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By J
23/06/2012

The Norwegian Blue

Lindheim and others v Norway 13221/08 & 2139/10 is a case about leasehold enfranchisement, Norwegian style. I wanted to cover it because it might have some relevance to domestic enfranchisement law* and because there are references to a proportionality analysis in an A1/P1 case.

So, there are several hundred thousand leaseholders in Norway. It seems that, from the 1950’s onwards, people started to buy leases of between 40 and 99 years of properties. In the ordinary course of events, as those expired, you’d need to negotiate a new lease. In 1975, a statutory right to extend the lease was created and, as amended in 1996 and 2004, the position was that the leaseholder had a right to an extended lease of indefinite duration, at a rent calculated in accordance with the rate of inflation, and not with reference to the market value of the land. So, you could have an indefinite right to remain for around 0.25% of the market value. It doesn’t appear that there was any condition requiring the use of the property as your home and there was no restriction on the sale of the leasehold interest (such sales were, of course, priced with reference to the market value of the land).

Which brings us to A1/P1, ECHR:

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

The Norwegian Supreme Court had rejected an argument from the landlords that domestic law violated A1/P1, but the ECtHR took a different view.

It was common ground that there was an interference with the rights of the landlord applicants.

There was a dispute as to whether domestic law served a legitimate purpose. The ECtHR found for the government on this point. It was clearly open to the Norwegian government to have decided that leaseholders – as a class – needed protection and could rationally be favoured in law.

The problem for Norway was the proportionality of the law. Or, to put it another way, did domestic law strike a fair and proportionate balance between the rights of the landlord and leaseholder? The rent payable under the new lease was strikingly low. The extended leases could only be terminated by the leaseholders. The profit in any sale would go entirely to the leaseholder. In the circumstances, landlords were required to carry a disproportionate burden. Norway was ordered to take appropriate steps to remedy the violation and pay damages and costs.

I’m really interested in this idea that A1/P1 involves a balancing of private interests and that the state can be liable for failing to create a legal system which allows for a proportionate allocation of harm, risk, etc. We got the same idea in Maempel v Malta 24202/10. Surely this is part of the answer in private sector human rights defences? Tenant and landlord have A1/P1 rights, so does (say) s.21, HA 1988 strike the proportionate balance between those rights?

 

*although given the decision in James v UK (1986) 8 EHRR 123 – Leasehold Reform Act 1968 compatible – and the more generous valuation basis, I doubt it. Still, who knows…

J is a barrister. He considers housing law to be the single greatest kind of law known to humankind and finds it very odd that so few people share this view.

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