right is not respected, a person who has been photographed without approval may require compensation from the photographer. It is not yet clear how courts will judge in cases when a photographer takes a picture of friends at a party and publishes the photo on a social network.

The new Civil Code has also adapted a different view on pets. While the old Civil Code treated animals as things, the new legislation treats them as live beings with feelings. This special protection concerns all live animals, be they vertebrates or invertebrates, with the sole condition that they can feel pain or stress and they have an emotional bond with their owners.

It is anticipated that in some cases it will be extremely difficult, and yet necessary, to prove that these conditions have been met. For example, according to the new legal regulation, it will not be possible to seize a dog as part of a distraint order, nor will a creditor be able to take the debtor’s cat as collateral. However, this does not mean that in general animals cannot be seized as part of a distraint; the cases will need to be judged individually. It will not be possible to seize pets (e.g. dogs or cats), but it probably will be possible to for example seize rare aquarium fish, as it is not assumed that they would undergo emotional stress when given to a different owner.

Areas of everyday life – Family law

The basic concept of family law has been preserved in the new Civil Code. The Code largely draws inspiration from the previous well-established legal regulations; therefore any departures from the previous law one might notice result from a different formulation rather than real modifications. The aim of these reformulations was to facilitate understanding of the text.

The new Civil Code also introduces some new institutions (such as family businesses) that have proven successful in foreign law. At the same time, it re-introduces some legal regulations that used to exist in our law (such as adopting a major).

Areas of everyday life – Inheritance law

The new Civil Code has kept the previous basic approach, in which hereditary rights start to exist when the devisor passes away. The new concept of inheritance law gives the devisors more freedom in deciding what will happen to their property after they die. An example of better management of the entitlement to inheritance is the new possibility of drawing up an inheritance contract.

An inheritance contract has to be concluded as a public deed; otherwise it is considered a last will and testament. An inheritance contract cannot be cancelled unilaterally, which provides a better guarantee to the inheritors that they will really become the owners of the respective property in the future. However, the contract does not in any way limit the devisors in managing their property during their lifetime. An inheritance contract cannot be concluded concerning the whole inheritance: a quarter of it has to remain free for the devisor to be able to provide for it in their specifically expressed will.

In general, the regulations of the new Civil Code that deal with inheritance matters will also apply to foreigners staying in the Czech Republic, as long as the devisor’s regular stay at the time of their death was in the Czech Republic.

About the author
Tomáš Petyovský is an attorney-at-law who works for Deloitte Czech Republic as the Manager of the Brno Immigration Team. He specialises mainly in employee, labour and immigration law, benefiting from his long-term experience in providing immigration services (in particular arranging work permits, visas, residence permits and citizenship, acting as a lawyer in appellate procedures etc).

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