Legal issue: whether the contested provision, in violation of constitutional principles of equality and rule of law as well as constitutional prohibition against restrictions of rights of local self-government as to independent management of municipal property, does not allow the bodies of local self-government to adopt decisions in the form of a normative act concerning the privatisation of employment-related apartments in the absence of a special regional normative act to that effect.
Ratio decidendi: the Court noted that the right to property of the constituent entities of the Russian Federation (regions) and of municipal formations may be restricted by a federal law only on the condition that such restriction is commensurate to the constitutionally protected values, for the sake of which it is introduced (cf. the Judgment of the Constitutional Court of the Russian Federation of 22 November 2000 № 14-П). On this ground the Court has deemed the contested rule to be non-contradictory to the Constitution because, being taken in its constitutional sense within the current system of legal regulation, it does not preclude bodies of local self-government to take decisions on privatisation of employment-related dwelling apartments belonging to them – provided that such decisions are taken by way of exception and enable the municipalities to preserve the block of employment-related dwelling apartments at a level corresponding to their original purpose, i.e. the solution of matters of local significance. The right of a municipal body to alienate, when necessary, the dwellings belonging to such special housing fund does not entail its duty to adopt a decision to privatise any particular dwellings.
The Constitutional Court, having introduced by way of interpretation such restrictions on the rights of local self-government to privatise employment-related dwellings which were not directly envisaged by federal laws, thus called into question the ability of municipal bodies to dispose rationally of the municipal housing fund and hereby entered into conflict with the presumption of their good faith and reasonableness in deciding the issues of their competence.
The legislation currently in force does permit the proprietor of municipal housing fund to adopt normative acts establishing the grounds, conditions and procedure for privatisation of employment-related apartments.