Changes of the New Civil Code

So-called technical novelization of the New Civil Code, i.e. the Act No. 460/2016 Coll., by which the Act No. 89/2012 Coll., the Civil Code (“the NCC”), is amended, was published in the Collection of Laws (Sbírka zákonů) on the 30th December 2016 and most of its provisions will become effective as of 28th February 2017.

The aim of the novelization is to eliminate the most problematic provisions of the NCC, which shortly after the date of their effectiveness, appeared to be capable to: restrict, make more difficult or unreturnably affect the legal position of the individual entities, their property or personal sphere” and for which it is not possible due to their urgency or seriousness to wait until the law is interpreted by judicature.

The novelization addresses especially the following issues:

  1. employment of juveniles (Section 35 NCC): the novelization enables the juveniles older than 15-years to enter into an employment contract according to the Labour Code subject to one condition: the employment commencement day cannot precede the last day of their mandatory education. The right of a statutory representative of a minor younger than 16-years to terminate his employment is cancelled;
  2. a new regulation of the restriction of legal capacity (Section 59 NCC, Sec. 3033 (1) NCC);
  3. the protection of a human body after death (Section 115 – 117 NCC): a number of provisions regulating this issue are cancelled;
  4. acting on behalf of legal entities (Section 164 (3) NCC): the provision by which one member of a statutory body of a legal entity was obliged to act in relation to the employees in case that the legal entity had a collective statutory body, is cancelled;
  5. newly specified requirements regarding the form of a power of attorney (Section 441(2) NCC): for legal acts, for which the form of a notarial deed is required, a power of attorney in a simple written form with officially verified signature of the principal party will be now officially sufficient;
  6. matrimonial property right (Section 709 (3) NCC): the acquisition of a share in a corporation entity by one of the spouses does not automatically establish the participation of the other spouse to the company or cooperative, except for a housing co-operative;
  7. maintenance obligation (Sec. 921 (2) NCC): a new right to require default interests in case of late payments for maintenance;
  8. renewal of the statutory pre-emptive right in joint ownership of a real estate property (Section 1124 (1) NCC); at the same time the co-owners will have a statutory right to waive this pre-emptive right (Section 1125 NCC). If the real estate property is registered in the land registry the waiver of the pre-emptive right will be also subject to registration. This new regulation will become effective as of 1st January 2018;
  9. new regulation of the establishment of the trusts (Section 1451 NCC): a register of trusts and a mandatory incorporation of trusts into the register is introduced by the new law. The new trust will be newly established on the day of its registration. Other changes concern the establishment of the abovementioned register of trusts (Sections 1452, 1457 and 1474 NCC). Also this part of the new regulation will become effective as of 1st January 2018;
  10. termination of a contractual obligation by set-off (Section 1988 (2) NCC): the statutory ban on set-off of any debts against wage, salary or remuneration arising from an employment contract or against any compensation thereof, exceeding half of the amount of the wage, salary, remuneration or a compensation, is abandoned by the new law;
  11. agreement on wage deductions or other incomes deductions (Section 2045 (1) NCC): the novelization cancels the restriction that a debt cannot be secured by an agreement on wage (or other incomes) deductions for an amount exceeding half of the amount of the wage or another income. It will newly be possible to secure debts in this way without any restriction; and
  12. decrease of the maximum limit for the amount of the deposit payments in lease relations – maximum amount will be the three times rent as opposed to the six times rent (Section 2254 (1) NCC).

By Michaela Fuchsová & Magda Stárková